from the torpedoes-in-the-water! dept.
Four U.S. senators have torpedoed Microsoft's $69 billion deal for Activision. They believe that the consolidation of the high-tech industry and corporate culture of gender misconduct at Activision could expand by the transaction. Democrat senators think that the planned takeover could undermine employees' calls for accountability over alleged gender and sexual harassment at the game developer.
Senators Elizabeth Warren (D), Bernie Sanders (I), Cory Booker (D), and Sheldon Whitehouse (D) are distraught with the fact that Robert Kotick, chief exec of Activision, will remain at the helm of the game company until closing in 2023. With the same head, the culture of misconduct will not go away, they assume. Another point they are concerned about is the consolidation of the high-tech industry in general and its impact on the workforce. Given their concerns, they wrote a letter to the Federal Trade Commission in an attempt to block the deal.
"We are deeply concerned about consolidation in the tech industry and its impact on workers," the letter obtained by the Wall Street Journal reads. "This lack of accountability, despite shareholders, employees, and the public calling for Kotick to be held responsible for the culture he created, would be an unacceptable result of the proposed Microsoft acquisition."
[...] The senators demand that FTC oppose the deal if it finds that it can worsen the negotiating position between workers and companies (in this case, Microsoft represents both entities).
Microsoft Set to Purchase Activision Blizzard in $68.7 Billion Deal
Microsoft this morning announced plans to purchase gaming mega-publisher Activision Blizzard for a record-setting $68.7 billion. The move, when finalized, would bring franchises like Call of Duty, Overwatch, Diablo, World of Warcraft, Starcraft, and many more under the umbrella of the Xbox maker.
Today's announcement follows on Microsoft's $7.8 billion acquisition of Bethesda, announced just 15 months ago. After some initial confusion about what that meant for Bethesda's multiplatform titles, it has since become clear that most of Bethesda's biggest franchises, such as Elder Scrolls, will not be appearing on competing consoles such as the PlayStation 5.
In an encouraging sign for fans of Activision Blizzard's multiplatform games, Microsoft said in its announcement that "Activision Blizzard games are enjoyed on a variety of platforms and we plan to continue to support those communities moving forward." But Microsoft and Bethesda executives made similar positive noises about multiplatform titles before the deal was closed, only to shift towards Bethesda exclusivity after the deal was finalized.
Microsoft notes in its announcement that Activision Blizzard games would become a part of its Game Pass program, which currently enjoys 25 million subscribers. "With Activision Blizzard's nearly 400 million monthly active players in 190 countries and three billion-dollar franchises, this acquisition will make Game Pass one of the most compelling and diverse lineups of gaming content in the industry," the company said. "Upon close, Microsoft will have 30 internal game development studios, along with additional publishing and esports production capabilities."
UK government blocks Microsoft's proposed Activision purchase
In its long-awaited final report, the United Kingdom's Competition and Markets Authority said that Microsoft's proposed $69 billion acquisition of Activision would "result in a substantial lessening of competition" (SLC) in the supply of cloud-gaming services in the UK. As such, the regulator said that "the only effective remedy to this SLC and its adverse consequences is to prohibit the Merger."
The final report cites Microsoft's "strong position" in the cloud-gaming sector, where the company has an estimated 60 to 70 percent market share that makes it "already much stronger than its rivals." After purchasing Activision, the CMA says Microsoft "would find it commercially beneficial to make Activision's titles exclusive to its own cloud gaming service."
Microsoft has in recent months signed deals with Nvidia and smaller cloud-gaming providers in an attempt to "mak[e] even more clear to regulators that our acquisition of Activision Blizzard will make Call of Duty available on far more devices than before," as Microsoft Vice Chair and President Brad Smith said in a statement last month. But the CMA said these kinds of cloud-gaming deals—which Microsoft submitted to the CMA as a proposed remedy for any anticompetitive effects of the merger—were "limited to cloud gaming providers with specific business models" and thus not sufficient to address the regulator's concerns.
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For months now, Microsoft has sworn up and down that it has no interest in making Call of Duty exclusive to the Xbox if and when its proposed $69 billion Activision acquisition is approved. But as the FTC's request for an injunction stopping that acquisition heads toward opening arguments this week, the federal regulator cites one piece of what it calls "powerful evidence" that it can't trust Microsoft's assurances. In short, as the FTC puts it, "Microsoft's actions following its 2021 acquisition of ZeniMax speak louder than Defendants' words."
Rather than focusing on what it calls a "strained analogy" to ZeniMax, Microsoft would prefer the court look at Microsoft's purchase of Minecraft-maker Mojang, which has continued to publish the game on a variety of platforms after becoming part of Microsoft. This is a better analogy for Call of Duty, Microsoft writes, because Minecraft was similarly "an existing, multi-player, cross-platform franchise like COD."
Call of Duty is unlike Minecraft, the FTC argues, in part because Minecraft is available in largely the same form on mobile phones, tablets, and the Switch. "Even if Microsoft took Minecraft off of rival consoles and subscription and cloud gaming services, it would still be available for play on many other devices. The context for Call of Duty is very different."
Regardless, the FTC also argues that this manufactured categorization doesn't matter, because Microsoft's exclusivity decision applied to "all future ZeniMax games." While Microsoft said in 2021 that "some" future Bethesda games would be Xbox exclusives, no Bethesda non-exclusives have been announced since then.
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