Yesterday, Politico broke a vague (and slightly clickbaity) story that claimed four anonymous sources within the FTC are raising the prospect of the big U.S. regulator suing to block the deal between Microsoft and Activision. Indeed, Microsoft is trying to spend $69 billion dollars to get the Call of Duty, Candy Crush, and Warcraft maker under its umbrella, with hopes of bolstering Xbox Game Pass in the fight against Apple and Google's mobile gaming duopoly. Sony with its PlayStation division has come out strongly against the deal, as you might expect, despite Microsoft's guarantee that Call of Duty will remain on PlayStation "as long as a PlayStation exists."
According to some onlookers like industry analyst Michael Pachter, the FTC's case against the deal is an attempt to win concessions in writing from Microsoft without having to take the deal to court — something Pachter expects would go badly for the FTC. Indeed, there's little precedent for a blocker on this kind of deal, and when you examine the game industry properly, it's among the more competitive and vibrant industries out there, save for Google and Apple's stranglehold over mobile app stores (an actual monopoly that the FTC should investigate).
US FTC “likely” to be crushed in court, which is why they won’t sue This gets resolved by Microsoft agreeing to a list of demands to maintain the status quo; FTC drops its objections https://t.co/vA0BBURtlqNovember 24, 2022
Regardless, Activision's CCO recently put out a statement to us and publicly in a tweet suggesting that Activision is ready to fight for the merger in court, if necessary. Lulu Cheng Meservey emphasizes that Microsoft and Activision are working with regulators to address their concerns, too.
We're committed to continuing to work cooperatively with regulators around the globe to allow the transaction to proceed, but won't hesitate to fight to defend the transaction if that's needed.November 24, 2022
There's little doubt in my view that the deal will pass eventually. Regulators are right to investigate and scrutinize the deal. Regulators of yesteryear failed to properly assess how Meta's purchase of Instagram and WhatsApp may limit consumer choice and innovation, for example, while also allowing Google and Apple to get away with a blanket monopoly on how software can be served up on practically all mobile devices in the world.
Windows by comparison is completely open, with a vast array of competing storefronts and businesses. Microsoft has repeatedly brought up the Apple-Google mobile duopoly in its responses to regulators, noting its plans to eventually build a competing Xbox app store for mobile, which it potentially hopes regulators will eventually force Apple and Google to allow onto their platforms.
As the EU, UK CMA, and U.S. FTC continue to assess the merger, I suspect we'll continue hearing about it for the foreseeable. Microsoft has previously said that it hopes to close the deal by the summer of 2023.
And hey, while you're here ... why not check out our Xbox Black Friday Deals live blog?! It's good, I promise. — Jez
- Gaming headset deals: Best Buy | Walmart | Amazon | Razer | Dell
- Xbox controller deals: Amazon | Razer | Dell | Walmart | Best Buy
