The fate of what could be the most expensive merger in tech industry history will soon be in the hands of a federal ruling on who will have to save Microsoft from striking its deal to buy video games.
SAN FRANCISCO (AP) — The fate of what could be the costliest merger in tech industry history will soon be in the hands of a federal ruling on who will have to save Microsoft from striking a deal to buy corporate video game Activision Blizzard.
The federal antitrust government has filed a lawsuit to block the $69 billion acquisition that they say will hurt the festival between Microsoft and competition from games like Sony and Nintendo.
But Microsoft largely had the upper hand in the five-day federal court hearing in San Francisco that ends Thursday, calling CEO Satya Nadella and other executives, adding former Activision Blizzard CEO Bobby Kotick to testify in favor of the merger. .
The Federal Trade Commission, which enforces antitrust laws, asked the U. S. district judge to do so. U. S. Jacqueline Scott Corley to consider an injunction that would temporarily prevent Microsoft and Activision from reaching the settlement before the FTC issues an internal judgment on whether to review it in a trial in August.
Both Microsoft and Activision have warned that such a retention would force them to abandon the agreement they signed 17 months ago. Microsoft has promised to pay a $3 billion breakup payment to Activision if the deal ends by July 18.
“The relief sought through the FTC is unprecedented, but it is also destructive,” Beth Wilkinson, Microsoft’s leader, said in a final written defense filed Thursday.
Sony, the deal’s top vocal opponent in the gaming industry, has told regulators it fears Microsoft will deprive its dominant PlayStation game console of popular Activision franchises like Call of Duty or offer a stripped-down edition of the titles to ensnare players into abandoning PlayStation. for Microsoft’s Xbox system.
Nadella, Kotick and other Microsoft witnesses sought to allay those concerns this week, saying it’s better for companies to keep games like Call of Duty on platforms and that removing it from PlayStation would provoke a backlash from gamers.
“The option to make Call of Duty exclusive to Xbox has never been evaluated or discussed with me, or even discussed in any of the presentations or discussions with the board,” Microsoft Chief Financial Officer Amy Hood said in a written statement. Testimony presented before Thursday’s hearing. Hood sat in the courtroom Thursday but was not invited to speak.
But the FTC’s lead lawyer in the case, James Weingarten, sought Thursday to undermine Microsoft’s claims that it doesn’t care much about making games exclusive. Activision Blizzard, as well as its 2021 acquisition of top game maker Zenimax for $7. 5 billion.
Xbox CFO Tim Stuart asked about the confusion he caused when he said at an investor convention in 2020 after the Zenimax deal announced Microsoft’s long-term plan to differentiate its platform by making its games “either first or best. “or better.
Stuart showed that there have been internal discussions about how a drop in sales resulting from the creation of exclusive Xbox games can be offset by cash generated through the promotion of more Xbox consoles and subscriptions to Microsoft’s monthly Game Pass subscription service.
Since then, Microsoft has created some of Zenimax’s games, such as the upcoming Xbox-exclusive Starfield release. But in reaction to considerations about the Activision deal, Microsoft has introduced binding agreements to keep Call of Duty on other platforms for at least a decade. Nintendo agreed to such a deal for its Switch console, while Sony rejected it.
Microsoft and the FTC are expected to provide their closing arguments on Thursday.
The deal also faces opposition from the main regulator, the U. K. Competition and Markets Authority, while other countries and the European Union have backed it.
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