Microsoft Hits Back at UK Regulator’s Decision to Block Activision Acquisition

Microsoft’s president Brad Smith said the UK regulator’s decision to prevent its acquisition of Call of Duty maker Activision Blizzard “had shaken confidence” in Britain as a destination for tech businesses.

The Competition and Markets Authority (CMA), which operates independently from government, blocked the deal on Wednesday, saying it could hit competition in the nascent cloud gaming market.

Microsoft hit back on Thursday, saying it was “probably the darkest day in our four decades in Britain” and sent the wrong message to the global tech industry about the UK.

“If the government of the United Kingdom wants to bring in investment, if it wants to create jobs (…) it needs to look hard at the role of the CMA, the regulatory structure in the United Kingdom, this transaction, and the message that the United Kingdom has just said to the world,” he told BBC radio.

A spokesman for British Prime Minister Rishi Sunak said Smith’s comments were “not borne out by the facts.”

“We continue to believe that the UK has an extremely attractive tech sector and a growing games market,” he said. “We will continue to engage proactively with Microsoft and other companies.”

Smith said Microsoft had worked effectively with regulators in Brussels but not in London, which he said refuted Britain’s claim that it would be more flexible after Brexit.

The company had answered the CMA’s questions, he said, and it had told them to come back with any more concerns. “They went silent, we heard nothing from them,” he said.

“There’s a clear message here — the European Union is a more attractive place to start a business if you want some day to sell it than the United Kingdom,” he added.

But CMA Chief Executive Sarah Cardell said the regulator’s role was to make sure Britain was a competitive environment for businesses to be able to grow and thrive.

“The decision that the CMA takes is an independent decision that we reached looking at an overall assessment of the impact of the deal on competition, and we think that is the right decision for the UK,” she said.

She noted the US Federal Trade Commission was also pressing for the deal to be blocked on competition grounds.

Microsoft said yesterday it would appeal, with “aggressive” support from Activision.

Appeals against CMA rulings are heard by the Competition Appeals Tribunal, which makes a judgment on the merits of the decision. It will not be an opportunity for Microsoft to submit new remedies.

© Thomson Reuters 2023


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Activision Blizzard Accused of Spying on Employees, Threatening Them

Activision Blizzard violated US labour law by illegally surveilling employees during a walkout and threatening to shut down internal chat channels as a union sought to organize its workers, a federal labour agency said on Friday.

A National Labor Relations Board spokeswoman said that unless Activision settles, the agency will issue a complaint against the company involving employees of its subsidiary Blizzard Entertainment based in California and three other states.

The Communication Workers of America union (CWA) has accused the Call of Duty maker of a series of illegal labour practices at the union has sought to organize video game testers and other employees at the company and its subsidiaries.

Blizzard employees around the country staged a walkout last year to protest what they said was a lack of gender equality at the company.

Kayla Blado, a spokeswoman for the labour board, said on Friday that a regional agency official had found merit to the CWA’s claim that Activision used security staff to keep tabs on workers during the walkout.

A claim that the company also broke the law by threatening to close internal Slack channels where employees frequently discussed working conditions was also found to have merit, Blado said.

An Activision spokesperson in a statement defended the company’s ability to prevent “toxic workplace behaviour.”

“CWA wants us to accept their… false claims, but we strongly believe employees shouldn’t have to be subjected to insults and put downs for their hard work – especially on company communication platforms,” the spokesperson said.

The union did not immediately respond to a request for comment.

Activision is already facing a separate NLRB complaint issued last year claiming the company used a policy limiting what workers can post on social media to bar them from discussing working conditions. Activision has said its social media policy is lawful and does not bar employees from exercising their rights under US labour law.

Small groups of workers at Activision subsidiaries in New York and Wisconsin have voted to join the CWA in recent months, and employees in Boston are seeking to have an election. Activision has said it is considering its options in those cases.

Xbox maker Microsoft last year agreed to buy Activision for $69 billion (roughly Rs. 5,67,000 crore), a deal that has faced antitrust scrutiny from US and European regulators.

© Thomson Reuters 2023
 


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Wizardry, warfare, Wii on ballot for World Video Game HOF

Wizardry, warfare and Wii are on the ballot as the World Video Game Hall of Fame narrows down its contenders for the class of 2023.

The Hall of Fame on Wednesday announced 12 finalists that are being considered for induction in May.

The games for consideration include Age of Empires, Angry Birds, Barbie Faauthshion Designer, Call of Duty 4: Modern Warfare, Computer Space, FIFA International Soccer, GoldenEye 007, The Last of Us, NBA 2K, Quake, Wii Sports and Wizardry.

A panel of experts and the public will vote on the winners.

