Microsoft Wins FTC Fight To Buy Activision Blizzard, 5 Things To Understand From This

The US Federal Trade Commission attempted to stop Microsoft Corp. from completing its $69 billion acquisition of Activision Blizzard Inc., but the court granted Microsoft Corp. permission to proceed.

With the exception of the UK, which refused the transaction in May, Microsoft can now attempt to complete its merger with Activision before a deadline of July 18 according to Judge Jacqueline Scott Corley’s ruling in San Francisco. Know 5 Key points to understand from this merger. 

Microsoft Acquires Activision Blizzard to Expand into Mobile Gaming

Microsoft has claimed that it bought Activision in order to increase its reach in the mostly untapped mobile gaming sector. Activision is the owner of King, the developer of Candy Crush. 

According to Microsoft, the merger will boost the company into third place among all video game firms worldwide, after Sony Corp. and League of Legends producer Tencent Holdings Ltd. of China.

Activision and Microsoft declined to respond right away. Activision increased as much as 6% in response to the news, and at 11:08 a.m. in New York, it was up 4.4% to $86.31. Microsoft’s loss to $330.06 was less than 1%.

This merger has clear threat – FTC spokesman

As per the media reports FTC spokesman Douglas Farrar said in an email, “We are disappointed in this outcome given the clear threat this merger poses to open competition in cloud gaming, subscription services, and consoles. In the coming days, we’ll be announcing our next step to continue our fight to preserve competition and protect consumers.”

Critics Concerned About Microsoft’s Increased Power

Scott Corley’s decision rejected the FTC’s request for a preliminary injunction, which attempted to halt the merger on the grounds that it would be harmful to gamers. 

The Federal Trade Commission said during a hearing in June that Microsoft’s acquisition of Activision would hurt competition because the new entity would have an incentive to keep popular games like the best-selling shooter Call of Duty off of competing consoles and subscription services.

Actively monitoring of mergers by the largest tech platforms

The case was a component of FTC Chair Lina Khan’s initiative to be more actively monitoring mergers, particularly those by the largest tech platforms. The FTC has blocked mergers involving Lockheed Martin Corp. and Aerojet Rocketdyne Holdings Inc. as well as Nvidia Corp.’s attempt to acquire SoftBank Group Corp.’s Arm since President Joe Biden named her to lead the agency in June 2021.

Will Microsoft Use Its Increased Power to Hurt Rivals?

After Activision Blizzard’s Candy Crush and Call of Duty Mobile are added by the software giant, Microsoft’s meagre mobile gaming presence will gain some traction. According to analytics company NewZoo, mobile gaming is the fastest-growing sector of the gaming market and is worth $92 billion, or half of the worldwide gaming market.

There is a likelihood are concerns that Microsoft would use its increased power to hurt rivals like Sony by limiting access to its blockbuster titles or by releasing additional games only for Xbox and PC.

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