On Tuesday, a judge approved Microsoft’s $69 billion acquisition deal of Activision Blizzard (ATVI.O), thwarting President Joe Biden’s antitrust attempts.
On Tuesday afternoon, Activision shares were up 10% at $91.02 and Microsoft’s Activision deal shares were marginally lower after U.S. District Judge Jacqueline Scott Corley in San Francisco rejected the administration’s claim that the deal would hurt consumers by giving Xbox game console-maker Microsoft exclusive access to games like “Call of Duty.”
The U.S. and Britain have opposed the largest videogame contract and Microsoft’s largest deal ever. After the U.S. judge’s order, Britain’s Competition and Markets Authority (CMA) indicated it would investigate Microsoft’s antitrust suggestions, suggesting a resolution.
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Corley gave the FTC until Friday to appeal the ruling.
The FTC said that Microsoft may utilize Activision games to hurt Nintendo (7974.T) and Sony Group (6758.T).
“The FTC has not shown it is likely to succeed on its assertion the combined firm will probably pull Call of Duty from Sony PlayStation, or that its ownership of Activision content will substantially lessen competition in the video game library subscription and cloud gaming markets,” she said.
PwC estimates gaming market revenues will rise 36% to $321 billion in four years.
The Biden administration’s efforts to minimize consumer costs, which have included agreements to lower insulin prices and eliminate airline ticket “junk fees,” were set back by Corley’s decision.
The FTC was “disappointed in this outcome given the clear threat this merger poses to open competition in cloud gaming, subscription services, and consoles,” according to Douglas Farrar. We’ll announce our next move to defend competition and consumers in the coming days.”
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Microsoft President Brad Smith thanked the “quick and thorough” judgment. He tweeted that he would now consider how to modify the transaction to address the CMA’s concerns.
“It does seem like Microsoft and the CMA could work out a deal within the next couple of weeks,” said D.A. Davidson & Co analyst Franco Granda.
“World of Warcraft,” “Diablo,” and “Candy Crush Saga” are also Activision bestsellers.
The FTC complained about console, subscription, and cloud gaming competitive loss.
Microsoft pledged to license “Call of Duty” to rivals, including a 10-year arrangement with Nintendo, if the merger closed to satisfy the agency. Microsoft CEO Satya Nadella claimed in June’s five-day trial that the business had no motivation to exclude Sony’s PlayStation or other rivals to sell more Xbox consoles.
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