Microsoft and Activision chiefs testify that merger will benefit consumers

Microsoft and Activision chiefs testify that merger will benefit consumers

Microsoft Chief Executive Satya Nadella appeared in federal court on Wednesday to voice his support for open platforms and consumer choice, including the tech giant’s commitment to close its $70 billion acquisition of Activision Blizzard despite objections from regulators. underlined.

“If it were up to me, I’d love to get rid of the entire ‘exclusive’ on consoles,” Mr Nadella testified, rebutting claims from tech regulators that Microsoft’s deal for the video game giant would reduce competition. Will give and only restrict games from Activision. For players on Microsoft’s Xbox console. “I have no love for that world.”

A fourth day of hearings in US District Court in San Francisco that could determine the outcome of the deal was the highest-profile session, with Mr Nadella and Activision’s chief executive, Bobby Kotick, in attendance.

The Blockbuster acquisition challenge, led by Federal Trade Commission Chairwoman Leena Khan, is seen as a test of whether more aggressive efforts to curb the tech giants can be successful. The FTC is seeking a preliminary injunction that would prevent the companies from closing the deal before the agency has had a chance to argue its case in its internal court.

Microsoft has said such a long delay would likely doom the deal, a perspective Mr Kotick shared in his testimony on Wednesday.

FTC Arguments have been made that the merger would harm competition in the video game industry and harm consumers, as Microsoft could pull Activision’s games such as Call of Duty from rival Sony’s PlayStation console. Mr. Kotick promised that he has no intention of doing so, although the decision will ultimately not be his if his company is acquired.

Mr. Kotick said, “If you take sport off a platform, you’re going to have to revolt.” “This will damage the reputation of the company.” Mr. Nadella similarly said that he would not stop Call of Duty.

Under Ms Khan, the FTC has sued Meta, Microsoft and Amazon, arguing that Big Tech’s immense power over communications, social media and online commerce allows the companies to create monopolies and harm consumers.

After Microsoft announced early last year that it wanted to reshape its Xbox business by buying Activision, the company joined forces with other video game companies, such as Nintendo, to show regulators that the deal would benefit gamers. Will benefit and will not reduce access to Activision’s games.

Most government agencies, including the European Commission, were convinced. But in the UK, the FTC and the Competition and Markets Authority are trying to block the deal.

Court arguments have focused on the practice of exclusivity – releasing a highly anticipated game on only one console. Microsoft has repeatedly promised that it will not make Call of Duty exclusive to Xbox if it acquires Activision, and has offered Sony a contract to make that guarantee in writing.

But the FTC argued in court last week that Microsoft had moved quickly to buy ZeniMax Media and its gaming studios for $7.5 billion in 2020 when it realized that Sony, one of ZeniMax’s key upcoming games, Might pay to make Starfield exclusive to PlayStation. New ZeniMax titles, including Starfield, are now exclusive to Xbox.

Sony chief executive Jim Ryan testified in a recorded video statement that he thought that even if Call of Duty remained on the PlayStation, Microsoft would attempt to “move PlayStation gamers to the Xbox platform”. By somehow screwing up the Call of Duty experience on PlayStation.

“I believe they are going to use Call of Duty in some way to harm us,” Mr. Ryan said.

But Mr. Nadella testified that he opposed a limited approach to gaming.

“I grew up in a company that always believed that software should run on as many platforms as possible,” he said. “And I believe in him.”

Microsoft has tried to portray itself as the third player in a three-player console market dominated by Nintendo and Sony. Xbox head Phil Spencer said that as a third-place competitor, Xbox “wasn’t a strong business.”

Mr. Spencer acknowledged that Microsoft has discussed potentially excluding Activision games other than Call of Duty from the PlayStation.

The FTC has argued that Microsoft’s acquisition of Activision would give it an unfair advantage in the emerging market for gaming subscription services and cloud gaming.

Judge Jacqueline Scott Corley is expected to decide whether to grant an injunction before July 18, the day the deal is expected to close. At times, his court questions have cast doubt on some of the FTC’s arguments.

For example, the FTC tried to get Mr. Spencer to swear that he would put Call of Duty on PlayStation for at least 10 years, regardless of any conditions Sony sought as part of that agreement. Judge Corley felt that such a broad promise was unrealistic, especially if Sony asked for something unreasonable, such as receiving Call of Duty for free.

“Well, it won’t be for zero dollars,” Judge Corley said impatiently. “It is understood.”

David McCabe Contributed reporting from Washington.

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