Acquisition of Activision Blizzard: According to Microsoft President and Vice Chairman Brad Smith, PlayStation has many more exclusive titles, so the Xbox acquisition of Activision Blizzard is reasonable.
Smith stated at an annual shareholders meeting, as quoted by Bloomberg, that Microsoft will cite Sony’s hegemonic position in the market as one of the justifications for its $68.7 billion acquisition of Activision Blizzard.
The Federal Trade Commission (FTC), which had earlier in December indicated that it would seek to prevent the purchase, will now be challenged by the corporation in court. According to Smith, the FTC’s case is based primarily on the market they have recognized as having only two businesses and two products, Sony PlayStation and Microsoft Xbox.
“Sony holds 70% of the global market, while we own the remaining 30%. Therefore, the judge’s first consideration will be whether the FTC complaint will foster competition or merely serve to shield the biggest competitor from it.”
According to Smith, Xbox only offers 59 exclusive games, compared to PlayStation’s 286. Therefore, the administrative law judge will have to assess whether going from 59 to 60 poses such a threat to competition that he should prevent this from proceeding.
I like that this story breaks out of the reductive "Lina Khan vs. Big Tech" framing. As @leah_nylen makes clear, the push to revive antitrust is about the whole economy— from hospitals to rocket ships to sporting goods. https://t.co/YIlj2oPGer
— Gilad Edelman (@GiladEdelman) December 15, 2022
When the FTC declared on December 8 that it intended to halt the acquisition, it claimed that Xbox would “gain control of top video game franchises” and thus “harm competition in high-performance gaming consoles and subscription services by denying or degrading rivals’ access to its popular content.”
The European Commission and the UK’s Competitions and Market Authority have opened investigations into the transaction, showing that the FTC is not the only government agency that has expressed worry about it.
With the FTC filing a legal complaint against Microsoft/Activision Blizzard, I spoke to @HoegLaw and @davidbhoppe about its chances of blocking the deal and what happens nexthttps://t.co/zsEbZR3p5i
— James Batchelor (@James_Batchelor) December 14, 2022
Frequently Asked Questions
Why is FTC suing Microsoft?
About Microsoft's $69 billion offer to acquire Activision Blizzard, the parent company of LinkedIn, the Federal Trade Commission has filed a lawsuit. After weeks of rumoured negotiations between the FTC, Microsoft, and rival Sony, the agency filed action after claiming that the agreement would restrict competition in the gaming sector.
When will Activision deal close?
"People from across our business units and functions have been involved in this regulatory work, and I want to thank each of you for your tireless work and commitment to completing this merger, which we continue to expect to close in Microsoft's current fiscal year ending June 2023."
Final Lines
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