A crucial decision regarding the fate of one of the largest mergers in the tech industry is on the horizon. A federal judge is preparing to determine whether Microsoft should be prevented from finalizing its acquisition of video game company Activision Blizzard. Both the Federal Trade Commission (FTC) and Microsoft presented their closing arguments in court, as they vied for their positions on the proposed $69 billion deal to be heard. To strengthen their case that the merger will not harm competition in the console and subscription-based gaming markets, Microsoft called upon their CEO, Satya Nadella, and Activision CEO Bobby Kotick to testify in the San Francisco federal court.
Nadella: No Interest in Exclusivity
During his appearance on behalf of Microsoft, CEO Satya Nadella addressed concerns about potential harm to Sony and Nintendo. When questioned about the possibility of Microsoft excluding Sony’s PlayStation to promote their Xbox consoles, Nadella dismissed the idea, stating it made no economic or strategic sense. He reaffirmed Microsoft’s commitment to keeping the game Call of Duty available on Sony’s gaming platforms. Nadella expressed his personal dislike for content exclusivity on consoles and mentioned that, if it were up to him, he would eliminate it entirely. However, he acknowledged that exclusivity has been defined as a form of competition by Sony, the dominant player in the console market. Nadella emphasized that he does not support this approach but recognizes it as the current reality.
FTC’s Opposition to the Deal
The Federal Trade Commission (FTC) is seeking to halt the proposed acquisition, arguing that it would grant Microsoft, the maker of Xbox consoles, exclusive access to Activision games, including the highly popular “Call of Duty.” The FTC claims that this would disadvantage Nintendo and Sony Group. The European Union approved Microsoft’s bid in May, but it was blocked by British competition authorities in April. The FTC contends that the deal would harm Microsoft’s competitors, especially Sony, if Call of Duty were excluded from PlayStation devices.
