Can the FTC block Microsoft's ABK acquisition?

GamesIndustry.biz spoke to two legal experts, with Gamma Law managing partner David B. Hoppe observing that this complaint is in line with the FTC's "strategy of expanded antitrust enforcement."

[Sonyslave3]

Lol if former FTC members whom are saying the current head is stupid and is going to lose in court badly because Khan objected is base off ideals and not facts.

[shinoff2183]

You got a link to the former Facebook members saying this? Don't forget they still got euro to worry about to.

[Orchard]

I'm assuming you meant the FTC and not Facebook :P

The former 'principal deputy assistant attorney general' of the DOJ, a guy who was behind the successful 1990's anti-trust case against MS was one of the ones who spoke out against bringing cases with little to no evidence:

https://straightarrownews.c...

Basically, she's hoping to lose cases in court so that congress will pass new legislation. Maybe that'll work longer term, I don't know, it could also just make her look bad at her job. Even the FTC staff reportedly didn't want to bring some of the cases that Khan has overridden them on and forced them to bring.

Either way, any legislation passed won't affect the Activision purchase since our government is crazy slow.

[shinoff2183]

I meant ftc I don't know why Facebook got put there lol

[Orchard]

I think the odds of MS abandoning this are near zero, if not zero. They seem all in on it, and rightfully so - the cost of going through court etc is non-zero, but its small for MS, and small compared to the gains they would make by having ABK under their belt.

Plus, the cost of going to court is likely less than paying Activision 3bn to cancel the deal.

Part of me thinks this will be settled before going to court via an agreement between the FTC & MS. I think MS believes they would win in court - but MS won't want to drag this out into 2024 (which is where it's going if it goes to the Fed court, and potentially the Supreme Court), similarly the FTC knows their case is weak/would lose - so realistically, neither side wants this to really go to court.

[shinoff2183]

Things don't get taken to courts by government employees most of the time if they think they will lose. Ms shouldn't be able to strong arm the industry like this.

Ms currently has more studios then sony. More money then sony. Why do they need to buy Activision(a publishers who sold more games on sonys system by the way)?

Ms has enough resources right now without acti but they can't get their sh together. Some of yall might not remember but there was a joke years ago Ms is where studios go to die. Alot have under Ms.

[Orchard]

"Things don't get taken to courts by government employees most of the time if they think they will lose."

That just isn't true though. The US govt and it's agencies lose cases against companies and individuals all the time. Especially the FTC, the FTC has a terrible track record in court, they've even lost to MS in the past.

The problem for the FTC is, most of their 'wins' occur when the company abandons the acquisition, and MS doesn't seem set to do that. In the recent times of the Biden / Khan administration, they are 4 for 4 on court losses - because courts follow the law as written, not anti-merger activism.

What we think about MS's ability to manage studios, or how many studios they currently have is irrelevant really though. Activision wanted to sell-up, MS met the asking price and we are where we are now / this is happening.

[ActualEngineer]

Cry more kid.

[wiz7191]

@Shin Studios died under Sony as well , just because they make good single players games doesn’t mean they are exempt to BS .. I also understand if your to young to have been gaining since the 90’s ..

[dcbronco]

Studios died at Microsoft because they didn't have a cohesive goal with gaming. You had people all over the place on direction. Now they have a ceo completely committed to gaming and that understands the tech developed for gaming has other applications.

[Godmars290]

@wiz7191:
So Sony closing one studio while releasing several well regarded titles from other studios is the exact same as MS closing several studios with not one game, or badly regarded one, to show for it?

Really?

@dcbronco:
MS does have a goals or ideas for the types of games they want. Thing is said goals are narrow minded. Leans towards online multiplayer/always online/subscription with negative impact on creativity.

[wiz7191]

@godmars LMAO you want to know what ironic , Sony closed just as many studios Microsoft has .. Stuios change names or get absorbed into larger studios.

[Sonyslave3]

Not only that but Activison is ready to fight to the end of earth for this deal.

[shinoff2183]

Of course acti is cause the dude leading it is getting paiiiiiidddddd. And is a huge liability. Still shouldn't be able to buy one of the largest publishers out there if not the largest.

