Microsoft and Nintendo sign a deal for Call of Duty
Defending the Microsoft X-Box Game Deal with FTC Commissioners: The Case for Mobile Devices and the Digital Markets Act
The vote from FTC Commissioners today means Microsoft will have significant obstacles to overcome in getting its deal done. Regulators in the UK and EU are also scrutinizing the deal closely, despite Microsoft’s repeated attempts to appease regulators.
Brad Smith, Microsoft’s president, said in a statement Thursday that the deal will create more opportunities for game developers and expand competition. We have been committed to addressing competition concerns since day one and offered concessions to the FTC earlier this week. While we believed in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present our case in court.”
Bobby Kotick wrote in a email to employees that the FTC suit may sound “alarming”, but he remains confident that the deal will close. “The allegation that this deal is anti-competitive doesn’t align with the facts, and we believe we’ll win this challenge,” he said.
The outcome of today’s meeting will determine whether or not Microsoft goes to court in Europe and beyond to defend its deal.
The deal has been scrutinized by officials in the United Kingdom and European Union. But the FTC complaint marks the first attempt by an antitrust regulator to block the deal outright.
The initial offer by Microsoft to keep Call of Duty on Sony’s consoles for years beyond a marketing deal was described by Jim Ryan as inadequate on many levels. Ryan says that Sony was planning on keeping some details of its negotiations private. Ryan said that he did not intended to comment on the private business discussion, but that he had to because Phil Spencer had brought it to his attention.
Spencer said that the Digital Markets Act is one of the things that they are planning for. I think it is a big opportunity. Microsoft has a small presence in mobile gaming right now, and the Xbox maker admitted that in a filing with the UK’s Competition and Markets Authority (CMA) last year: “Microsoft currently has no meaningful presence in mobile gaming and the [Activision Blizzard] transaction will bring much needed expertise in mobile game development, marketing and advertising.”
Microsoft accused Sony of paying developers to keep their content off of the Xbox Game Pass service, while Sony argued that Microsoft’s acquisition could hurt developers and lead to price rises.
Microsoft has confirmed Starfield will be exclusive, and that The Elder Scrolls VI will only be available on its platforms.
There is no sensible, legitimate reason for our transaction to be prevented from closing. Our industry has enormous competition and few barriers to entry. There are more and more devices that enable players to play a wide range of games. Engines and tools are freely available to developers large and small. There is a wide range of distribution options for games. We believe we will prevail on the merits of the case.
We are committed to finding creative solutions with regulators so that they can protect competition, consumers, and workers in the tech sector. As we’ve learned from our lawsuits in the past, the door never closes on the opportunity to find an agreement that can benefit everyone.
Call of Duty franchises in the EU: a close-door Microsoft-Sony showdown after the acquisition of Activision Blizzard
Smith mentions Call of Duty more generally, but he doesn’t offer any details on what franchises these may come from.
Microsoft and Sony’s gaming chiefs are both preparing to meet with EU regulators today in a showdown over Microsoft’s proposed acquisition of Activision Blizzard. The case for the deal to proceed will be argued by senior Microsoft executives in a closed-door hearing while Jim Ryan will speak for Sony at the same time.
Smith said they are more than willing to address the concerns others have, regardless of whether it is by contract, or by regulatory undertakings.
The proposal that involves selling off the Call of Duty business is a structural one that seems to be favored by the CMA, even though it is open to behavioral remedies. The European Commission wants to make a final decision on Microsoft before the April 11th deadline and any remedies the company might need will be highlighted today.
Microsoft is getting ready to launch its Xbox mobile gaming store as soon as next year. The software giant revealed its plans for an Xbox mobile store last year, and now Xbox chief Phil Spencer says the company is building the store in the anticipation of companies like Apple and Google being forced to open up their mobile app stores.
Microsoft and Spotify want the EU Digital Markets Act to force Apple and Google to change how they distribute apps, and open up their platforms and stores to competition.
