New twist in the Microsoft-Activision soap opera. The takeover of the video game specialist by the computer giant, announced in January 2022 is again thwarted by the American competition authority which takes a dim view of this mega-deal at 69 billion dollars.
On Monday, the Federal Trade Commission (FTC) asked a federal court in San Francisco to temporarily suspend the operation that would make Microsoft the third largest player in video games, according to a summary consulted by AFP.
The FTC had already launched an administrative procedure to determine the risks ociated with this takeover, and a hearing is scheduled for early August. But press articles are circulating, “suggesting that Microsoft and Activision are seriously considering finalizing the acquisition” despite this procedure, notes the summary.
” To make things progress “
This new attempt to block the FTC does not seem to worry the two actors in the operation. The procedure should even “accelerate the process”, estimated Brad Smith, the president of Microsoft, on Twitter Monday. “We always prefer constructive, amicable methods with governments, but we are confident and look forward to presenting our case,” he added.
Today’s action by the FTC to file suit in our Activision case in federal court should accelerate the decision-making process. This benefits everyone. We always prefer constructive and amicable paths with governments but have confidence in our case and look forward to presenting…
—Brad Smith (@BradSmi) June 12, 2023
Bobby Kotick, the general manager of Activision Blizzard, also said to “welcome positively” this rebound which will make it possible to “move things forward”, according to an email to employees published on the company’s website. As a reminder, the publisher owns several phenomenal titles, which are played by tens of millions of people, from the shooter “Call of Duty” to the candy lines to explode on “Candy Crush”, ping by “Overwatch”, which has moreover a dedicated e-sports championship, the Overwatch League.
According to Bobby Kotick, the merger with Microsoft “allows two American companies to better compete against the international rivals that dominate the industry in the world”. In its line of sight, the Chinese Tencent, which owns Riot Games, the publisher of the global success “League of Legends”. And the Japanese Sony, which, with its Playstation, rules the video game market in Asia and beyond .
Branches in Europe
But these arguments are not enough to convince the FTC. According to her, “the proposed transaction would allow Microsoft to continue to take control of high-value video games”. Furthermore, “by controlling Activision’s content, Microsoft could, and would have an interest in, withholding such content, or lowering its quality in a way that would weaken competition, including in terms of quality, price and ‘innovation,’ says the federal agency.
The UK Competition Authority (CMA) shares this pessimism. In April, she vetoed the operation especially worried about the booming market of cloud gaming, these dematerialized games accessible in streaming indifferently on tablet, smartphone or computer.
The EU, on the other hand, gave the green light last month , after analyzing the solutions offered by Microsoft. The American group has in particular planned to grant free licenses to consumers for current and future Activision Blizzard games allowing them to play on any device, regardless of the operating system, for a period of ten years.