[SeTTriP]

@wiz7191 your telling half truths Sony closed studios after they were giving chance to make a come back but failed like zipperhead.

Sony is a business after all and not a charity.

Ms just buys studios to let them die.rare was the naughty dog of the 90 and what did Ms do with them?

[TheColbertinator]

Deal going through in 3...2...1...

[SullysCigar]

Lol do try to keep up. It's not even scheduled to go conclude for months and that was without the FTC wading in, which will delay the outcome further.

[Flakegriffin]

If I’m not mistaken it’s scheduled to conclude in August 2023, without FTC wading in.

[Crows90]

Still waiting....oh that's Ms tagline

[Flawlessmic]

I know xbox only fans want this deal to go through, I mean he'll I'm not adverse to it if it means all blizzard and Activision games go on gp, saves me a ton of money.

But consider that if it does go through, sony will more than likely end up buying square and capcom and makes all there ips exclusive.

Outside of console warring and being able to say xbox is the biggest brand now and brings the most revenue or whatever.

Is it worth losing all of squares capcoms ips just to gain cod and diablo and bragging rights?

No skin of my back however this all pans put I have all 3 consoles, just don't think xbox guys are thinking this through.

You will likely end up losing a lot more great games than ur actually gaining.

[Redemption-64]

Microsoft needs Xbox + Bethesda + Activision to match Sony, and the sad thing is, Sony seems to be able to actually do more with less studios. In the event that Sony's goes after Square/Capcom, it will be extremely difficult for MS to catch up to Sony, unless they decide to buy another publisher, but at that point regulators will more than likely kill the deal

[Flawlessmic]

Well that's my point precisely, if this deals goes through you can basically book Sony buying square, and I'd say capcom will follow certainly to match what Ms has done.

Which if that happens Microsoft's ends up right where it was before the merger, sure it's gained a ton in revenue but in terms of great games there not gaining a lot, but what they will lose is massive.

Final fantasy although this one is already the case mostly
Dragon quest
Kingdom hearts
Devil may cry
Resident evil
Steet fighter
Monster hunter
Dragons dogma

I'm sure there's a lot I'm missing that's just off the top of my head.

Where as the big gains for acti would be diablo and cod.

Wow is not so much a benefit for us console gamers, I grew up on crash bandicoot but it's not a needle mover, neither is Spyro and I love both those series

If I only owned an xbox I would not want acti at the risk of losing those games.

[HardKnockKid24]

Then that would make Sony……. Hypocrites?

[NotoriousWhiz]

I mean with all that money, why can't they just give Activision a few billion instead of 70 and have a good chunk of their games on game pass anyway?

[NotoriousWhiz]

^ It wouldn't make Sony hypocrites. They'd be fighting fire with fire.

[Redemption-64]

@Orchard

Seriously, your level of ignorance and inability to understand basic reading comprehension is amazing. Seriously what has Sony said that has disapproved the facts I provided from Activision's 2021 financial reports? Exactly 0. Sony not liking this deal doesn't in any way shape or form negate how much Activision makes from Playstation

Also, my math is off, I just shows you are not very good at accepting reality. The numbers I gave you, about how much Activision makes us literally from their own 2021 annual reports, so since you clearly know more than them, why not call them and tell them their math is off?

Sony's PlayStation platform made nearly $7.6 billion from microtransactions, expansions, DLC, and in-game content in FY21. This is literally for every thing. COD, Fortnite and Apex being the highest contributors doesn't change the fact that, Activision made $1.3B the same year from Playstation. Last year Playstation made around $24B, care to guess how much of that came from Activision? Am sure you will love the answer.

Also, can I Seriously recommend you take some basic reading comprehension classes? Never said Capcom and or Square are close to COD. Please learn to read. I said their impact, if they were to ever be acquired by Sony, would have a bigger impact than COD, especially if MS decided to make COD exclusive. Anyone with a single brain cell in this community knows Xbox as a platform has been struggling for well over a decade to get more Japanese games and are seriously lacking behind. Capcom, Square, Bandai Namco and Sega, are some of the few Japanese companies that release some of their games on Xbox, now imagine losing two of those. Imagine struggling in a market and then end up losing major publishers from said market?

