World News | Microsoft and U.S. regulators go to court over $69 billion deal that could reshape video games

SAN FRANCISCO, June 22 (AP) — Microsoft Corp. will try to win permission to complete its $69 billion takeover of video game maker Activision Blizzard in a legal battle with U.S. regulators on Thursday that will reshape the industry. A pastime bigger than the movie and music industries combined.

The battle will pit Microsoft’s ambitions to extend its video game imprint beyond the Xbox console against efforts by the U.S. Federal Trade Commission to block a deal that Microsoft argues would stifle competition and innovation to the detriment of consumers. .

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It’s the latest twist on a deal announced 17 months ago. Microsoft CEO Satya Nadella and Activision Blizzard CEO Bobby Kotick are expected to appear before U.S. District Judge Jacqueline Scott Kotick in San Francisco Jacqueline Scott Corley testified at a five-day hearing that concluded on June 29.

FTC lawyers will bring together experts and executives from Sony, maker of the industry-leading PlayStation video game console, to explain why Microsoft would gain an unfair advantage if it were allowed to combine its Xbox franchise with the Activision acquisition, which would Gave Microsoft an unfair advantage. It owns popular video games like Call of Duty, World of Warcraft and Candy Crush.

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After presenting all the evidence and arguments, Kohli will decide whether to grant the FTC’s request for a court order that will keep the deal on hold until a more detailed administrative trial is scheduled to begin Aug. 2 in Washington, D.C. The judge is not expected to issue a ruling until after the National Day holiday.

If Corley refuses to issue an injunction, Microsoft could meet the July 18 deadline to close the deal and avoid paying a $3 billion breakup fee.

The debate surrounding the deal has drawn attention to the growing importance of video games, a pursuit that has attracted an estimated 3 billion viewers worldwide who play at least sometimes on consoles, PCs or, increasingly, play games. , cell phone. The population of this market is expected to grow to 4.5 billion by 2030.

All of these gamers are willing to pay upwards of $70 to own popular titles like Call of Duty, or have ongoing subscriptions to services like Microsoft’s Xbox Game Pass, Amazon’s Luna and Nvidia’s GeForce.

Microsoft is viewing the proposed Activision deal as a way to make inroads into Sony’s PlayStation, which has a bigger market share, while offering new benefits to video gamers.

Among other things, Microsoft cited its 10-year commitment to deliver Call of Duty on the Nintendo Switch console and its willingness to strike a similar 10-year deal with PlayStation, saying video gamers will have more opportunities to play on its consoles. Play more games on . Xbox subscription service.

The FTC countered that the deal would give Microsoft too much power. Microsoft has become one of the world’s wealthiest companies since the U.S. Justice Department tried to unravel the personal computer software empire in a landmark antitrust case more than two decades ago.

The regulator also claimed that based on the way Microsoft handles games after it acquires video game maker ZeniMax Media in 2021, it cannot be trusted that Microsoft will not gradually make the most popular video games exclusive to its own Xbox console and subscription service.

The hearing will also be another test of FTC Chairman Lina Khan’s efforts to tighten oversight of big tech companies. Lina Khan has been outspoken about what she thinks U.S. regulators have been too lax in past deals that have helped companies like Amazon, Google, and others grow stronger. and Facebook.

Six months ago, the Federal Trade Commission took Facebook owner Meta Platforms to court in Silicon Valley in an attempt to block the acquisition of a virtual reality fitness company, but was rejected by the judge in the case.

The FTC may face the challenge of convincing Curley to block the Activision-Blizzard deal. The judge previously cast doubt on the need to block the takeover in March, when she dismissed a lawsuit filed by a group of gamers seeking to block it.

Like regulators now, gamers believe that Microsoft’s acquisition of Activision Blizzard will stifle competition and reduce consumer choice. They later filed an amended lawsuit, but Kohli rejected their request for an injunction blocking the deal in May.

Another major regulator, Britain’s Competition and Markets Authority, has also moved to block Microsoft’s takeover.

But European regulators representing 27 countries approved the deal last month, conditional on Microsoft making some commitments aimed at boosting competition in the cloud gaming market. Some other countries, including China, Japan, Brazil and South Korea, have also approved it.

Microsoft has hit back at the U.K. regulator’s decision, appealing its decision and vehemently disapproving of U.K. government officials. (Associated Press)

(This is an unedited and auto-generated story from a Syndicated News feed, the body of content may not have been modified or edited by LatestLY staff)