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A hot potato: Microsoft's president and vice-chair Brad Smith says that the FTC suing the company to block its $69 billion acquisition of Activision Blizzard would hurt competition, consumers, and thousands of game developers. He also compared Sony's objections to the deal to Blockbuster complaining about the rise of Netflix.
In a Wall Street Journal guest post, Smith wrote that Microsoft faces huge challenges in the gaming industry. He noted that when it comes to console gaming, the Xbox sits behind the PlayStation and Nintendo Switch, and that Microsoft has no presence in the mobile game industry, which generated 50% of the overall global gaming revenue, or $92.2 billion, in 2022.
Smith noted that a significant portion of mobile gaming revenue goes to Google and Apple through app-store fees. Acquiring Activision would allow Microsoft, which has a market cap of $1.87 trillion, to compete against these companies through "innovation," apparently.
Much of Smith's argument for the acquisition involves adding more titles to the Xbox and PC Game Pass service, including World of Warcraft and Call of Duty. CoD has been a particularly contentious issue ever since news of the acquisition arrived back in January.
"Sony has emerged as the loudest objector. It's as excited about this deal as Blockbuster was about the rise of Netflix. The main supposed potential anti-competitive risk Sony raises is that Microsoft would stop making Call of Duty available on the PlayStation. But that would be economically irrational," Smith wrote.
The Microsoft exec reiterated that a vital part of CoD revenue comes from the PlayStation and that cross-play between consoles is very popular. He also confirmed the previously reported 10-year deal to keep the series on PlayStation that Microsoft offered Sony, adding that the Redmond firm is willing to offer the same deal to other platforms (including Nintendo consoles) and make the agreement legally enforceable in the US, EU, and UK. Furthermore, Microsoft has made repeated assurances that Call of Duty would stay on PlayStation "as long as there's a PlayStation out there."
"Think about how much better it is to stream a movie from your couch than drive to Blockbuster. We want to bring the same sort of innovation to the videogame industry," Smith concluded.
This week brought news that the Federal Trade Commission (FTC) is split on whether to launch an antitrust lawsuit against Microsoft to stop it from buying Activision. Rather than face a split vote, the FTC might approve the deal. Some countries, including Brazil and Saudi Arabia, have already given the acquisition the green light, but it still needs the go-ahead from the UK and EU.