The fate of what is one of the biggest mergers in tech industry history may soon be out. A federal judge is set to decide whether to stop Microsoft from closing its deal to buy video game company Activision Blizzard. Lawyers for the Federal Trade Commission (FTC) and Microsoft trade their final blows and make their final points before a judge who has been asked to tap the brakes on the proposed $69 billion transaction.
Microsoft called its own CEO, Satya Nadella, and Activision CEO Bobby Kotick to testify in San Francisco federal court to reinforce its argument that the companies’ $69 billion tie-up won’t hurt competition in the markets for console and subscription-based games.
Nadella: No exclusives for me
Appearing for Microsoft on Wednesday, June 28, Microsoft CEO Satya Nadella sought to allay concerns that the game will hurt Sony and Nintendo. When asked if Microsoft would have any incentive to shut out Sony’s PlayStation in order to sell more Microsoft Xbox consoles, Nadella responded, “It makes no economic sense and no strategic sense.”
He reaffirmed his company’s promise to keep Call of Duty on rival Sony Corp’s PlayStation. Nadella said he would “100%” commit to keeping the Call of Duty shooter game on Sony’s gaming platforms. How game device makers use exclusive titles to beat competition has been a recurring theme in the FTC’s case against Microsoft. Nadella said that he personally doesn’t support content exclusivity on consoles. “If it was up to me, I would love to get rid of” exclusives on consoles, he said. But Sony, the dominant console market player, has “defined competition using exclusives,” Nadella said. “So that’s the world we live in. I have no love for that world,” he said. Here’s what he said:
“If it was up to me I would love to get rid of the entire exclusives on consoles, but that’s not for me to define especially as a low share player in the console market. The dominant player there [Sony] has defined market competition using exclusives, so that’s the world we live in. I have no love for that world.”
Why FTC is opposing the deal
FTC has asked a judge to stop the proposed acquisition because, it argues, it would give Microsoft, maker of the Xbox console, exclusive access to Activision games which include “Call of Duty,” one of the best-selling games of all time. That would leave Nintendo and Sony Group out in the cold, the FTC has said. Microsoft’s bid to acquire the “Call of Duty” videogame maker was approved by the European Union in May, but British competition authorities blocked the takeover in April.
The FTC argues the deal would harm Microsoft’s rivals, including Sony — if Call of Duty is excluded from PlayStation devices. The agency also says the deal would weaken competition in the up-and-coming cloud market, which lets gamers stream games to PCs and consoles rather than downloading them.
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