Microsoft’s Acquisition of Activision Blizzard Faces Regulatory Scrutiny
Microsoft’s surprise announcement of its plans to acquire Activision Blizzard in a $69 billion deal has drawn the attention of regulators worldwide. Concerns have been raised regarding the potential monopoly that this acquisition may create, posing a threat to market competition. Recently, the Federal Trade Commission (FTC) from the United States has officially confronted Microsoft over this matter, launching a series of hearings to determine whether the acquisition violates antitrust laws.
The main goal of the FTC at this stage is to obtain an injunction that would delay the completion of Microsoft’s acquisition until a major trial can take place in August. This trial will assess whether the Activision Blizzard acquisition indeed infringes antitrust laws.
As the hearings proceed, public court documents and testimonies from various parties involved have shed light on undisclosed secrets within the gaming industry. Revelations such as the possibility of future Bethesda games being released on the PlayStation platform, updates about “The Elder Scrolls 6,” Microsoft’s attempts to acquire other renowned game publishers including SEGA, Bungie, and Square Enix, as well as Sony’s claim that Microsoft attempted to discontinue their game business with a substantial financial offer have come to the forefront. Even sensitive information such as the production costs of PlayStation exclusives, The Last of Us Part 2 and Horizon 2, have unintentionally been exposed. Most recently, Nintendo has become entangled in this legal conflict, hinting at a connection to the successor of the Nintendo Switch.
One of the major points of opposition stems from concerns regarding the distribution of the “Decisive Moment” series. Sony strongly opposes the possibility of this popular shooting game franchise becoming exclusive to Xbox. Microsoft, on the other hand, has repeatedly emphasized that even after the acquisition is complete, they intend to ensure the series remains available on other platforms. In fact, Microsoft has entered into a ten-year contract with Nintendo and other manufacturers, guaranteeing the availability of “Decisive Moment” on their platforms.
However, opposition from entities like the FTC and Sony questions the validity of this commitment, pointing to the significant performance disparity between the Nintendo Switch and the PlayStation and Xbox consoles. Nonetheless, an email conversation between Activision Blizzard CEO Bobby Kotick and Nintendo President Shuntaro Furukawa was recently made public during the court proceedings. The conversation discussed the possibility of bringing the game to the planned successor of the Nintendo Switch. Of particular interest is Kotick’s hint that the undisclosed new Nintendo machine will possess performance capabilities similar to eighth-generation consoles such as the PS4/PS4 Pro and Xbox One/Xbox One X.
“With the tighter coherence of the eighth-generation console, and the games we offer on PS4 and Xbox One consoles, it’s reasonable to assume that we’ll be able to bring more complete content to the next-gen Switch as well,” said Bobby Kotick.
Kotick expressed regret during the hearing for not bringing the “Decisive Moment” series to the Switch platform earlier, acknowledging its impressive sales performance. However, he noted that specific information regarding the Switch successor model is still unavailable. Once the details are released, Activision Blizzard is likely to start preparing for future “Decisive Moment” games on the platform.
“I really think there’s a good chance we’ll be doing a Call of Duty game for the new Nintendo console. I can’t say exactly what’s planned just yet, but what I can say is that it’s definitely something we’re considering. When we have the details of the console’s specs, we’ll start digging deeper, but we don’t have that information yet. We’ve missed an entire generation of Switch consoles, but we still have to wait for the exact specs, so we’re still at this stage. There aren’t any plans for that,” Kotick stated.
As the hearings continue, the outcome will have significant implications not just for Microsoft and Activision Blizzard but for the gaming industry as a whole.