The U.S. antitrust agency Federal Trade Commission (FTC) has filed a lawsuit “obstructing market competition” for Microsoft’s plan to spend a huge amount of money to buy the game giant Activision Blizzard, as strong evidence of the plaintiff, a senior executive of Japanese game console manufacturer Sony recently A senior executive at Japanese console maker Sony has said that Microsoft’s acquisition plan would hit Sony’s console business hard and hurt the PS console gamer experience.
On Tuesday, the FTC’s lawsuit against Microsoft continued in a federal district court in San Francisco, California, where the court will decide whether to press the “pause button” on the acquisition plan. On the same day, Sony Interactive Entertainment’s head James Ryan testified by video that Microsoft’s deal to buy Activision Blizzard was a bad thing for competition in the gaming market.
Earlier, the FTC had launched an antitrust lawsuit against U.S. social media giant Meta, hoping to prevent the company from acquiring a virtual reality software maker, but the lawsuit was badly defeated. The FTC’s next lawsuit against Microsoft will be crucial in proving whether the regulator is capable of stopping M&A deals by tech giants that could affect competition in the market.
Ryan said he judged that Microsoft could later use Activision Blizzard’s popular game “Call of Duty” to undermine the company as a competitor, for example, Microsoft could target PS consoles and partially or even completely cancel the license of this game.
Ryan said Microsoft could potentially harm the PS console user experience for Call of Duty, putting Sony users at a disadvantage and even encouraging them to defect to Microsoft’s Xbox gaming service, such as purchasing Microsoft’s own game content membership, “Game Pass”.
The FTC also alleges that Sony’s PS console is currently in a dominant position and that Microsoft may refuse to provide Activision Blizzard’s games to PS. s games.
In response to Ryan’s testimony, a Microsoft spokesperson said in a statement that Microsoft wants to take the gaming market into a new phase of the future, where gamers on different platforms can enjoy gaming content, but Sony is only thinking about consolidating its dominant position. The spokesman also said that Microsoft executives have also testified in court to prove that the merger deal benefits gamers.
Representatives of Sony’s PS business have not yet commented.
If it can win the antitrust lawsuit, Microsoft is expected to successfully take down Activision Blizzard and become the third place in the global gaming market, behind Tencent and Sony.
Ryan also mentioned that in 2020, Microsoft Corp. spent $7.5 billion to acquire game maker ZeniMax, and before the acquisition, Sony had wanted ZeniMax’s role-playing games (such as “Starry Night” and the upcoming “The Elder Scrolls 6”) to be available to PS console users as well.
The FTC reportedly submitted video testimony from Ryan that actually counters Microsoft’s evidence. Last week, Microsoft, for its part, disclosed an email to the court in which Lane said that Microsoft’s acquisition of Activision Blizzard would not result in an exclusive content monopoly and would not harm Sony’s PS business.
Last week, Phil Spencer, head of Microsoft’s Xbox gaming business, testified that the Call of Duty game would continue to be licensed to PS after the acquisition was completed, and that Microsoft had not yet made a decision on whether to license The Elder Scrolls 6 game to PS.
Spencer and a team of Microsoft lawyers also appeared in court on Tuesday, and Spencer was expressionless as video testimony from Ryan was played.
In court, the FTC also presented e-mail correspondence between two Microsoft gaming executives from three and a half years ago, namely Matt Booty, head of Xbox Games Studio, and Tim Stuart, Xbox’s chief financial officer. crowd out gaming rivals, including Sony.
In an email in late 2019, Buti mentioned that Microsoft was in a unique position to spend more money and push Sony out of the market.
Buti also wrote that if Microsoft thinks the gaming market is important in the next decade, it may look back one day and realize that losing $2 billion or $3 billion in the gaming market in 2020 was totally worth it, which could prevent Tencent, Amazon, Google and even Sony from becoming the “Disney of the gaming market” and avoiding their monopoly on the majority of quality games. This will prevent Tencent, Amazon, Google and even Sony from becoming the “Disney of the game market” and avoid them monopolizing the majority of quality games.
A Microsoft spokesman stressed that Buti wrote the above email two years and one month earlier than the announcement of Activision Blizzard’s acquisition plan.
The Microsoft spokesman said that Buti’s words in the email referred to a trend in the gaming market that Microsoft never acted on, and that these words had nothing to do with the later Activision Blizzard acquisition.