[Orchard]

Would they really be losing much though?

Square are basically Sony exclusive at this point anyway.

Capcom only has a handful of games that release very sporadically, and some not even on Xbox (and they would still come to PC anyway).

And realistically, from a business perspective, COD is bigger than every Square and Capcom game combined.

You’re also assuming that Square and Capcom want to be bought.

[Flawlessmic]

Like I literally said in my first post forget revenue and profits I made that clear buying acti will literally take Ms from last to first.

I more than understand the business side of it.

I'm talking from a gamers perspective particularly the people on this website as I would consider us hard-core gamers if your here.

For casuals yes cod is great, but for proper gamers like us are you telling me you would prefer to have cod, diablo and warcraft over the titles I mentioned?

Most hardcore gamers who don't care about cod would certainly see my point and would prefer the games I listed.

And yes I already acknowledged ff was basically already exclusive at this point.

Square 100% will want to be bought out, capcom maybe not as much but if aony comes knocking why refuse, its a japanese company that they uave long history with, it would basically be business as usual.

[Orchard]

That’s a hard call to make but I do think I would go with COD.

I play cod for tons of hours every year, and it’s mostly good releases (with a few misfires like Vanguard).

Square and Capcom on the other hand have very sporadic releases and can be very hit and miss.

But if Sony were to make Square/Capcom games exclusive, MS could go nuclear and make COD exclusive which would financially devastate PS and ultimately affect all aspects of PS including the quality of exclusives and therefore affect gamers. So the business side does matter.

Tbh though, the way forward seems to be PC. PC gamers are finally winning and getting basically everything while Sony and MS fight to take games away from each others consoles.

[Flawlessmic]

Ur gaming tastes isnt that great then orchard, not sure if you mean that or if that's your constant pro xbox coming out that you will just go with whatever Ms is doing and say that the best and you agree, I'm sure it's the latter.

As a side note I play plenty of cod with my friends but if I had to choose a standard fps over all those brilliant games I listed then it's an easy choice for me.

Ms won't make cod exclusive not immediately anyway even if Sony does buy capcom and square make all there ips exclusive.

Majority of cod players are on playstation, that's just bad business, where Sony and Ms will come to an agreement is Sony will give Ms bungies new shooter while cod remains on ps.

In the end xbox gamers lose out massively, one generic shooter that releases yearly and is the same game compared to 10 + highly valued and critical games.

Sony will be fine without cod money, obviously they'd prefer to to lose 100s of millions in easy cash but it's exactly that just a few 100 million, nothing Sony can't handle, once bumgies release there new game they will be making more from that or even destiny 2 at this point.

Main point is for the hardcore xbox gamer, I don't think this will end well and I don't think half of you see the repercussions that will come with it.

Agreed pc will be the big winner in all of this in a few years.

[Orchard]

I mainly game on PS5 so 🤷

I normally do get COD on PC though for mouse and kb - although this year I ended up with it on PS too (long story).

What got me to that decision was simple - I play COD every year, for a lot of hours. The other games you listed are few and far between so realistically if I had to pick I’d go with the ones that give me the most hours of entertainment.

It would be more likely billions than hundreds of millions though - PS makes about 8bn in MTX per year and a lot of that comes from Fortnite and Warzone.

That’s also excluding the actual sales of the game itself.

You could indeed see MS and Sony reach a deal, but that deal would need to be more than COD for Destiny/a Bungie game lol. Those aren’t even remotely equal in value.

“ once bumgies release there new game they will be making more from that or even destiny 2 at this point. ”

Sorry, but that just isn’t realistic. Destiny doesn’t make anywhere close to the annual revenue of COD.

Bungies annual revenue (including games, MTX and merchandise etc) is around 200m. COD MW2 made 800m in the first 3 days - in sales alone, excluding MTX and season passes etc.

Even in an off year where Vanguard sucked, it still made 3bn dollars.

[Flawlessmic]

As do I, ps5 is my primary ,not sure I believe that from you though lol. like I said it's no skin of my back how it all shakes out, I have all 3 consoles and will always likely be a multi console owner.

