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Microsoft CEO Satya Nadella believes Microsoft’s acquisition of Activision Blizzard will not be blocked by the US Federal Trade Commission, even as the FTC and the US Department of Justice look to ramp up antitrust efforts, especially among technology companies.
Speaking with the Financial Times, Nadella remarked on how even if the deal goes through, Microsoft would still only be the third largest company in the industry behind Sony and Tencent. He cited “fragmentation” of the gaming market as a key factor as to why he thinks the Activision Blizzard acquisition will clear regulatory hurdles.
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“Even post-this acquisition, we will be number three with sort of low teens [market] share, where even the highest player is also [in the] teens [for market] share,” Nadella said. “It shows how fragmented content creation platforms are.”
Nadella goes on to state that another factor that will need to be considered is how Microsoft isn’t even the biggest player on its own Windows operating system.
“Also, the analysis will have to extend to say: Why are these content companies trying to become bigger?” Nadella said. “It’s because the place where the constraints really are is distribution. The only open distribution platform for any gaming content–guess what?–is Windows…the biggest store on Windows is Steam. It’s not ours. People can do any pay instrument, whereas all the other gaming distribution platforms are closed.”
Microsoft’s announcement that it sought to buy Activision Blizzard for $69 billion came on the same day that the Justice Department and FTC announced plans to rewrite its guidelines on mergers. Reports have since confirmed the FTC will be taking the lead on reviewing the acquisition, which will look at the possible effects the buyout would have on competition within the industry. The FTC recently sued to block two major mergers: Nvidia’s $40 billion attempt to purchase the semiconductor company Arm and Lockheed Martin’s attempted $4.4 billion acquisition of rocket engineer manufacturer Aerojet Rocketdyne Holdings.
Microsoft CEO of gaming Phil Spencer has stated Microsoft will honor existing multiplatform agreements in the wake of the Activision Blizzard deal and expressed a desire to keep Call of Duty on PlayStation platforms. Minecraft remained multiplatform following Microsoft’s purchase of Mojang in 2014, as have numerous Bethesda titles following Microsoft’s acquisition of ZeniMax Media, which cleared regulatory barriers last year.
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