US Regulators to Decide Fate of Microsoft's $69 Billion Video Game Deal

In a court battle with American authorities on Thursday, Microsoft will seek approval to finalize a $69 billion acquisition of video game developer Activision Blizzard, transforming an industry larger than the combined movie and music sectors.

The battle will pit the United States against Microsoft's desire to broaden its influence in video games beyond its Xbox console against the Federal Trade Commission's attempt to stop a deal that it claims will harm consumers by stifling competition and innovation, as reported by ABC News.

The Judge Will Decide

Microsoft-Activision Deal Blocked By UK Competition Regulator

(Photo : by Belinda Jiao/Getty Images)
LONDON, ENGLAND - APRIL 26: A general view outside the Microsoft Experience Centre in Oxford Circus on April 26, 2023 in London, England. Microsoft's proposed acquisition of the video game developer Activision Blizzard was blocked by the UK's Competition and Markets Authority, which said the deal would reduce innovation and consumer choice. Microsoft, which needs the approval of regulatory bodies in the UK, United States and European Union, said it would appeal the decision.

During the five days of hearings in San Francisco before US lawmakers, Microsoft CEO Satya Nadella and Activision Blizzard CEO Bobby Kotick are both anticipated to give testimony. Jacqueline Scott Corley, district judge, will wrap up on June 29.

To demonstrate why Microsoft will gain an unfair advantage if it is permitted to combine its Xbox franchise with an Activision acquisition that will give it ownership of well-known video game franchises such as Call of Duty, World of Warcraft, and Candy Crush, FTC lawyers will consult experts and a top executive for Sony, the manufacturer of the industry-leading PlayStation video game console.

Corley will decide whether or not to approve the FTC's request for a court order to put the merger on hold until a more in-depth administrative trial is planned to commence in Washington, DC, after all the facts and arguments have been presented. August 2. A decision from the judge is not anticipated until after the Fourth of July vacation.

Microsoft may try to complete the transaction before the deadline of July 18 to avoid paying a $3 billion breakup fee if Corley decides not to issue an injunction.

A Game-Changer for Gamers

The controversy surrounding the acquisition has brought attention to the expanding significance of video gaming. This hobby has attracted an estimated 3 billion players worldwide who play at least some time on a console, personal computer, or-increasingly-a, smartphone.

Those players are prepared to shell out upwards of $70 to purchase high-profile games like Call of Duty or pay a recurring monthly fee for services like Microsoft's Xbox Game Pass, Amazon's Luna, and Nvidia's GeForce.

The proposed Activision merger is presented by Microsoft as a method to compete with Sony's PlayStation, which has a much higher market share while bringing new advantages to gamers. Microsoft contends that video gamers will have more access to even more games on its Xbox subscription service. It points to its 10-year commitment to making Call of Duty available on Nintendo's Switch device and its willingness to negotiate a similar 10-year contract with PlayStation.