I'm looking at this strictly from an xbox only player perspective especially as they are the ones that are desperate for it to go through.

I'm just trying to point out as gamers they will likely lose more than they gain without realising that now.

U are treating cod like a 1st party Sony game and sony gets all the profits, that's not the case at all.

Hence a new bungie title where all the proceeds would go to to Sony would make them more money than the $ they get from cod as I understand destiny has raked in billions each yr.

So really they have the devs to compensate for the loss, I'm talking about Sony's side of the revenue not cod total value as obviously cod is bigger but Sony don't get all that cash they get a % of there cut and that's it.

To boil it down from a xbox only perspective would you really want acti at the risk of losing the others? Pretend u don't have a ps5 or pc and ur at risk of losing those game.

[Redemption-64]

I really don't think you understand the impact of Capcom and Square being bought by PS, if that was to ever happen. The impact will be far worse than CoD leaving PS. For 1 Activision makes far more on Playstation, say if MS ever decides to make it exclusive, the will lead to a major decline for COD, not just in popularity, but in sales as well. It will literally lead to less sales for COD. Capcom is one of the few major Japanese devs, that actually releases their top games on Xbox. MS has been struggling to get more Japanese devs to work and releas their games on Xbox, imagine losing two major Japanese devs. Sony would have a near major lock down of Japanese games

[Redemption-64]

@Orchard

Also, you seriously need to get your facts right:
The totals for 2021's revenues from customers, for example, were as follows:

Apple - $1.496 bn
Google - $1.496 bn
Sony - $1.320 bn
Microsoft - <$880 m
Total - $5,192 from top customers (does not include Nintendo, or retailers like Best Buy, Walmart, etc)
So we know that Activision made $1.320 billion from Sony in 2021. That's after the revenue split that Sony takes.

A bit of math reveals how much Sony kept. While it's likely Sony gives Activision-Blizzard a negotiated cut of revenues, let's just say that Sony applies the standard 70-30 split, with Sony keeping 30% of revenues.

That $1.3B Activision makes from Playstation is the combination of all Activision games on Playstation. COD is big for Activision, bit based on their financial reports, Sony doesn't even make that much from them compared to their revenue. They would rather not lose, even if it would not affect them.

Read more: https://www.tweaktown.com/n...

[Orchard]

@redemption Its laughable to say capcom or square are even close to COD or Activision. They are minnows by comparison.

How many people are willing to buy a $500 console for Capcom or Square games? Not many. COD on the other hand is a purchasing decision driver.

Also your revenue numbers are miles off, e.g. https://www.tweaktown.com/n...

And Sony disagrees with you - that’s why they’re fighting like hell to stop this acquisition and have made many official statements that directly contradict what you claim.

They also did nothing to stop the Zenimax acquisition and would likely do nothing to stop a Capcom/Square acquisition.

[SoulWarrior]

'I mainly game on PS5 so'

You honestly expect anyone to believe that with your cheerleading over this deal wanting to go through asap? Lmao.

Major X to doubt.

[darkrider]

Would they be losing much.. Square and Capcom... From the all the top news, yeah.

Both square and Capcom have a deep relationship with sony. It's their biggest buyer, so yeah. Being first party, making games for one console... Yeah.

Some here are just waiting the deal of activision get green light to start jumping around, when in reality Phil Spencer is about to put another huge nail on the coffin of Microsoft gaming division.

Buying publishers should never be allowed for the sake of competition. But Microsoft open that door...

[thesoftware730]

@Flaw

Are you being serious? you realized only as a Hardcore gamer would anyone even consider choosing SE and Capcom over A/B. That is the problem with your thinking, you guys live in this HC gaming landscape and ignore the vast majority of gaming and often preach your smaller personal feelings as fact.

How could you be flabbergasted that someone may choose A/B over SE and Capcom? Diablo, Overwatch, CoD, Crash Bandicoot, Guitar Heros, Tony Hawk, and World of Warcraft. Most of these games have mass appeal to hardcore and casual players alike. The S/E and Capcom games would mostly fall under a huge hardcore crowd.

