Diversification is not the right strategy amid market volatility: Eddy Gifford
Microsoft Corp. is fighting back against allegations from the US Federal Trade Commission that its proposed US$69 billion acquisition of Activision Blizzard Inc. would harm competition in the video-gaming industry.
In a filing with the FTC on Thursday, Microsoft said the tie-up would create more choices for gamers and game developers.
“The commission cannot meet its burden of showing that the transaction would leave consumers worse off,” Microsoft said.
The FTC earlier this month voted to sue to block the merger between the Xbox maker and Activision Blizzard, which produces popular video games including Call of Duty. The agency said it's concerned the deal will hurt other players in the US$200 billion gaming market by limiting rivals' access to Activision's biggest titles.
Microsoft this week said that it's hoping to strike a deal with the US as well as European regulators, who are investigating the merger's potential anticompetitive effects.
“Even with confidence in our case, we remain committed to creative solutions with regulators that will protect competition, consumers, and workers in the tech sector,” Microsoft President Brad Smith said in a statement.
In a bid to win regulatory approval, Microsoft had offered rival Sony Group Corp. the right to sell Call of Duty as part of its gaming subscription service. But regulators so far haven't been convinced by Microsoft's proposed concessions.
Rival gaming companies have been staunch opponents to Microsoft's bid for Activision. Sony accused the company of seeking to lock consumers to the Xbox and leveraging its other products to “foreclose cloud gaming at a critical point of its evolution.”
In the filing, Microsoft said there is “no evidence” that it plans to block off rivals' access to Call of Duty in its proposed merger.
Microsoft's proposed purchase of Activision Blizzard is one of the 30 biggest acquisitions of all time. The transaction would give Microsoft some of the most popular video game franchises, including Call of Duty and World of Warcraft. The Xbox maker already owns the Halo franchise and Minecraft virtual-world-building game.