US Judge To Rule On Microsoft’s Acquisition Of Activision Blizzard
Microsoft has made its final courtroom pitch in its battle to acquire Activision Blizzard, whose gaming arsenal includes the multibillion dollars series Call of Duty and World of Warcraft.
At stake is billions in potential gaming revenue through exclusive ownership of these games and the long-term shutting out of rival Sony PlayStation 5 access. Call of Duty itself has reportedly raked in $US27 billion since its launch. The deal itself is worth $US68.7 billion.
In the meantime, the US Federal Trade Commission (FTC), which fears a monopoly situation, has asked the federal district court to impose both a temporary restraining order and preliminary injunction to prevent the deal closing ahead of a final decision.
It’s a complex situation with the deal already sanctioned in Europe but blocked in the UK.
The deal deadline itself is July 18 and the FTC is concerned it will be finalised before a judgement.
The FTC’s request is also designed to prevent closure before other court proceedings. Microsoft is appealing against the UK veto in a hearing starting on July 28.
The current hearin’s final day focussed on Activision’s biggest game, Call of Duty, and the impact it would have on rival PlayStation through Microsoft gaining a monopoly.
In its closing arguments, the FTC said it would be hard to unravel the deal if it concluded before a judgement. It also focussed on how Microsoft would handle the acquisition based on its history of gaming acquisitions.
There are huge implications whatever Judge Jacqueline Scott Corley decides. According to reports, Microsoft faces at least a $US3 billion termination fee if the deal unravels. On the other hand, winning would see Microsoft and Xbox become the preeminent gaming platform ahead of decades-long rival Sony PlayStation, and billions more in revenue.
At the hearing, Microsoft stressed that the olive branch it offered Sony since September last year still stands. It was reported then that Microsoft would commit to PlayStation running Call of Duty for several more years. Polygon reported that Microsoft gaming chief Phil Spencer had the promise in writing to PlayStation CEO Jim Ryan in 2022.
A few more years doesn’t mean forever, and any deal may not include availability of Call of Duty on the PlayStation Plus subscription service once it appears on Microsoft’s Game Pass. Sony is not agreeable.
Complicating matters is an admission by Judge Corley that her son works for Microsoft. “It is common sense that a parent would want to support the financial success of their child’s employer in order to support their child’s financial stability and professional prestige,” said a letter by the Revolving Door Project.
Nevertheless Judge Corley is aiming to release her judgement before the July 18 deal deadline.