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.
Previously:
US Moves to Block Microsoft's Activision Takeover - 20230613
Microsoft and Activision Will Miss Their Contractual Merger Deadline - 20230115
FTC Moves to Block Microsoft's Activision Acquisition - 20221209
The Biggest Deal in Gaming is Under Fire From U.S. Senators - 20220403
Related:
Microsoft Acquires ZeniMax Media and Bethesda Softworks for $7.5 Billion - 20200921
Related Stories
Microsoft purchases Bethesda Softworks in industry-changing acquisition
Major game franchises like Doom, Fallout, The Elder Scrolls, and more will soon be Microsoft properties. That's because the Xbox and Windows maker announced Monday morning it is buying the corporate parent of Bethesda Softworks, ZeniMax Media.
"Like us, Bethesda are passionate believers in building a diverse array of creative experiences, in exploring new game franchises, and in telling stories in bold ways," Microsoft wrote in its announcement. "All of their great work will of course continue and grow and we look forward to empowering them with the resources and support of Microsoft to scale their creative visions to more players in new ways for you."
Also at Wccftech.
See also: Microsoft's ZeniMax Media Acquisition Was A "Surprisingly Low Price," Claims Analyst
The Biggest Deal In Gaming Is Under Fire From U.S. Senators:
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).
Previously:
Microsoft Set to Purchase Activision Blizzard in $68.7 Billion Deal
The Federal Trade Commission has announced that it intends to sue to block Microsoft from acquiring Activision. Regulators are making the argument that Microsoft is doing this to use its control of game catalogs to make more and more games exclusive to the XBox in an effort to gain market share from its competitors, which is a violation of anti-trust law.
In a complaint issued today, the FTC pointed to Microsoft's record of acquiring and using valuable gaming content to suppress competition from rival consoles, including its acquisition of ZeniMax, parent company of Bethesda Softworks (a well-known game developer). Microsoft decided to make several of Bethesda's titles including Starfield and Redfall Microsoft exclusives despite assurances it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles.
"Microsoft has already shown that it can and will withhold content from its gaming rivals," said Holly Vedova, Director of the FTC's Bureau of Competition. "Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets."
Microsoft's Xbox Series S and Series X are one of only two types of high performance video game consoles. Importantly, Microsoft also offers a leading video game content subscription service called Xbox Game Pass, as well as a cutting-edge cloud-based video game streaming service, according to the complaint.
The FTC has scheduled a hearing for August 2, well after the deal is supposed to close:
The US Federal Trade Commission (FTC) has thrown a monkey wrench into Microsoft's plan to acquire Activision. According to a scheduling order filed last week, the FTC's antitrust lawsuit hearing against the deal will not begin until August 2. This date is well past the contracted deadline of July 18, 2023, effectively triggering a breach in the agreement.
Technically, a failed closure would require Microsoft to pay Activision a $3 billion "breakup fee." However, since something outside of Microsoft's and Activision's control is causing the delay, it's more likely the two will have to start over and cut a new deal. What that means is as yet unclear.
The original agreement was to pay Activision $95 per share, a 40-percent premium over its then $65 market price. Since then, Activision's stock has traded in the mid-to-high 70s. It is currently priced at $76.90, theoretically putting Activision in a better bargaining position for a redeal.
However, Activision's public stance has been that it wants the merger just as much as Microsoft does. So it's within the realm of possibility that the two shake hands and say, "Same deal."
Microsoft and Activision agreed to the merger nearly a year ago. At the time, both companies expected to have the acquisition closed as early as November 2022. However, the record-breaking $68.7 billion buyout immediately got the attention of multiple regulators in several countries, including the FTC.
US moves to block Microsoft's Activision takeover:
The US Federal Trade Commission (FTC) said the deal, which would be the largest in the history of the video games industry, could "substantially lessen competition" in the sector.
The move comes after the UK blocked the deal over concerns it would hurt competition, but the EU approved it.
A trial in the US will begin in August.
The FTC said in a court filing that a "preliminary injunction is necessary to... prevent interim harm" while the regulator determines whether "the proposed acquisition violates US antitrust law".
Microsoft's proposed takeover of Activision has split global regulators, and in order for the deal to go through the parties need approval from regulatory bodies in the UK, the EU and the US.
The European Commission has approved the acquisition, saying that Microsoft's offer of 10-year free licensing deals - which promise European consumers and cloud game streaming services access to Activision's PC and console games - mean there would be fair competition in the market.
But the UK's Competition and Markets Authority (CMA) blocked the deal in April, saying it was concerned the takeover would offer reduced innovation and less choice for gamers.
Microsoft and Activision hit out at the decision and said they would appeal.
(Score: 5, Touché) by Rosco P. Coltrane on Monday June 26 2023, @08:42AM
Now that's a shocker. Sheesh... And here I was, thinking Microsoft was true to their word. Now my illusions are dashed.
(Score: 5, Interesting) by Barenflimski on Monday June 26 2023, @09:57AM (3 children)
It is mind blowing to me that when it comes to anything Microsoft related, that Call of Duty could hold any of this up.
Microsoft tracks everything. Microsoft adds ads to just about everything. Microsoft's 'dark patterns' are ubiquitous.*
All I can come up with in my little brain is, "Microsoft can harvest data down to my location and sell it to people, but the FTC cares about Call of Duty being available to kids on as many platforms as possible?" Lets be clear. This is a game where you will be called the N word within 60 minutes of logging on and playing. In that 60 minutes, you'll likely be berated in 20 other ways that would get any kid suspended from school. Just a couple of days ago, an entire group of adults wouldn't play with me on their team because I was white and they expressed, in very colorful language, how much they hated white people.
