Microsoft's Acquisition of Activision Blizzard Gets Green Light from Federal Judge

Microsoft's $69 billion acquisition of gaming powerhouse Activision Blizzard was approved by a federal court, disappointing US officials.

The US District Court for the Northern District of California verdict allows Microsoft to complete the purchase and preserve its gaming industry dominance. Microsoft will surpass Sony as the third-largest video game publisher globally, holding "Call of Duty," "World of Warcraft," and "Diablo," according to CNN.

In her 53-page opinion, District Judge Jacqueline Scott Corley explained that the US government had failed to present sufficient proof that the combined company would probably restrict "Call of Duty" from competing platforms like Sony's PlayStation or lessen competition in the markets for video game subscription services and cloud gaming.

This decision paves the way for Microsoft to either complete the purchase in the following days, before the July 18 contractual deadline, or to agree on an extension with Activision Blizzard mutually.

FTC's Lack of Evidence

Concerned about possible damage to consumers, the US Federal Trade Commission (FTC) had urged a temporary injunction to block the merger while legal processes took place.

The FTC had previously contested the merger in its internal administrative court and then in a US federal court, arguing that Microsoft's dominance of well-known properties would be detrimental to video gamers.

However, during a five-day hearing, Microsoft executives-including CEO Satya Nadella-explained that there would be no barriers preventing rivals from using services like "Call of Duty."

Microsoft negotiated multi-year license contracts with businesses like Nvidia and Nintendo in response to regulatory scrutiny, assuring that content would be accessible for those firms' platforms should the merger be approved.

Due to the expected time and money involved in the FTC's internal merger challenge, Microsoft admitted in its papers that a victory for the FTC at this point might essentially stop the whole purchase; thus, the stakes of the legal dispute were high.

The lack of evidence proving the company's motivation to make "Call of Duty" exclusive to Microsoft-owned platforms like Xbox led Judge Corley to rule in Microsoft's favor.

The court listed eight arguments in favor of Microsoft's case, emphasizing the likelihood of higher sales if the game were made accessible across many platforms.

Brad Smith, the president of Microsoft, thanked the court for its prompt and comprehensive judgment after the ruling. At the same time, Phil Spencer, the head of Xbox, stated that the FTC's allegations were refuted by the facts provided at trial and stressed the advantages of the merger for the gaming industry, per The Verge.

Bobby Kotick, CEO of Activision Blizzard, expressed his appreciation for the court's ruling and said that the merger would benefit customers and employees while promoting competition in the quickly expanding gaming sector.

What's Next?

On the other hand, the FTC expressed dismay with the verdict and said they planned to announce their following measures in the ongoing struggle to protect consumers and maintain competition.

The European Commission approved Microsoft's purchase in May, stipulating that Activision Blizzard titles may be played on services other than Xbox as well, Forbes reported.

When the merger was first announced in January, it caused some industry skepticism. Sony expressed worry about Activision Blizzard titles being made available on PlayStation. Microsoft offered a 10-year contract to guarantee that Call of Duty releases would remain unrestricted on PlayStation.

According to Microsoft President Brad Smith, the FTC's action is a "huge mistake" that would hurt competition, customers, and game creators. Smith maintained that the merger would be advantageous for gamers.

The gaming industry is keenly awaiting the effects of this significant consolidation on the global gaming scene as Microsoft is ready to complete its purchase of Activision Blizzard.