Microsoft has officially responded to the Federal Trade Commission (FTC) lawsuit that aims to block the company from completing its $68 billion acquisition of Activision Blizzard. In its response to the FTC, Microsoft reiterated that the deal has no chance to hurt the competition.
As you may know, Microsoft is currently in the third position in the console market, and the company also is a very minor player in the mobile games market. According to Microsoft’s documents provided to the FTC, Xbox and Activision Blizzard games only represented 4.3% of the global mobile gaming revenues in 2021.
The software giant argues that it’s buying Activision Blizzard to “grow its presence in mobile gaming” and to make Activision Blizzard’s games “more accessible to consumers.” That includes Call of Duty, the blockbuster franchise that Microsoft offered to continue shipping on PlayStation consoles for 10 years.
“The fact that Xbox’s dominant competitor has thus far refused to accept Xbox’s proposal does not justify blocking a transaction that will benefit consumers. Giving consumers high-quality content in more ways and at lower prices is what the antitrust laws are supposed to promote, not prevent,” Microsoft explained in its response to the FTC.
The company also repeated its previous argument that taking future Call of Duty games away from PlayStation gamers made “no financial sense,” especially when Activision Blizzard represents Microsoft’s biggest acquisition ever. “The reputational hit to Xbox would not be worth any theoretical economic benefit from taking Call of Duty away from competitors,” the company emphasized.
Activision CEO Bobby Kotick said in a statement that “There is no sensible, legitimate reason for our transaction to be prevented from closing.” The exec added that Microsoft and Activision “will prevail on the merits of the case.”
In a separate statement, Brad Smith, Vice Chair and President of Microsoft was slightly more nuanced and left the door open to negotiations. “Even with confidence in our case, we remain committed to creative solutions with regulators that will protect competition, consumers, and workers in the tech sector,” Smith said.
If the FTC appears determined to block the acquisition, the deal is also being scrutinized by regulators in the UK and EU. Microsoft initially expected to complete its proposed acquisition of Activision Blizzard by June 30, 2023, but the company will have to pay a break-up fee if regulators ultimately block the deal.