FTC sues to Block M$-Activision deal

[iceberg_is_on_fire]

Microsoft FTC response

https://fm.cnbc.com/applications/cnbc.com/resources/editorialfiles/2022/12/22/20221222_9412_Resp_Microsofts_Answer_PUBLIC.pdf

It is therefore unsurprising that after nearly a full year investigating this transaction, receiving millions of Microsoft and Activision documents, and speaking to over a dozen witnesses, there is no evidence that Xbox intends to take Call of Duty away from PlayStation—or any platform at all. No emails, no text messages, no testimony. There is one reason for that: Xbox does not intend to take that step

Xbox has made this same offer to other competitors, and at least one (Nintendo) has accepted to date. Sony refuses to deal. But a vertical merger causes anticompetitive harm only when the acquired input is "essential." If Call of Duty were truly essential, Sony would have no reason to refuse

The Complaint’s reference to Microsoft’s recent acquisition of ZeniMax—a set of gaming studios acquired in 2020—has no relevance to the current transaction. After that transaction
closed, ZeniMax’s first two new games were made exclusive to PlayStation for one year postlaunch. Xbox anticipates that three future titles — all of which are designed to be played primarily alone or in small groups—will be exclusive to Xbox and PCs. But consistent with its historic approach, Xbox has continued to release new updates of existing ZeniMax games such as Fallout 76 and Elder Scrolls Online on both Xbox and PlayStation, because these games are designed to be played together by broad communities of gamers on different platforms. This last set of games is the one most analogous to Call of Duty. So the ZeniMax experience cuts against the idea that Xbox would make that game exclusive. And it is not just the ZeniMax games where Xbox has taken this approach; Xbox has also expanded (not contracted) access to Minecraft, a similar multiplayer game with a large existing community of gamers who play together from different platforms, since it was acquired. If there were any remaining doubt, Xbox’s offer to put Call of Duty on other platforms on commercially favorable terms for those platforms should eliminate it.

Seems pretty clear to me. This holds true in all regions.

ABK's response is even more forceful

https://fm.cnbc.com/applications/cnbc.com/resources/editorialfiles/2022/12/23/20221222_9412_Resp_Activisions_Answer_PUBLIC.pdf

Third, the FTC's made-for-litigation markets defy economic reality. The FTC has invented highly gerrymandered relevant product markets—including a "high-performance console" market limited to Xbox and PlayStation consoles, as well as individual markets for multi- game subscriptions and cloud gaming—in an attempt to support its conclusory theories of harm. But even a cursory view of well-established facts demonstrates that these markets are entirely artificial. For example, the concept of a "high-performance console" market that excludes the Nintendo Switch is patently ridiculous. Nintendo competes directly with PlayStation and Xbox, offering many of the same games and targeting the same gamer demographics. Indeed, [a lot of redacted]. Different strategies of competing for consumer spend, like the Switch's innovative mobile capability, do not define a separate relevant market, despite the FTC's misguided attempts to claim otherwise.

The FTC's disregard for these benefits to consumers and focus on supposed harms to Xbox's deep-pocketed competitors betrays a fundamental disconnect between the FTC's theories and the antitrust laws' underlying purpose, which is to protect competition, not competitors. The FTC is asking this Court to protect the world's largest gaming companies from further competition from Xbox, and thereby turning antitrust on its head. Blinded by ideological skepticism of high- value technology deals and by complaints from competitors, the FTC has not only lost sight of the realities of the intensely competitive gaming industry, but also the guiding principles of our nation's antitrust laws.

Second, the FTC's assertion that Call of Duty games are a "powerful influence" on platform adoption is baseless, contrived, and lacking in any legal significance. Courts have long held that a vertical merger can only cause anticompetitive harm when the acquired input is "essential." Call of Duty is a popular and successful game franchise, but it is far from being "essential" or even a "powerful influence" on consumer behavior, as the FTC contends. Indeed, no game or franchise is important enough to make or break a gaming platform. Call ofDuty games offered on consoles, PCs, and mobile devices face intense competition from games across all types and genres, and new hit games developed by small studios regularly skyrocket to success seemingly out of nowhere. This highly dynamic environment provides consumers with infinite choices beyond Call of Duty. In particular, China-based gaming companies have been aggressively expanding in the U.S. by investing in U.S. gaming companies (e.g., Tencent's 40% stake in Epic Games, developer of Fortnite) and funding start-up gaming studios, all while enjoying protected access to the largest revenue opportunity in gaming at home in China. If Xbox were to cut off any of its platform competitors from Call of Duty, gamers using those platforms would simply move to alternative games instead. What's more, Sony has many high-quality existing games and an unrivaled war chest of intellectual property spanning movies, television, and music, upon which it can draw to develop even more games and franchises. If Xbox were to remove Call of Duty from PlayStation, Sony has more than enough weapons in its arsenal to continue to compete effectively.

