This past week saw the beginning of a monumental case between the Federal Trade Commission (FTC) and Microsoft (MSFT) to determine the future of MSFT’s $68.7 billion proposed acquisition of video games publisher Activision Blizzard (ATVI). As the plaintiff in the case, the FTC is seeking a preliminary injunction to prevent Microsoft from closing the deal ahead of a separate legal challenge that is set to begin on August 2nd. Microsoft has until July 18th to close the acquisition or renegotiate new terms or they will be forced to pay $3 billion in breakup fees to Activision Blizzard. While more than 40 countries have approved the deal, the UK’s Competition and Markets Authority (CMA) has joined the FTC in attempting to block the deal. Microsoft and Activision have since appealed the CMA’s late April decision and the case is set to commence in late July.
With two days into the case and three more to go, the heavy majority of news outlets covering the hearings would argue that Microsoft has been dominating thus far, as the FTC still seems to be learning how the video game industry actually operates. In terms of witnesses, we’ve seen both sides call quite a few to the stand, with the list so far including:
- Matt Booty, Head of Xbox Game Studios (Microsoft)
- Pete Hines, Head of Publishing at Bethesda (Microsoft)
- Sarah Bond, Corporate VP of Gaming Partnerships & Business Development (Microsoft)
- Phil Spencer, CEO of Gaming (Microsoft)
- Dov Zimrig, former Google Stadia executive (Google)
With high-profile cases like this one, there is a tendency for some key information about the inner workings of an industry to leak out (even through the literal thousands of redactions) and that has definitely been the case here as well. So far we have learned that the upcoming Indiana Jones game (in development at Machine Games) is currently planned as an Xbox console and PC exclusive. We’ve also learned that Microsoft was in acquisition talks with Square Enix a few years back and more recently in 2021 with Zynga before Activision-Blizzard became an option and Zynga ended up being acquired by Take Two Interactive. Over the weekend more news broke about MSFT’s acquisition talks with a number of other publishers and developers from SEGA to IO Interactive, per uploaded court documents. The main themes across all of these being Microsoft seemingly looking to strengthen its presence in mobile, expand Game Pass offerings, and hold competitors back from signing content exclusivity deals.
So what’s next? The case resumes on Tuesday, June 27th and continues through closing arguments on Thursday, June 29th with a plethora of new witnesses set to take the stand over the next couple days including key witnesses from NVIDIA and Sony (by video). There is still a long road ahead for the deal to pass in favor of MSFT and ATVI, but at least for now both companies seem committed to seeing it through.
Image from: Reuters
