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Xbox Microsoft refutes Sony’s claims that its Activision acquisition is anti-competitive

Update, looks like it is blocked for now, per VGC:

Since its announcement back in January 2022, Microsoft has come under a lot of scrutiny with both regulators and rival companies raising concerns over the acquisition. By December, the FTC moved to sue Microsoft's Activision purchase, although this wouldn't have necessarily blocked the deal itself. Later, on the heels of the UK regulator CMA's decision to block the Activision deal, the FTC proceeded to file a preliminary injunction request. Now it appears that the federal court has moved in favor of the FTC's request.

As per the order, Microsoft and Activision won't be able to complete the deal until "after 11:59 p.m. Pacific Time on the fifth business day after the Court rules on the FTC’s request for a preliminary injunction." Alternatively, it would be a date set by the court should that fall later. The court has also set June 22 and 23 for an evidentiary hearing on the preliminary injunction. So it's unlikely that Microsoft and Activision will close things off by this month, though the deadline for the transaction's completion is July 18. Incidentally, if Microsoft fails to renegotiate an extended deadline the company will be liable to Activision Blizzard for a $3 billion breakup fee.
 
Demon_Skeith said:
Update, looks like it is blocked for now, per VGC:

Since its announcement back in January 2022, Microsoft has come under a lot of scrutiny with both regulators and rival companies raising concerns over the acquisition. By December, the FTC moved to sue Microsoft's Activision purchase, although this wouldn't have necessarily blocked the deal itself. Later, on the heels of the UK regulator CMA's decision to block the Activision deal, the FTC proceeded to file a preliminary injunction request. Now it appears that the federal court has moved in favor of the FTC's request.

As per the order, Microsoft and Activision won't be able to complete the deal until "after 11:59 p.m. Pacific Time on the fifth business day after the Court rules on the FTC’s request for a preliminary injunction." Alternatively, it would be a date set by the court should that fall later. The court has also set June 22 and 23 for an evidentiary hearing on the preliminary injunction. So it's unlikely that Microsoft and Activision will close things off by this month, though the deadline for the transaction's completion is July 18. Incidentally, if Microsoft fails to renegotiate an extended deadline the company will be liable to Activision Blizzard for a $3 billion breakup fee.
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I don't think that Microsoft will fold their hands with respect to this. Although, I'm very surprised this deal have dragged for too long.
 
Update, read from tweaktown:

Based on assessment of key business figures, testimony from Xbox CEO Phil Spencer, and a recently-published bombshell email from Sony Interactive Entertainment CEO Jim Ryan, Sony is likely to sign a Call of Duty deal with Microsoft to ensure the $31 billion franchise says on PlayStation.

Microsoft has said it wants to keep Call of Duty on PlayStation, and Xbox Gaming CEO Phil Spencer's recent testimony at a court hearing over the Activision merger adds more weight to this assertion.

Below we have a quick transcription of one of the exchanges between FTC lawyer James Weingarten and Phil Spencer in relation to making Activision games exclusive to Xbox. In the exchange, Spencer mentions that the current financial model is based on Activision games staying on PlayStation--including Call of Duty.

Q You've had conversations at Microsoft about skipping PlayStation with Activision titles, yes or no?

It seems like a normal conversation that we would have.

Q You have had those conversations?

I don't remember specific conversations, but we would have had conversations about that, yes. I remember the result we came up with, which was the financial model that includes Activision games continuing to ship on PlayStation.

This model was approved by Microsoft's top management and the offer was made. The acquisition offer was presented to Activision's board of directors, who approved it, and the overwhelming majority of Activision's shareholders also approved the merger offer.

Elsewhere in the testimony, Phil Spencer discusses the process to Microsoft counsel Beth Wilkinson:

"We build a financial analysis to help us give a range of what we could afford to pay for a company and still feel like we have the right returns," Spencer said.

The gaming CEO continues, saying that he is beholden to keeping his commitments based on the proposed deal model:

"The commitments that I make to the board around financial return of any acquisition, especially one of nearly $70 billion, I look at it as critical to my job function to deliver on the results that I commit to the board and the company, and manage an effective and growing business."

"The financials...the size of Call of Duty, the role it plays in the valuation of buying Activision, [it would] make it financial impossible for us to recover...for us losing Call of Duty on its largest platform. There's significantly more players on PlayStation than Xbox, as we know. There's a lot more PlayStations on Xboxes, and the game is very successful on both," Spencer said.

As far as Sony's side of the negotiations, Spencer indicates that Sony "has to allow" Microsoft to ship the game on their platform. It's not up to Microsoft on whether or not Call of Duty actually ends up on PlayStation. Sony has to agree to a deal.
 
cm2 said:
Update, read from tweaktown:

Based on assessment of key business figures, testimony from Xbox CEO Phil Spencer, and a recently-published bombshell email from Sony Interactive Entertainment CEO Jim Ryan, Sony is likely to sign a Call of Duty deal with Microsoft to ensure the $31 billion franchise says on PlayStation.

Microsoft has said it wants to keep Call of Duty on PlayStation, and Xbox Gaming CEO Phil Spencer's recent testimony at a court hearing over the Activision merger adds more weight to this assertion.

Below we have a quick transcription of one of the exchanges between FTC lawyer James Weingarten and Phil Spencer in relation to making Activision games exclusive to Xbox. In the exchange, Spencer mentions that the current financial model is based on Activision games staying on PlayStation--including Call of Duty.

Q You've had conversations at Microsoft about skipping PlayStation with Activision titles, yes or no?

It seems like a normal conversation that we would have.

Q You have had those conversations?

I don't remember specific conversations, but we would have had conversations about that, yes. I remember the result we came up with, which was the financial model that includes Activision games continuing to ship on PlayStation.

This model was approved by Microsoft's top management and the offer was made. The acquisition offer was presented to Activision's board of directors, who approved it, and the overwhelming majority of Activision's shareholders also approved the merger offer.

Elsewhere in the testimony, Phil Spencer discusses the process to Microsoft counsel Beth Wilkinson:

"We build a financial analysis to help us give a range of what we could afford to pay for a company and still feel like we have the right returns," Spencer said.

The gaming CEO continues, saying that he is beholden to keeping his commitments based on the proposed deal model:

"The commitments that I make to the board around financial return of any acquisition, especially one of nearly $70 billion, I look at it as critical to my job function to deliver on the results that I commit to the board and the company, and manage an effective and growing business."

"The financials...the size of Call of Duty, the role it plays in the valuation of buying Activision, [it would] make it financial impossible for us to recover...for us losing Call of Duty on its largest platform. There's significantly more players on PlayStation than Xbox, as we know. There's a lot more PlayStations on Xboxes, and the game is very successful on both," Spencer said.

As far as Sony's side of the negotiations, Spencer indicates that Sony "has to allow" Microsoft to ship the game on their platform. It's not up to Microsoft on whether or not Call of Duty actually ends up on PlayStation. Sony has to agree to a deal.
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They should get together and have an official compromise. We are tried already of all the back and forth dragging.
 
Microsoft has a forced hand but giving a competitor money because of the law makes me feel like there is no free market. People buy PS5 for exclusives and Call of Duty doesn't happen to be one of them.
 
There were a lot of solid arguments Microsoft had. It goes to show that if your argument is against a big acquisition, you need to back it up. At one point the FTC made a number out of thin air without proof when they didn't have the effort or competence to come up with why. These marbles look like they are in favor of how much information and money Microsoft has and their ability to reason with their end goals.
 
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