call of duty game from activision

A date has been set for the pre-trial hearing of one of the biggest anti-trust cases brought forward by the United States Federal Trade Commission (FTC) lately. This time, it is Microsoft’s acquisition of gaming giant Activision-Blizzard which has been the subject of scrutiny amid the implications that the transaction could have for this multi-billion industry.

A judge will be hearing the FTC’s arguments against the corporate action on 3 January – less than a month after the commission brought up the lawsuit against Microsoft (MSFT) that cited concerns about the company gaining an unfair edge against its rivals by controlling top-selling titles such as Call of Duty and Diablo.

What is the FTC Complaining About

According to the FTC’s statement concerning the lawsuit, Microsoft’s track record is also concerning as the company has already acquired several videogame developers including ZeniMax, Double Fine Productions, and Obsidian Entertainment.

After the ZeniMax acquisition, Microsoft made at least one title produced by Bethesda Softworks – a subsidiary of this business – exclusively available for its Xbox console and reportedly plans to include another two or three top-selling games in this list of Xbox-only titles.

It is the FTC’s belief that the firm could allegedly be using these transactions to dominate the video game space and force consumers to buy its Xbox gaming console to access their favorite titles. This would put companies such as Sony and Nintendo at a disadvantage.

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If the acquisition of Activision-Blizzard moves forward, the situation could get worse. In 2021, Call of Duty: Vanguard was the top-selling title in the United States in dollar sales, followed by Call of Duty: Black Ops.

Interestingly, the decision to move forward with the FTC’s lawsuit won in a 3-to-1 vote. FTC Commissioner Christine S. Wilson was the only person who voted against moving forward with this proceeding.

The company headed by Satya Nadella has argued that Sony holds the dominant position in the gaming space and that it has the power to create competing games. In addition, the firm has said that, even if they decide to make CoD an Xbox-exclusive title, that would not dramatically hurt the performance of Sony’s gaming unit as a relatively small percentage of PlayStation’s monthly active users (MAUs) play the videogame.

UK’s Competition Watchdog Questions Microsoft-Activision Deal as Well

The deal is also being investigated by the Competition and Markets Authority (CMA) of the United Kingdom. On 15 September, the CMA decided that the deal demanded an “in-depth investigation” as it could result in a “substantial lessening of competition” within one or more markets in the UK.

In late December, the agency published a summary of the opinions it received from relevant market participants concerning the Microsoft-Activision deal as part of the proceeding’s Phase 2.

Some interesting comments were made in favor and against the acquisition. Those who believed that the acquisition would have a positive impact on the market mentioned that the odds that Microsoft would make CoD and other titles exclusive to Xbox were low as that could result in lower revenues for the firm.

Moreover, these proponents cited that Sony has engaged in similar actions in the past by making some highly successful titles such as Silent Hill and Final Fantasy exclusively available to its PlayStation console.

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Meanwhile, those who were against Microsoft’s deal stated that the company could opt to use its vast resources to compete directly against Activision-Blizzard instead of acquiring the firm.

In addition, they commented that Microsoft could deteriorate the quality of the PlayStation version of Call of Duty and other titles owned by Activision-Blizzard to lure consumers to switch to its Xbox gaming console.

The CMA may opt to recommend some possible remedies to the allegations brought up by these relevant market participants in January 2023 and will issue a definite report about the acquisition before the end of February this year.

Microsoft’s expectation is to settle the Activision-Blizzard takeover in all relevant jurisdictions before the end of the first semester of 2023.

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