“It’s always difficult to narrow the World Video Game Hall of Fame nominations down to just 12 finalists because there are so many games that have had an enormous influence on popular culture or the video game industry itself,” said Jon-Paul C. Dyson, director of the The Strong’s International Center for the History of Electronic Games in Rochester, where the hall is based.

“This year’s finalists are some heavy-hitters,” he said.


Twelve finalists are being considered for entry to the World Video Game Hall of Fame this May.
AP

The Hall of Fame recognizes arcade, console, computer, handheld, and mobile games whose popularity has been far-reaching and influenced other games or society at large.

Finalist FIFA International Soccer is the most popular sports game franchise of all time, according to the hall, and is a worldwide best-seller with updates every year from publisher Electronic Arts.

And then there’s Rovio’s Angry Birds, with 2 billion downloads, which is nominated for turning millions of smartphone users into gamers.

The 1996 Barbie Fashion Designer game broke with the pattern of the industry marketing to male players; Wii Sports became a hit among older adults; and Nutting Associate’s coin-operated Computer Space from 1971 proved video games could exist outside of computer labs as the first commercial video game, according to the hall.

The post-apocalyptic The Last of Us, released by Naughty Dog and Sony Interactive Entertainment in 2013, is now a hit TV show for HBO.

Anyone can nominate a game for the hall.

Thousands of nominations came in for consideration for this year’s class, The Strong museum said.

Fan voting is underway online through March 22 as part of what’s called the “Player’s Choice” ballot.

The three games that receive the most public votes will form one ballot that will be counted alongside ballots submitted by members of an international committee of experts.

The winners will be inducted in a virtual ceremony on May 4.

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Microsoft’s Licensing Offer Said to Likely Satisfy EU on Activision Deal

Microsoft’s offer of licensing deals to rivals is likely to address EU antitrust concerns over its $69 billion (nearly Rs. 5,68,000 crore) acquisition of Activision, three people familiar with the matter said, helping it to clear a major hurdle.

Microsoft announced the Activision bid in January last year, its biggest ever, to take on leaders Tencent and Sony, in the booming videogaming market and to venture in the metaverse which is virtual online worlds where people can work, play and socialise.

The European Commission, which is scheduled to decide on the deal by April 25, is not expected to demand that Microsoft sell assets to win its approval, the people said.

Activision shares spiked up 1.8 percent in pre-market trading after the Reuters’ story was published.

Microsoft President Brad Smith last month said the US software group was ready to offer rivals licensing deals to address antitrust concerns but it would not sell Activision’s lucrative Call of Duty franchise.

Smith said it was not feasible or realistic to think that one game or one slice of Activision can be carved out and separated from the rest.

The EU competition enforcer declined to comment.

Microsoft said it was “committed to offering effective  and  easily  enforceable solutions  that address the European Commission’s concerns.”

“Our commitment to grant long term 100 percent equal access to  Call of Duty to Sony, Steam,  NVIDIA and others  preserves the deal’s benefits to gamers and developers and increases competition in the market,” a Microsoft spokesperson said.

Last month, Microsoft said it had signed 10-year licensing deals with Nintendo and Nvidia that will bring Call of Duty to their gaming platforms, with the agreements conditional on a green light for the Activision deal.

The deal faces regulatory headwinds in Britain, where the UK competition agency has suggested that Microsoft divests Call of Duty to address its concerns while the US Federal Trade Commission (FTC) has asked a judge to block the deal.

© Thomson Reuters 2023


 

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Call of Duty Maker Activision Blizzard Accused of Firing Employees for Using Strong Language

Call of Duty maker Activision Blizzard has been accused by a union of illegally firing two video game testers for using “strong language” in a protest of a new company policy that limits remote work.

The Communication Workers of America (CWA) said it filed a complaint with the US National Labor Relations Board on Tuesday seeking to have the workers reinstated.

The case is the latest the union has brought to the labour board as part of a campaign to unionize the firm and its subsidiaries. Small groups of game testers at three Activision subsidiaries voted to join the CWA last year.

Microsoft is seeking to acquire Activision for $69 billion (nearly Rs. 5,68,500 crore), but US regulators have sued to block the deal.

The labour board last year issued complaints accusing Santa Monica, California-based Activision of threatening employees who posted on social media about their working conditions and withholding raises from pro-union workers, which the company denies.

Joseph Christinat, a spokesman for Activision, said the company takes appropriate disciplinary action when employees violate its workplace code of conduct.

“Using abusive, threatening or harassing language toward colleagues is unacceptable and we are disappointed that the CWA is advocating for this type of behavior,” he said.

According to the union, Activision last month announced its employees would be required to report to the office three days per week beginning in April, ending a policy that had allowed more flexible arrangements during the COVID-19 pandemic.

