On Tuesday, Federal Judge Jacqueline Scott Corley revealed its ruling against the Federal Trade Commission (FTC) in the case of Microsoft’s $69 billion acquisition of the gaming giant’s Activision Blizzard, with a deadline to close the deal before July 18.
The acquisition, if succeed, will be the biggest acquisition of gaming company in the history of gaming industry and could shape the future.
Throughout the trial, the focus was mainly directed at possibility of whether high-end gaming, from the likes of Xbox and PlayStation are to be perceived as two separate entities. Distinctive from other platforms such as PC, Nintendo, and most importantly the cloud gaming branch of the industry.
In its allegations, the Federal Commission highlights the acquisition could heavily affect consumers as well as the rivalry in the console gaming industry.
At the time, Microsoft stood its ground and defended the $69 billion deal of the gamin mogul, endorsing it with a tactical maneuver that stood in the way of Sony’s market dominance with its PlayStation 5.
The ruling’s impact on the future of gaming remains uncertain. It opens doors for Microsoft to reshape the industry, potentially leveraging its position to make strategic exclusivity deals and drive competition with Sony. However, the judge’s dismissal of Microsoft’s past discussions regarding exclusivity deals, such as with Sega and Square Enix, suggests that such strategies may face scrutiny.
In its 53-page decision, the Federal Judge ruled that the “court’s responsibility in this case is narrow. It is to decide if, notwithstanding these current circumstances, the merger should be halted – perhaps even terminated – pending resolution of the FTC administrative action. For the reasons explained, the Court find the FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition.”
“To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content. The motion for a preliminary injunction is therefore DENIED,” it added.
The ruling against the FTC does not completely resolve the situation, as the commission can still attempt to appeal the decision. However, the likelihood of derailing the deal at this stage seems low. Additionally, the Competition and Markets Authority (CMA) in the UK, which previously announced its intention to block the deal, has indicated a willingness to engage in discussions with Microsoft and Activision Blizzard to address their concerns. Microsoft’s President, Brad Smith, expressed that they are prepared to negotiate with the CMA on final remedies to gain approval for the deal.
Beyond the gaming landscape, the ruling underscores the increasingly intertwined relationship between technology and entertainment. The digital era has transformed the way people consume and interact with media, and Microsoft’s acquisition of Activision Blizzard further solidifies its position as a major player in the entertainment industry.
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