The FTC-Sony Case Against The Microsoft Activision Deal Is Very Bad

The FTC-Sony Case Against The Microsoft Activision Deal Is Very Bad

SAN FRANCISCO, CALIFORNIA – JUNE 23: XBOX CEO Phil Spencer arrives at federal court on June 23, 2023 … [+] in San Francisco, California. Top executives from Microsoft and Activision/Blizzard will be testifying during a five day hearing against the FTC to determine the fate of a $68.7B merger of the two companies. (Photo by Justin Sullivan/Getty Images)

Getty Images

While I’ve said before I am not the biggest fan of the Microsoft Activision Blizzard acquisition, that’s because I’m skeptical of overall industry consolidation at that scale. I can’t really say I can make a legal argument there, I just don’t love the idea of a $70 billion takeover of a publisher when the last one (Bethesda for $7 billion) already felt like a bit much at a tenth of the size.

But if Sony and the Federal Trade Commission are doing everything they can to block this deal, they are doing a very, very bad job of it, as evidenced by this week’s hearings.

What exactly happened this week? Where to start.

  • An email was revealed from PlayStation head Jim Ryan saying that he did not actually believe Microsoft would remove Call of Duty from the system, and that they would be “more than okay” if the deal went through, contrary to their public statements.
  • The FTC has been hyper focused on the concept of Microsoft exclusives through deals like this, both in terms of the games themselves and also content within those games. Essentially no attention has been paid to Sony’s grand list of exclusives they are, of course, not offering to Microsoft.
  • One of the most tone deaf moments was when the FTC started asking Microsoft about if it meant that acquisition could produce exclusive costumes or items for Xbox and not PlayStation. This is quite literally exactly the kind exclusive content that was produced for PlayStation as a result of past deals from Activision.

Call of Duty

Activision

  • The FTC tried to “gotcha” Phil Spencer by making him swear under oath he would keep Call of Duty on PlayStation and future PlayStations. He then… swore that under oath. They then tried to make him swear the same about other games, and the judge was so annoyed by them attempting to do that she cut them off.
  • The FTC has shown a poor baseline understanding of the industry they’re trying to regulate here by killing this deal. At one point, the FTC asked Sarah Bond if you needed a Windows key to stream video games (uh, you do not), in addition to not knowing how existing exclusivity arrangements are made and how many Sony itself has done over the years, and continues to do.
  • The FTC called someone from Google Stadia to the stand to testify about cloud gaming, the reason the deal was blocked in the U.K. All the Stadia inclusion really proves is that it’s a tiny market with no real audience that’s deeply hard to find footing in. It almost felt like a witness for Microsoft’s side, as they’re trying to show that cloud gaming is a nascent, difficult market and a fraction of this overall deal.

Sure, some blows have landed on Microsoft. There’s an email from Matt Booty about how he didn’t want Xbox games on Nvidia a few years ago. The reveal that Microsoft bought all of Bethesda in part because they were worried Starfield might go PlayStation exclusive is not exactly dissuading anticompetitive concerns.

But overall, what has been on display this week is now documented hypocrisy from Sony and utter cluelessness from the FTC. Even if on its face it’s easy to say “this deal is probably just too big,” no one is doing a good job of making a coherent, legal argument for that in court. I would be genuinely stunned if this did not go Microsoft’s way at this point.

Follow me on Twitter, YouTube, Facebook and Instagram. Subscribe to my free weekly content round-up newsletter, God Rolls.

Pick up my sci-fi novels the Herokiller series and The Earthborn Trilogy.

Read More

Zaļā Josta - Reklāma