I can't stand the corporate ethos of Microsoft OR Activision, but for sake of humanity, the FTC is upset about Call of Duty?
*Dark Patterns - Log onto MSN.com, and they randomly show you a RED notification that insinuates you have mail. It seems to be a randint(6). Windows 11... Install NOW! I've accidentally started the windows 11 update twice. One time, the only way to get around their menus was to reboot before I had to choose. Read an article on MSN.com on your phone, and some randint(8) times, you get a prompt about how you can't read the article on their site, but have to install their app. Clear cookies, click link again its readable.
(Score: 1, Informative) by Anonymous Coward on Monday June 26 2023, @11:54AM
Reddit does this. Sometimes when you click to expand a comment thread, you get a warning window saying something about "may contain adult content (language)" and the only choices you're presented are "Take Me Home" and "Download Reddit App." I had this happen to me yesterday.
(Score: 0) by Anonymous Coward on Monday June 26 2023, @12:19PM
Well...the FTC is part of the government, and the government loves its recruiting tools. Gotta have an endless stream of wannabe soldiers for the next war they're going to get us into...
(Score: 2) by GloomMower on Monday June 26 2023, @02:28PM
I mean, this is specifically about Microsoft buying activision, not the other stuff, so of course they are looking at games.
(Score: 3, Touché) by Dale on Monday June 26 2023, @02:21PM (1 child)
On one hand, it is not at all surprising that a studio buys something and thing only does things going forward on their own console. The bit about them super pinky swearing to do something is pointless and irrelevant. They are going to do what happens every time a large company buys up another company. How many awesome studios have we seen die via acquisitions over the years? I still miss Sierra, Bullfrog, Westwood, not to mention the slightly more modern ones. The biggest thing that has surprised me is how little an impact it has had overall on the market. Sure, individual franchises die because of it and we miss out on what could have been. Command and Conquer went to shit after EA took them over.
The real talent that drives the industry forward though splits off and form new companies and we keep on going. I know that isn't a popular opinion, but we will survive if this merger goes through just fine. It is still bad for everyone overall and I hope it doesn't happen, but it isn't going to destroy the foundations of the industry.
(Score: 2) by boltronics on Tuesday June 27 2023, @02:02PM
Except these days, games take many years and many millions of dollars to compete at the level of COD. Splitting off and competing is no longer so easy.
In the old C&C days we had Dark Reign, Total Annihilation, StarCraft and a ton of others. These days nobody's making them. EA did test the waters a couple of years back with some simple remasters which were great IMO, but even then, probably not enough return on investment. Too hard to do microtransactions for the genre. Grey Goo wasn't a big seller either AFAIK.
Hence, Westwood likely wouldn't have survived anyway. Sierra is a similar story. Look at Telltale, the modern equivalent in many ways. Attempts at bringing Descent back have also all met little success, despite being a mega success back in the day.
And yet, Need For Speed is still selling well all this time. I had the first game on MS DOS back in the day, and beat Unbound on my Xbox just recently, despite being owned by EA. It doesn't hurt that EA bought up other racing game developers like Codemasters, but makes you wonder how much blame can really be attributed to being bought Vs gaming trends.
Another example: Final Fantasy 16. What was a turn based JRPG is now just a fast-paced real-time action game, because Square Enix felt they had to adapt to modern trends to keep the franchise alive.
COD is one of those special franchises like NFS that has proven itself be able to stand the test of time without changing the core gameplay into something unrecognisable.
It's GNU/Linux dammit!
(Score: 2) by boltronics on Tuesday June 27 2023, @09:26AM
Sony had already purchased exclusive rights to Deathloop and Ghostwire: Tokyo. Microsoft then heard that Sony was also in talks to make Starfield exclusive.
From Microsoft's perspective, since they have a smaller piece of the gaming landscape, they would have had to pay more for an exclusivity agreement than Sony since sales would have been less (and that's assuming that MS would be fine with it skipping GamePass). In some cases, it sounds like it got to a point where the potential profit from sales of a game would make the higher price impossible to justify, yet they couldn't let Sony continue with buying up exclusivity agreements and falling further behind, so MS decided to just purchase the entire studio instead. It also works into their plans for selling GamePass subscriptions and being able to drop AAA games on a regular schedule, but there wouldn't have been so much incentive without Sony's actions.
That is why Microsoft is saying that Starfield is not a fair comparison. If they had not purchased the studio, Starfield would have been a Sony exclusive. Microsoft were backed into a corner that time. Hence, Minecraft isn't a perfect analogy, but it's a much closer one.
My gut feeling is that the deal with go through, since to not allow it would primarily be to protect the market leader, which is Sony (since in the FTC's view Nintendo doesn't count, although of course this is just silly).
Personally, I've never liked Microsoft much. Honestly, I used to absolutely hate the company back when Ballmer and Gates were around. I also hated what they did to Nokia. You can see from the finished games list on my site that I avoid using Windows for gaming where reasonably possible, instead opting to play under GNU/Linux. However, with the crazy price of computer hardware until very recently, I have been gaming more and more on console. From a strictly console gaming perspective, Sony does seem the more anti-consumer company at this time. That could not be said when the previous gen launched (less than 10 years ago), where Microsoft was still being as anti-consumer as they could get. I also wouldn't be surprised if the tables turn again in a few years if MS ever becomes top dog again like they were in the early 360 era.
It's GNU/Linux dammit!