Microsoft’s bid to buy Activision Blizzard just hit another snag.
Two technology giants are “expressing concerns” about Microsoft’s $68.7 billion bid to buy Activision Blizzard. Those concerns are not just going public for PR points; they are filings with the Federal Trade Commission.
Just last month, the FTC voted to block the deal. The issuance of the administrative complaint is just the beginning. Next, the allegations will be tried in a formal hearing before an administrative law judge.
“With control over Activision’s blockbuster franchises, Microsoft would have both the means and motive to harm competition by manipulating Activision’s pricing, degrading Activision’s game quality or player experience on rival consoles and gaming services, changing the terms and timing of access to Activision’s content, or withholding content from competitors entirely, resulting in harm to consumers,” the FTC said in its complaint.
Google and Nvidia weigh in
Now both Google and Nvidia are lending evidence to support the government’s case. As Bloomberg reports:
Alphabet Inc.’s Google and Nvidia Corp. have expressed concerns to the Federal Trade Commission about Microsoft Corp.’s acquisition of Activision Blizzard Inc., adding fuel to the government’s case against the $69 billion deal, according to people familiar with the matter.
The companies joined Sony Group Corp. in raising issues with the transaction, which the FTC sued to block in December. The commission has argued that the deal would hinder competition in the video-game industry and has scheduled an in-house trial for August. Either company could be called to testify as part of the FTC trial.
Google and Nvidia provided information that backs a key FTC contention — that Microsoft could gain an unfair advantage in the market for cloud, subscription and mobile gaming — according to the people, who asked not to be identified because the process is confidential. In its remarks to the FTC, Nvidia stressed the need for equal and open access to game titles but didn’t directly oppose the acquisition, according to one of the people.
Sony strongly opposes the deal
Google and Nvidia have different reasons for making their statements. In particular, Google views Microsoft as a direct competitor in cloud computing, mobile gaming, and search. Xbox Game Pass in particular has the potential to shift consumer dollars from the Google Play Store to Microsoft’s subscription service and in-game purchases.
Meanwhile, Sony argues that Microsoft’s acquisition would harm consumers. The Japanese tech giant and console maker argued that it was unlikely to replicate Call of Duty‘s success. Therefore, the merger would prove detrimental to its business if Call of Duty became an Xbox exclusive.
Even assuming that SIE had the ability and resources to develop a similarly successful franchise to Call of Duty, it would take many, many years and billions of dollars to create a challenger to Call of Duty – and the example of EA’s Battlefield shows that any such efforts would more than likely be unsuccessful.
For its part, Microsoft committed to bringing Call of Duty games to Nintendo consoles for 10 years. It made a similar commitment to Steam, which directly competes with Activision Blizzard’s Battle.net PC game launcher.