The tables have turned in the favor of Microsoft, all thanks to U.S. Federal Judge Jacqueline Scott Corley, who handed down a decisive ruling that gave the tech giant the green light to move forward with its $69 billion acquisition of Activision Blizzard.
This moment marks an important milestone in what’s considered the largest deal in the history of the tech industry, which lays the groundwork for a dramatic transformation of the future gaming landscape.
In her ruling, Judge Corley clarified that the Federal Trade Commission, which challenged the multi-billion-dollar merger, failed to establish proof of its claims. The FTC had argued that the proposed vertical merger could considerably curtail competition within the industry. However, Judge Corley differed, stating the evidence actually pointed towards increased consumer access to Activision’s content, most notably, the Call of Duty franchise.
3/We know that players around the world have been watching this case closely and I’m proud of our efforts to expand player access and choice throughout this journey. END
— Phil Spencer (@XboxP3) July 11, 2023
Microsoft has been resolute in its public, written, and in-court commitments to ensure the continuation of Call of Duty on PlayStation for the next decade, a decision welcomed by Judge Corley. In addition, the judge viewed favorably Microsoft’s plans to introduce the game to Nintendo Switch and its agreements to deploy Activision’s content across several cloud gaming services for the first time.
In terms of the gaming market, the court accepted that while Microsoft considered Nintendo Switch as a key player in the console market, the FTC could rightfully claim it as an outlier. Interestingly, Judge Corley sided with FTC on the premise that the console market doesn’t include PCs.
After the release of the judgment, Brad Smith, President of Microsoft, expressed gratitude for the swift and comprehensive decision by the San Francisco Court, expressing hope for similar resolutions in other parts of the globe. The Xbox head, Phil Spencer, echoed a similar sentiment, lauding the court’s prompt decision, stressing that the Activision Blizzard deal is for the benefit of the industry. He challenged the FTC’s claims around console switching, multi-game subscription services, and cloud as being misaligned with the current realities of the gaming market.
In an exhaustive 53-page decision, Judge Corley systematically dismantled the FTC’s arguments, remaining unswayed by all of the analysis presented by Harvard economics professor, Robin Lee. Lee’s assertion that Microsoft would be financially incentivized to make Call of Duty exclusive to Xbox console was found lacking, as it failed to account for the franchise’s continued presence on PC, its forthcoming arrival on Switch, and its accessibility via cloud gaming as well as the PlayStation deal, which is presumably still o the table.
It’s impossible to overstate the broader impact of this ruling as it extends well beyond the immediate parties involved. During the trial, a slew of previously confidential information came up, including Microsoft’s attempt to acquire Square Enix and SEGA as well as the company’s older plans to outspend Sony, among other things.
Nevertheless, the judge deemed the said instances irrelevant to the case as they didn’t involve Call of Duty and other live-service, multiplatform multiplayer games.
While the FTC plans to appeal the decision, it’s becoming less and less likely that Activision Blizzard won’t fall under the Microsoft Gaming umbrella soon.
All that’s left now is for Microsoft and Activision to Blizzard to beat the final boss: the Competition and Markets Authority in the UK.
As we await the final outcome of this nearly-two-year-long ordeal, we can keep ourselves busy by checking out the latest on Call of Duty. The current iterations of the long-running marquee franchise recently welcomed The Boys to the foray. It’s believed that this year’s new entry will be out later this year, as expected, and that a handful of NBA players have already gotten their hands on the game.
