Microsoft responded Thursday to a complaint brought by the Federal Trade Commission (FTC) to halt the company’s $68.7 billion acquisition of Activision Blizzard, claiming that the deal would not harm competition in the video game industry.
At the beginning of the month, the FTC filed a complaint to block the purchase, claiming that the software giant would “harm competition” among gaming console manufacturers like Sony and Nintendo. In response, Microsoft said in its application that the purchase would make the Xbox division of the company more competitive.
Microsoft argued in its 37-page answer that “Xbox intends to increase its footprint in mobile gaming” and that “three quarters of Activision’s players and more than a third of its profits originate from mobile offers.” Xbox thinks it’s smart business to expand the availability of Activision’s few popular titles on more platforms at lower prices.
The agreement, which was revealed earlier this year, is the biggest in the history of both the software developer and the video game industry. Microsoft, which also produces the Xbox video gaming device, has been in contact with authorities all around the globe in an attempt to get clearance for its purchase. Microsoft has previously said that it anticipates closing the purchase in the summer of 2023.
The FTC’s action against Microsoft is a significant step by the US government in its ongoing crusade against the IT sector, which has seen the likes of Microsoft, Apple, Amazon, Alphabet, and Meta rise to become among of the world’s most valuable corporations. In the midst of this expansion, critics and authorities have questioned if the IT sector has become too dominant.
In its action filed on December 8th, the agency stated that Microsoft had utilised previous purchases to make some high-profile forthcoming products unique to devices powered by its software, such as the space exploration game Starfield and the vampire shooting shooter Redfall. Microsoft said in its petition that it gave Sony the option of selling the military shooter as part of Sony’s PlayStation Plus subscription, but that “Sony refuses to deal.”
In response, Microsoft argued that the purchase of a single game by the third-place console maker could not derail a highly competitive market. “This is especially true when the developer has explicitly said that it would not delay the game from release. Simply because Xbox’s main rival hasn’t accepted Xbox’s offer yet doesn’t mean that customers shouldn’t be able to profit from the deal.”
Microsoft has expressed its desire for a mutually beneficial, peaceful outcome.
Microsoft President and Vice Chair Brad Smith stated in a statement, “Even with confidence in our case, we remain dedicated to innovative solutions with regulators that will safeguard competition, customers, and employees in the digital industry.”
There is no reasonable, valid reason for our transaction to be blocked from completing,” Activision CEO Bobby Kotick said in a second statement on Thursday defending the purchase.
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