MSFT - Microsoft Threatens To Abandon $68 Billion Activision Deal
2023-06-23 10:17:17 ET
%Microsoft () is threatening to abandon its $68 billion U.S. purchase of video game maker %ActivisionBlizzard () if the deal is delayed by a federal judge in America.
The tech giant made the threat as a weeklong court hearing began that could ultimately determine the fate of the Activision acquisition.
Specifically, Microsoft said that if a federal judge grants an injunction to delay the deal’s closing, it will likely abandon the deal.
The hearing in a U.S. District Court is taking place in San Francisco, where the Federal Trade Commission (F.T.C.) began making its case that Microsoft’s acquisition of Activision Blizzard would be bad for competition in the video game industry.
The F.T.C. is asking Judge Jacqueline Scott Corley for an injunction that would bar Microsoft from completing the deal before the F.T.C. had the chance to argue the case in its internal court.
There are concerns that Microsoft could make Activision Blizzard’s popular video games, such as %CallofDuty , exclusive to its Xbox console or degrade their quality on other platforms to make the Xbox more enticing to gamers.
The F.T.C. also claims that absorbing Activision Blizzard would give Microsoft an unfair advantage in cloud gaming.
Microsoft has sought to address these issues by promising to provide access to Call of Duty and other game titles to rival video game consoles for a period of 10 years.
The Call of Duty video game franchise has generated $30 billion U.S. in revenues since its launch in 2003.
The stakes are high in the court hearing. If Microsoft wins, it will be a blow to the F.T.C.’s authority and likely cause the agency to drop its challenge to the Activision purchase.
A win for the F.T.C. would put pressure on Microsoft and Activision to reconsider the multibillion-dollar deal, something Microsoft says it is already doing.
Most other governments around the world, including the European Union, have already approved the acquisition of Activision Blizzard by Microsoft.
Microsoft’s stock has increased 30% in the last 12 months to $336.86 U.S. per share. Activision Blizzard’s stock has gained 8% in the past year and trades at $82.30 U.S. a share.