Microsoft defends Activision Blizzard acquisition bid

Microsoft has responded to US Federal Trade Commission lawsuit against its $69-billion acquisition of Activision Blizzard, which publishes Call of Duty video game franchise.

In its filing with the regulatory authority, Microsoft said that it is buying Activision to try to become more competitive in this expanding global industry.
Microsoft, said in its the filing, is buying Activision to meet the billions of gamers who choose to play on mobile devices instead of a console or PC, and to learn how to make games that appeal to and engage them. Xbox also wants to make Activision’s non-mobile games more broadly available. One way is by continuing to distribute Activision’s games everywhere they currently exist and expanding
to additional platforms like Nintendo. Another is by adding new Activision console and PC games to Xbox’s Game Pass subscription service on the day those new games are released, creating new
ways to access those games. Activision has never before put its new games immediately in subscription.


Its vision for the transaction is simple: Xbox wants to grow its presence in mobile gaming, and three quarters of Activision’s gamers and more than a third of its revenues come from mobile offerings. Xbox also believes it is good business to make Activision’s limited portfolio of popular games more accessible to consumers, by putting them on more platforms and making them more affordable. That includes making Call of Duty, one of Activision’s most popular games, more broadly available. Microsoft made this public pledge on the day the deal was announced.
Since then, Xbox has agreed to provide the game to Nintendo (which does not currently have it) and has offered to Sony.
Microsfot argued that the acquisition of a single game by the third-place console manufacturer cannot upend a highly competitive industry. That is particularly so when the manufacturer has made clear it will not withhold the game. The fact that Xbox’s dominant competitor has thus far refused to accept Xbox’s proposal does not justify blocking a transaction that will benefit consumers. Giving
consumers high-quality content in more ways and at lower prices is what the antitrust laws are supposed to promote, not prevent.

Microsoft further stated that gaming is the biggest and fastest-growing entertainment industry in the world. Not too
long ago, people primarily played video games in arcades, or purchased cartridges or discs to play on game consoles in their homes. The industry looks very different today. Gaming is now more popular than television, books, music, or movies. The industry generates hundreds of billions of dollars of revenue a year, and is projected to grow substantially in the future.
The choices available to gamers today are growing. Gamers play not just on consoles, but also on PCs, mobile devices, and even directly on some televisions. Game developers are churning
out an ever-increasing variety of games, ranging from role-play in complex fantasy worlds to sports simulations to simple puzzles. Hits come out of nowhere, providing consumers with choices
beyond the iconic and treasured games they grew up playing. “Indeed, while franchises like Activision’s Call of Duty and Electronic Arts’ FIFA have been popular for a long time, so too are
games like Minecraft, Splitgate, Player Unknown: Battlegrounds, Clash of Clans, and Among Us, which burst onto the scene and achieved great success despite being developed by smaller studios.
Gamers also pay for games in different ways. They can buy individual games—today, primarily by downloading them, rather than purchasing cartridges or discs. They can subscribe to services that offer the ability to play a variety of games for a monthly fee. And they can turn to free-to-play games, which may be funded by in-game advertising and in-game purchases (for
example, of additional levels or of additional characters).
A few companies, primarily located abroad, exercise outsize influence in this industry. Xbox is not one of them. Xbox’s console lags well behind Sony’s and Nintendo’s. While Xbox publishes games for consoles and PCs, it has far fewer popular exclusive games than Sony and Nintendo. And Xbox has almost no presence in mobile gaming, which is the largest and fastest-growing segment of gaming,” stated the software giant.

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