Microsoft And Activision-Blizzard Merger Approved By Federal Judge
After a year of legal hurdles, promises, and agreements, Microsoft’s acquisition of Activision Blizzard has finally been approved by the federal judge. Following the conclusion of the FTC vs. Xbox case, in which the Federal Trade Committee tried to block the acquisition, and FTC’s failure to prove how the acquisition would affect market competition, even the UK’s Competition and Markets Authority, the final obstacle Xbox has to overcome, reached out to Microsoft with negotiations in mind.
According to Gizmodo, a California judge has greenlit Microsoft’s acquisition of Activision-Blizzard, which is the largest acquisition in the gaming and tech industries, after the FTC failed to show how the acquisition would significantly impact market competition and thus harm the consumers.
In her ruling, the judge wrote that the acquisition of this size deserves scrutiny, but Microsoft has committed, both publicly and in writing, that it won’t restrict Call of Duty or other ABK titles from other platforms and that it will bring ABK’s game portfolio to cloud-based gaming systems.
A California judge greenlit Microsoft’s acquisition of Activision-Blizzard, which is the largest acquisition in the gaming and tech industries.
Furthermore, the judge stated that the court’s decision was to decide if the Microsoft × Activision Blizzard merger should be stopped and perhaps even terminated. However, the court found that the FTC hasn’t shown any likelihood that this particular merger in the gaming industry may substantially and adversely affect the competition.
In fact, the record evidence from the trial point to more widespread access to high-profile ABK gaming titles across various platforms, especially since Microsoft previously made deals with Nintendo about bringing CoD on its console.
From what we could gather, the FTC won Xbox’s case for Xbox, thus granting Microsoft the green light it needed to acquire Activision Blizzard. Please note that while other online outlets may treat this as a merger—and many of them are reporting it as such—this is actually an acquisition according to business practices and principles.
A merger would imply that two companies agree to combine resources and operations and form a new entity, which isn’t the case with Microsoft and Activision Blizzard.
While other online outlets may treat this as a merger—and many of them are reporting it as such—this is actually an acquisition.
This is a classic acquisition in which Microsoft will take either a controlling stake or full ownership of Activision Blizzard, which is something the FTC fought against, believing that it would allow Microsoft to suppress its competitors from accessing the Xbox platform. Anyone with basic math skills could see that that course of action isn’t financially viable, so why would Microsoft poke a hole in its own fattening wallet?
During the FTC vs. Xbox trial, the Commission repeatedly acted like it was protecting the interests of Microsoft’s competition when it should, in fact, protect the consumers—something the court has reprimanded the FTC for.
The Commission even pointed out the Bethesda acquisition, which resulted in Starfield being an Xbox exclusive, drawing parallels on how the same could happen if Microsoft bought Activision Blizzard.
But the truth will set us free; it was revealed that, prior to the Bethesda acquisition, Sony was interested in acquiring Starfield as an exclusive, as well as PlayStation’s ani-competitive behavior towards Xbox in Japan.
This turned the FTC’s argument against the Commission. So, it’s easy to see just how the Commission won Xbox’s case for Xbox. In light of the new ruling, the UK’s CMA reached out to Microsoft with the suggestion to pause the ongoing legal battle surrounding the Activision Blizzard acquisition to hopefully negotiate a new deal.