The change received an overwhelmingly negative response from employees, the CWA said, and Activision fired two game testers who “expressed their outrage using strong language.”

The CWA suggested the Democrat-led labor board could use the case to revisit a 2020 ruling by a Republican majority that limited legal protections for workers who use vulgar or offensive language during workplace disputes.

“When faced with unfair treatment by unscrupulous employers like Activision, workers should have the right to express themselves,” CWA Secretary-Treasurer Sara Steffens said in a statement.

© Thomson Reuters 2023


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Microsoft Seeks to Push Activision Deal at EU Hearing for Market Competition

Microsoft President Brad Smith on Tuesday will seek to convince EU antitrust regulators at a closed hearing that the US software giant’s $69 billion (nearly Rs. 5,71,800 crore) bid for Call of Duty maker Activision Blizzard will boost competition.

Smith will lead a delegation of 18 senior executives, including Microsoft Gaming Chief Executive Officer Phil Spencer, while Activision will be represented by its CEO Robert Kotick, a European Commission document seen by Reuters showed.

The hearing will allow Xbox maker Microsoft to gauge the mood among senior EU and national competition officials and European Commission lawyers ahead of the submission of remedies to address antitrust concerns.

“I think we will make clear that our acquisition of Activision Blizzard will bring more games to more people on more devices and platforms than ever before,” Smith told reporters on his way to the hearing.

Microsoft was willing to address concerns with Call of Duty licensing offers similar to the 10-year deal with Nintendo and regulatory undertakings, Smith added, without providing any further details.

Microsoft announced the Activision acquisition in January last year to take on leaders Tencent and Sony, but has run into regulatory headwinds in Europe, Britain and the United States.

Sony, which wants the deal to be blocked, sent its gaming chief Jim Ryan.

Alphabet’s Google and chip designer and computing firm Nvidia, which has a gaming business, also took part in the hearing.

“The European Commission asked for our views in the course of their inquiries into this issue. We will continue to cooperate in any processes, when requested, to ensure all views are considered,” a Google spokesperson said.

Nvidia declined to comment. The European Games Developer Federation, which has said the deal will allow Microsoft to challenge Apple, Google and Tencent, is one of the participants.

Video game distributor Valve, video game publisher Electronic Arts and the German competition watchdog and its peers in Belgium, the Czech Republic, Finland, France, Italy, Portugal, Spain and Sweden will also be taking part in the event.

© Thomson Reuters 2023


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Call of Duty: Modern Warfare Crossed $1 Billion in Sales Within 10 Days of Launch, Says Activision

Videogame publisher Activision Blizzard beat Wall Street estimates for fourth-quarter adjusted sales on Monday, thanks to the success of the latest game in its Call of Duty franchise.

A string of launches in October and November, including

Call of Duty: Modern Warfare II, Warzone 2.0, and World of Warcraft: Dragonflight from the fantastical world of Azeroth, helped the company hold the attention of the gaming community.

As inflation squeezes budgets of American households, more gamers are expected to stick to their favorite gaming franchises, instead of experimenting with newer titles from other studios, helping companies such as Activision, analysts have said.

Modern Warfare II delivered the highest opening-quarter sell-through in the franchise’s history and crossed the $1 billion (roughly Rs. 8,275 crore) mark within 10 days of its late-October launch, the company said.

The company expects its full-year adjusted sales to grow at least in high-single digits, bolstered by the launch of games including Diablo IV.

Adjusted sales in the quarter ended December 31 came in at $3.57 billion (roughly Rs. 29,540 crore), compared with analysts’ average estimate of $3.16 billion (roughly Rs. 26,150 crore), according to Refinitiv data.

Activision’s upbeat results follow drab showings from rival Electronics Arts and Xbox maker Microsoft.

Activision’s $69-billion (roughly Rs. 5,70,100 crore) takeover by Microsoft is being challenged by the US Federal Trade Commission and being investigated by EU authorities. Activision said the companies are continuing to engage with regulators reviewing the transaction.

The end of Blizzard’s long-term partnership with China’s second-biggest gaming firm NetEase will rescind gamers’ access to the World of Warcraft game in the country until an alternative partnership is formed.

That is expected to hit the US company’s net bookings by $250 million (roughly Rs. 2,070 crore) in fiscal 2023, Benchmark analyst Mike Hickey wrote in a note last month.

Fourth quarter net income fell to $403 million( roughly Rs. 3,333 crore), or 51 cents per share, from $564 million (roughly Rs. 4,666 crore), or 72 cents per share, a year earlier.

