In continuation of last week’s post, the Federal Trade Commission (FTC) v. Microsoft (MSFT) hearing picked back up this past week with the final witnesses taking the stand and both sides giving their closing statements. As a reminder, the FTC is seeking a preliminary injunction to stop MSFT from closing the deal to acquire video games publisher Activision-Blizzard (ATVI) for $68.7 billion. MSFT on the other hand needs to close or renegotiate the deal by July 18th or they will owe ATVI a $3 billion break-up fee and their plans to further expand into the mobile games market will be back to square one.
Witness testimonies: This second week of the hearing we heard from a number of key witnesses on both sides, headlined by Sony CEO Jim Ryan and Microsoft CEO Satya Nadella. Ryan decided to make his appearance via video deposition (something he has been heavily criticized for with how outspoken he has been against the merger), while Nadella appeared in person. Additionally, these final three days of the trial also included Activision CEO Bobby Kotick, NVIDIA’s Jeff Fisher, SVP of developer relations at Nintendo Steve Singer, MSFT CFO Amy Hood, Xbox CFO Tim Stuart, and multiple economic experts. For the most in-depth breakdown of how these testimonies went, we’d recommend checking out Tom Warren’s witness-by-witness breakdown on The Verge.
Redactions (or lack thereof): In addition to what was discussed publicly on the stand, we were also privy to some confidential information that circulated on social media as a resulting combo of poorly made redactions and uploading mistakes by both parties and the court system. A special thanks to Sharpie for making this piece possible! According to these documents, at one point back in 2020 Microsoft was looking to acquire Sega, along with keeping their eyes on a list of potential acquisition targets that was over 100 publishers and developers long. Additionally, we got a good look at a number of Sony CEO Jim Ryan’s emails that heavily contrasted his worry-filled public statements about Call of Duty remaining on PlayStation. In one Ryan stated, “It’s not an Xbox exclusivity play at all…I’m pretty sure we will continue to see CoD on PS for years to come.”
What’s next?: We’ll all play the waiting game as Judge Corley reviews her notes and prepares to file her decision on if the FTC will be granted their requested preliminary injunction. If the injunction is granted, it is very likely that Microsoft and Activision Blizzard call off the merger. If the injunction is denied, there is a strong chance that MSFT and ATVI will look to close the deal ahead of their upcoming trial in the UK’s Central Administrative Tribunal (CAT) against the Competition and Markets Authority (CMA).
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