Microsoft Battles U.S. Regulators in $69 Billion Activision Blizzard Takeover

Technology giant Microsoft is gearing up for a critical faceoff with U.S. regulators this Thursday, as it seeks approval to finalize its $69 billion acquisition of video game developer Activision Blizzard. The outcome of this high-stakes legal battle will have far-reaching implications, as the deal has the potential to reshape the gaming industry, a pastime that currently surpasses the combined revenue of the movie and music sectors.

Microsoft’s CEO, Satya Nadella, and Activision Blizzard’s CEO, Bobby Kotick, are expected to make appearances and testify during the five-day hearings in San Francisco, in support of the acquisition that was initially announced 17 months ago. Their testimonies will serve as key moments to persuade regulators that the merger will not hinder competition or stifle innovation.

The U.S. Federal Trade Commission (FTC) is vigorously opposing the merger, arguing that it will grant Microsoft an unfair advantage and impede market competition. The FTC lawyers plan to present expert opinions illustrating how the blending of Microsoft’s Xbox franchise with the Activision acquisition would give the tech giant an upper hand.

In an interesting twist, the FTC will call upon a top executive from rival Sony, the maker of the leading PlayStation video game console, to testify against Microsoft. This move aims to bolster the argument that the merger could lead to a substantial imbalance in the gaming industry.

The acquisition of Activision would grant Microsoft ownership of highly popular video game titles such as Call of Duty, World of Warcraft, and Candy Crush. However, a judge will ultimately decide whether to grant the FTC’s request for a court order, temporarily pausing the deal until an administrative trial commences on August 2. A final decision is not expected until after the Fourth of July holiday.

Should the judge decline to issue an injunction, Microsoft would have the opportunity to close the deal before the July 18 deadline, avoiding a hefty $3 billion breakup fee. Microsoft is positioning the proposed Activision acquisition as a strategic move to challenge Sony’s PlayStation dominance, as the latter currently holds a considerably larger market share.

As the legal battle unfolds over the next few days, the technology and gaming industries will be eagerly awaiting the outcome, which could reshape the landscape of gaming and have significant implications for both Microsoft and the broader gaming community.