Microsoft made waves in the gaming industry last month when the company made the decision to acquire Activision Blizzard for a staggering $68.7 billion. This led the US Federal Trade Commission to review the acquisition in case it may harm the possibility of competition for the company. Microsoft's executive chairman, Satya Nadella has now spoken out about the review.
In a recent interview with the Financial Times, Nadella downplayed the possibility of Microsoft's Activision Blizzard takeover being blocked by the FTC, as he stated that the buyout should be looked at in the context of the gaming industry where Microsoft is not the king of the hill. If the buyout is approved by the FTC, Microsoft would sit in third place in the video game industry value hierarchy behind Sony and Tencent.
Nadella's main argument was the fact that Microsoft, Sony, and Tencent's market shares range between 10%-20%, which means that the company is far from having a monopoly even after the acquisition takes place. Nadella also went on to state that the company will merely become a bigger player in a highly fragmented market owing to how diverse content creation platforms are.
The FTC's review of Microsoft's Activision Blizzard takeover came about owing to the fact that the company made the move to acquire Bethesda Softworks and its parent company ZeniMax just over a year ago. The commission has shut down acquisitions that it felt were unfair in the past such as Nvidia's attempt to purchase UK-based chip firm Arm for $40 billion last year, and will likely not hesitate to do the same if it finds that the acquisition could harm the possibility of fair competition.
The FTC is yet to make any statement regarding Sony's acquisition of Bungie at this moment. This may partially be due to the fact that Sony's acquisition of Bungie cost $3.6 billion, whereas Microsoft's Activision Blizzard acquisition is said to cost an eye-watering $68.7 billion. The fact that Sony is sitting above Microsoft in terms of its value may possibly draw the attention of the commission, although this remains to be seen.
It seems as though the FTC is not the only party concerned about Microsoft's Activision Blizzard takeover. A French retailer placed a sign on the shelf where its PS5's were located warning customers about buying the console after Microsoft's Activision Blizzard acquisition. While this may have been a genuine concern at first, the Call of Duty franchise, which was mentioned in the warning, will still be making its way to PlayStation for some time to come.
Source: Financial Times