The FTC's wildest supposition is that Activision content would be available on subscription and cloud gaming services if not for the merger. The FTC alleges that the Transaction would harm Xbox's competitors for multi-game subscription and cloud gaming services because Activision might otherwise one day make its content available to those companies. These allegations are not only facially speculative and conclusory, they are entirely divorced from the facts. Activision's aversion to multi-game subscriptions and cloud gaming is widely known in the industry and is supported by ample testimony and evidence in the investigative record in this case. The only plausible "but for" scenario here is that Activision's new releases would not be available on subscription or cloud gaming services at all absent the Transaction, meaning that Xbox's plans to bring Activision games to subscription and cloud can only be viewed as output enhancing and overwhelmingly procompetitive. A theory premised on the notion that Xbox can withhold from its competitors something they never would have had access to in the first place reeks of desperation and is destined for failure.

 

[5n0man]

Why is msft constantly getting hit by the gov but they approve monopoly mergers and other bullshyt

They aren’t constantly getting hit by the government. The reason they're being harder on these deals now is because they're having to deal with the consequences allowing monopoly mergers in the past.

Their hesitancy makes sense when you think about how much they're struggling dealing with how big Amazon, Meta, and Google have got.

 

[The Mad Titan]

 

[Canon]

MS crying about their deep pocketed competition while trying to buy a company for 50 billion or whatever the fukk.

What a bytch ass company. Some judge gonna roll there eyes at that nonsense.

 

[ORDER_66]

Xbox's DEEP POCKETED competitors?!!? Muthafukka what!?!!?

 

[ORDER_66]

MS crying about their deep pocketed competition while trying to buy a company for 50 billion or whatever the fukk.

What a bytch ass company. Some judge gonna roll there eyes at that nonsense.

They in the twilight zone fam for real!!!! They really expect people to believe Sony got more money than them, THEY just brought an entire gaming conglomerate for billions in zenimax!!!! da fukk!!!??

 

[Gizmo_Duck]

MS crying about their deep pocketed competition while trying to buy a company for 50 billion or whatever the fukk.

What a bytch ass company. Some judge gonna roll there eyes at that nonsense.

And the irony of kotick saying that, a scumbag ass nikka trying to break away with a half a billion dollar pay day

 

[MajesticLion]

Microsoft tells judges its $69 billion Activision deal would benefit gamers | CNN Business

Microsoft Corp said on Thursday its $69 billion bid to buy "Call of Duty" maker Activision Blizzard would benefit gamers and gaming companies alike.

www.cnn.com

Microsoft tells judges its $69 billion Activision deal would benefit gamers


Microsoft Corp said on Thursday its $69 billion bid to buy “Call of Duty” maker Activision Blizzard would benefit gamers and gaming companies alike.

Microsoft (MSFT) made the argument in a filing aimed at convincing a judge at the US Federal Trade Commission to allow the deal to proceed, after FTC commissioners said the merger would hamper competition in the gaming industry in a complaint this month aimed at blocking the deal.

In a complaint on Dec. 8, the FTC said its concern was that Activision’s popular games, including “World of Warcraft” and “Diablo,” potentially would stop being offered on devices that rival Microsoft’s Xbox. It set a hearing before an administrative law judge for August 2023.

Microsoft President Brad Smith said in mid-December the company had offered to sign a legally binding consent decree with the FTC to provide “Call of Duty” games to rivals including Sony and others for a decade.

“The acquisition of a single game by the third-place console manufacturer cannot upend a highly competitive industry. That is particularly so when the manufacturer has made clear it will not withhold the game,” Microsoft said in Thursday’s filing.

Smith said in a statement this week he was still confident in the company’s legal case but remained “committed to creative solutions with regulators.”

Activision CEO Bobby Kotick said in a statement on Thursday he believes that the companies will prevail in a legal fight with the trade commission.

The Biden administration has taken a more aggressive approach to antitrust enforcement. The US Department of Justice recently stopped a $2.2 billion merger of Penguin Random House, the world’s largest book publisher, and smaller US rival Simon & Schuster.

The Microsoft deal is also facing scrutiny outside the United States, with the European Union saying it would decide by March 23, 2023, whether to clear or block the deal.

 

[iceberg_is_on_fire]

Microsoft tells judges its $69 billion Activision deal would benefit gamers | CNN Business

Microsoft Corp said on Thursday its $69 billion bid to buy "Call of Duty" maker Activision Blizzard would benefit gamers and gaming companies alike.

www.cnn.com

I mean, it will. Microsoft will lift other Activision IP from purgatory. Microsoft doesn't need Call of Duty as much as Activision did. Going from a yearly cycle to bi-annually with a large dlc in the middle and placing it on Nintendo platforms is a better option.

 

[ORDER_66]

I mean, it will. Microsoft will lift other Activision IP from purgatory. Microsoft doesn't need Call of Duty as much as Activision did. Going from a yearly cycle to bi-annually with a large dlc in the middle and placing it on Nintendo platforms is a better option.

You really believe that bullshyt???

 

[Pressure]

You really believe that bullshyt???

You get a ps5 for Christmas?

 

[ORDER_66]

You get a ps5 for Christmas?

nah.... ive got more important things to do...

 

[Pressure]

nah.... ive got more important things to do...

 

[ORDER_66]

 

[daze23]

I mean, it will. Microsoft will lift other Activision IP from purgatory. Microsoft doesn't need Call of Duty as much as Activision did. Going from a yearly cycle to bi-annually with a large dlc in the middle and placing it on Nintendo platforms is a better option.

yep, currently COD is the worst kind of GAAS. they want you to pay for micro-transactions, season passes, etc, and buy a $70 game every year