- By Steffan Powell & Natalie Sherman
- BBC news
Microsoft’s chances of taking over major game publisher Activision Blizzard have increased dramatically after a US judge denied a request from US regulators to block the deal.
Microsoft said that after the US victory, it will focus on addressing concerns in the UK.
The merger of the tech giant with the Call of Duty owner will be the biggest deal in the history of the gaming industry.
Shares of Activision jumped more than 10% as investors bet it would succeed.
In the United States, regulators have argued that such a deal would hurt gamers and reduce competition by giving Microsoft, the maker of Xbox, the right to deny competitors access. into Activision games.
The Federal Trade Commission (FTC) has sought to urgently block the deal, which is expected to close later this month, while the agency challenges the plans.
But Judge Jacqueline Scott Corley said she did not think the regulator would win in this case.
“The FTC failed to show they were capable of success in asserting that the combined company would likely pull Call of Duty from the Sony PlayStation or that its ownership of Activision content would significantly reduce competition in subscriptions.” video game library and cloud game marketplace.” Judge Scott Corley wrote in his decision, which came after a weeklong hearing in San Francisco.
The US ruling is the strongest indicator to date that the tech giant’s purchase is finally underway.
It comes after the deal was approved by the European Union, while an attempt to block the merger in the UK is currently being appealed.
Microsoft President Brad Smith said the company was “very grateful” for the quick decision and will now shift its focus to the UK.
He and the UK’s Competition and Markets Authority said the two sides had agreed to put the litigation on hold while the company worked out how to address the concerns.
“We stand ready to consider any proposal from Microsoft to restructure the transaction in a way that would address the concerns outlined in our final report,” a CMA spokesperson said.
The development seems poised to deliver a big win for Microsoft, which is trying to keep up with market leaders PlayStation and Nintendo by investing heavily in game content that can encourage players to choose platforms their platforms, including Xbox consoles, rather than competitors.
Activision Blizzard is responsible for major titles including Call of Duty, World of Warcraft, Diablo, and Overwatch, and owns King, the mobile game developer responsible for Candy Crush.
The fate of the Call of Duty franchise is key to the regulators’ arguments.
Arguing on the part of regulators, PlayStation boss Jim Ryan said in a video that Microsoft will likely restrict access to the series for PlayStation users or offer them a downgraded version. grant.
However, Microsoft said it offered a 10-year license agreement to Sony for the game and argued that it would make no financial sense to restrict access to such a huge following.
“Our merger will benefit consumers and workers alike. It will facilitate competition rather than allow entrenched market leaders to continue to dominate a burgeoning industry. our rapid development,” Bobby Kotick, chief executive officer of Activision Blizzard, said after the ruling.
The decision in the US is not necessarily the end of the process. The FTC can appeal the ruling. It has also separately challenged the merger in a parallel process taking place in administrative court.
FTC spokesman Douglas Farrar said: “We are disappointed with this outcome given the obvious threat this merger poses to open competition in cloud gaming, subscription services, and subscription services. and control panel”. “In the coming days, we will announce our next step to continue the fight to stay competitive and protect consumers.”