[glennhkboy]

Regardless of whether MS can successfully buying ABK or not, Square & Capcom is already prioritize Sony over everyone else (MS & Nintendo). All the latest Square & Capcom games are all Sony (time) exclusive for now. So the real question should be: can Sony live without CoD, Diablo, Overwatch, etc. if it does not soften its stand now?

[tay8701]

@orchard, I'm not for these huge aquisitions, bit id certainly trade square and capcom for Activision in a heartbeat. That's just me, I know there are millions of cod players, but I can't stand the game personally. Losing cod would be a huge hit, bit it wouldn't be devastating. They own bungie and haven and they have partnerships with other studios making shooters like firewallk and deviation games. Not to mention there are several other Sony studios working on multi-player games like guerilla, firesprite, London studios, and naughty dog. None of which will do numbers like cod, but will help fill the void. Sony has quite a few kick ass multi-player ips they could and should revive like resistance, killzone, Socom, twisted metal( in the works now), Warhawk, and MAG.

[Elda]

I agree. COD didn't make PS for what it is... nor will it break PS. PS is where it is based on its first-party games along with its historic library of games first & foremost. Nintendo is successful without COD & the same will be for PS. No shade...I think Sony just wants that COD money to keep flowing their way but without COD... as long as Sony's studios keep making great games & consoles...Sony will be fine.

[Asplundh]

Activision Blizzard is worth $59 billion
Capcom is worth $6.5 billion
Square Enix is worth $5.5 billion

In what world would Sony come out a head in that trade off situation? Even from a gamers perspective, way more gamers are interested in Activision Blizzard games.

[thesoftware730]

Exactly this.

The problem with some hardcore gamers is that they live in a bubble, like N4G or other gaming sites. They often fail to realize that the larger portion of gamers doesn't care about a game dropping 2fps on one console over the other.

It's only talking to a hardcore crowd would they tell you that having SE or Capcom would be better than having Activison/Blizzard.

[1Victor]

@asplun same as activision square and capcom are legacy developers of old with more successful franchises than activision with their yearly milking of C🤢D 🤷🏿

[Asplundh]

@1Victor
"with more successful franchises than activision"

You can make all the false claims that you want, the sales numbers don't lie.

[ken2813]

We still talking about this???

[FallenAngel1984]

Cuz it’s not like this is the largest acquisition in the industry 😅

[ActualEngineer]

This acquisition will shape the industry for years to come because with the money Microsoft is spending, you could buy almost every other major console publisher TOGETHER. I mean EA, Ubisoft, Embresser, Square Enix and Take Two together....

[Hofstaderman]

Either way it’s a loss for Microsoft. The acquisition goes through but they do jack with the publisher as they have done with their other acquired publishers and studios. They can’t manage jack, they just dilute what the original developers brought to the table see Halo and Gears of War. They also obviously lose if the acquisition doesn’t go through.
If this acquisition together with GamePass fails to put XBOX in the lead then it should be evident that they will never take the crown in this industry. Either way whether it goes through or not unless MS is willing to change the way they do business they are destined to be last. Had this been any other company (like Sega) they would have been out of the game long ago. Then again their shareholders may not accept heir shenanigans for much longer.
In any case I have a feeling I will be saying “I told you so” in the near future.

[thecodingart]

Yes - saved everyone a read

[AngainorG7X]

No

[hotnickles]

I hope it fails. 90% chance it goes through based on the merits. You never know with judicial activism/kickbacks though. I never thought the FTC would sue but their incompetence matches the rest of government so it’s not really surprising.

[UltimateOwnage]

Hope so. F Microsoft and their lack of ability to cultivate talent. All this is about is day one releases on game pass to lock the gaming community into GaaS. I hope it backfires and they lose significant amounts of money on the process.

[derek]

Man if this deal is ultimately blocked the collective cry from the xbox community and their corrupt journalists/youtubers will be glorious. Lol. Can't wait.

[343_Guilty_Spark]

What is their case? It''s going to create a monopoly? Based on what?

That MSFT will make games Exclusive to Xbox? Based on what?

That it will limit competition? Based on what?

On what grounds is the deal bad for consumers?

FTC still thinks Nintendo only has Family games on the Nintendo consoles.

[Darkhorizon]

If Microsoft throws them some corruption money it will be all good!