Microsoft Corp won a court’s okay to move forward with its $69 billion deal to buy Activision Blizzard Inc., defeating an effort by the US Federal Trade Commission to block the largest ever gaming deal.
The decision by Judge Jacqueline Scott Corley in San Francisco means Microsoft can seek to close its merger with Activision ahead of a July 18 deadline everywhere except for the UK, which vetoed the deal in May.
Microsoft has said it struck the deal to acquire Activision in order to add mobile games - an area where it has virtually no presence. Activision owns King, the maker of Candy Crush. The combination will vault Microsoft to the No. 3 slot among global video-game companies behind China’s Tencent Holdings Ltd, the publisher of League of Legends, and game console rival Sony Corp., Microsoft had said.
Microsoft and Activision declined to immediately comment.
“We are disappointed in this outcome given the clear threat this merger poses to open competition in cloud gaming, subscription services, and consoles. In the coming days we’ll be announcing our next step to continue our fight to preserve competition and protect consumers,” FTC spokesman Douglas Farrar said in an email.
In a decision, Scott Corley denied the FTC’s preliminary injunction, which sought to block the deal on the grounds it would harm gamers. At a June hearing, the FTC argued Microsoft’s acquisition of Activision would harm competition since the combined company would have an incentive to withhold key titles, like top-selling shooter game Call of Duty, from rival consoles and subscription services.
The lawsuit was part of an effort by FTC Chair Lina Khan to more aggressively police mergers, particularly those by the biggest tech platforms. Since President Joe Biden appointed her to helm the agency in June 2021, the FTC has killed mergers between Lockheed Martin Corp. and Aerojet Rocketdyne Holdings Inc. as well as Nvidia Corp.’s bid to buy SoftBank Group Corp.’s Arm.
Microsoft’s paltry mobile gaming presence will see a boost after the tech giant rolls in Activision Blizzard’s Candy Crush and Call of Duty Mobile. Mobile gaming is the fastest-growing segment of the gaming industry and is valued at $92 billion “- half of the global gaming market, according to analytics firm NewZoo.
However, critics have concerns that Microsoft will use its new leverage to disadvantage competitors like Sony by decreasing access to its blockbuster titles or publishing more games exclusively to Xbox and PC.