© Thomson Reuters 2023


 

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Activision Blizzard Agrees to Pay $35 Million to Settle Workforce Allegations

Activision Blizzard has agreed to pay $35 million (nearly Rs. 290 crore) to settle allegations over the video game maker’s handling of workplace complaints and violations of whistleblower protection rules, US financial regulators said on Friday.

The Securities and Exchange Commission said the company knew employee retention issues were “a particularly important risk in its business” but did not have adequate measures in place to manage workplace misconduct complaints between 2018 and 2021.

The company, which makes the popular Call of Duty game, also required employees between 2016 and 2021 to tell the company if the SEC contacted them for information — a violation of whistleblower protection rules, the agency said in a statement.

Activision Blizzard failed to implement necessary controls to collect and review employee complaints about workplace misconduct, which left it without the means to determine whether larger issues existed that needed to be disclosed to investors,” said Jason Burt, who heads the SEC’s Denver office, said in a statement.

Representatives for the Santa Monica, California-based video game developer and publishing company, in a statement, said they were “pleased to have amicably resolved this matter” and had “enhanced” their workplace reporting and contract language.

Microsoft, which makes Xbox, had made a $69 billion (nearly Rs. 5,66,500 crore) bid to acquire Activision Blizzard, but the Federal Trade Commission asked a judge in December to block the transaction. EU authorities as also examining the deal. The FTC, which enforces antitrust law, argued that the deal would give Microsoft’s Xbox exclusive access to Activision games, leaving Nintendo consoles and Sony’s PlayStation out in the cold.

Michael Chappell, the FTC administrative law judge, will rule on the deal after hearings set for August 2023.

© Thomson Reuters 2023

 


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PlayStation CEO Jim Ryan Met EU’s Antitrust Chief to Discuss Microsoft’s Activision Deal

Sony’s gaming chief Jim Ryan met EU antitrust chief Margrethe Vestager on Wednesday to discuss Microsoft’s $69 billion (about Rs. 5,62,647 crore) bid for Call of Duty maker Activision Blizzard, a person familiar with the matter said on Thursday.

The meeting came as the EU competition watchdog prepares to warn Microsoft this week about the potential anti-competitive effects of the US software giant and Xbox maker’s acquisition in the biggest gaming industry deal in history.

Microsoft is looking to Activision to help it compete better with leaders Tencent and Sony. The latter has criticised the deal and even called for a regulatory veto.

The person declined to provide details of the discussion between Ryan and Vestager. The European Commission, which is scheduled to rule on the deal by April 11, did not immediately respond to a request for comment.

The US Federal Trade Commission has sued to block the deal while UK regulators have also expressed concerns, arguing it would give Microsoft’s Xbox exclusive access to Activision games, leaving Nintendo consoles and Sony’s PlayStation out in the cold.

An earlier report suggested that Microsoft argued that the deal would benefit gamers and gaming companies alike, offering to sign a legally binding consent decree with the FTC to provide Call of Duty games to rivals including Sony for a decade.

Michael Chappell, the FTC administrative law judge, will rule on the deal after hearings set for August 2023.

The deal currently faces scrutiny in the European Union which is to decide by March 23 whether to clear or block the deal.

© Thomson Reuters 2023


 

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Microsoft Activision Takeover: No ‘Substantive’ Settlement Talks With US FTC, Lawyer Says

There are no “substantive” settlement discussions under way between US President Joe Biden’s administration and Microsoft to resolve a legal dispute over the Xbox maker’s $69 billion (roughly Rs. 5,71,900 crore) bid for games maker Activision Blizzard, a Federal Trade Commission attorney said on Tuesday.

The FTC, which enforces antitrust law, asked a judge to block the transaction in early December, arguing it would give Microsoft’s Xbox exclusive access to Activision games, leaving Nintendo consoles and Sony’s PlayStation out in the cold.

FTC attorney James Weingarten, speaking in a brief telephonic pretrial hearing, said there were no “substantive” settlement discussions between the two sides under way.

Microsoft argues that the deal would benefit gamers and gaming companies alike, offering to sign a legally binding consent decree with the FTC to provide Call of Duty games to rivals including Sony for a decade.

The case reflects the muscular approach to antitrust enforcement being taken by the administration of US President Joe Biden. But antitrust experts say the FTC faces an uphill battle to convince a judge to block the deal, because of the voluntary concessions offered by Microsoft to allay fears it could dominate the gaming market.

Michael Chappell, the FTC administrative law judge, will rule on the deal after hearings set for August 2023. Either side can then appeal to the same FTC commissioners who voted to bring the challenge, and then to a U.S. appeals court.

The deal faces scrutiny in the European Union which is to decide by March 23 whether to clear or block the deal.

© Thomson Reuters 2023


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