Topline
A California judge ruled in favor of Microsoft’s $69 billion acquisition of video game giant Activision Blizzard on Tuesday, striking down an attempt by the Federal Trade Commission to block the massive merger and giving Microsoft the greenlight to close a deal designed to help it compete with Nintendo and Sony.
Microsoft’s Activision Blizzard purchase can proceed, a judge ruled on Tuesday.
Key Facts
Federal Judge Jacqueline Scott Corley denied the FTC’s request for a preliminary injunction blocking the merger after five days of testimony, after the FTC sued Microsoft in December and argued the acquisition would stifle competition.
Microsoft’s purchase of Activision Blizzard, the maker of gaming franchises Call Of Duty, Overwatch and World of Warcraft, would be one of the biggest in tech history.
In her ruling, Corley wrote that Microsoft’s commitment to keeping Call of Duty on Sony’s PlayStation console for the next 10 years and introducing the series to the Nintendo Switch, in addition to its own Xbox consoles, should assuage anti-competition fears.
In a statement, Activision Blizzard CEO Bobby Kotick said the merger would “enable competition rather than allow entrenched market leaders to continue to dominate our rapidly growing industry.”
Activision Blizzard’s stock surged nearly 12% on the day to a two-year high of $92.20.
News Peg
Microsoft also reached an agreement Tuesday with regulators in the U.K. to pause a separate legal battle over its merger. The U.K. Competition and Markets Authority had blocked the purchase in April over competition concerns—Microsoft appealed that decision in May, while Activision was given permission last month to become an intervening party in the appeal.
Tangent
Microsoft’s acquisition received the green light from the European Commission, a regulatory body representing the 27-member European Union, in May, after Microsoft agreed to allow Activision Blizzard games to be played on other cloud services in addition to its Xbox.
Key Background
Microsoft unveiled plans to purchase Activision Blizzard in cash last January at a price of $95 per share, a move that would make it one of the biggest video game companies in the world, alongside Sony, Nintendo and Riot Games owner Tencent. The announcement raised eyebrows in the gaming industry, including from Sony, which warned the merger would prevent PlayStation gamers from playing Activision Blizzard games—Microsoft later offered a 10-year deal to keep Call of Duty releases available on PlayStation. Microsoft President Brad Smith called the merger “good for gamers” in a Wall Street Journal op-ed in December, saying Xbox is stuck in third place behind PlayStation and the Nintendo Switch, and calling the FTC’s lawsuit a “huge mistake” that would “hurt competition, consumers and thousands of game developers.”
Further Reading
Federal Trade Commission Sues Microsoft To Block $69 Billion Activision Purchase (Forbes)
Microsoft’s $69 Billion Acquisition Of Activision Gets Greenlight From EU—Even After U.K. Objection (Forbes)
