Microsoft CEO Satya Nadella and other Xbox executives will meet with the Federal Trade Commission (FTC) this week to discuss the company's proposed acquisition of Activision Blizzard. The meeting was part of the FTC's ongoing review of the deal, which is valued at $69 billion.
Nadella and the Xbox executives will reportedly tell the FTC that the acquisition would not harm competition in the video game industry. The Verge reports the executive team will claim that Microsoft and Activision Blizzard are complementary businesses, and that the deal would allow Microsoft to better compete with other gaming giants, such as Sony and Tencent.
The acquisition of Activision Blizzard would be Microsoft's largest-ever deal and would make it the world's second-largest game maker behind Nintendo. Activision Blizzard has more than 400 million monthly active players across its franchises, which also include Call of Duty, Candy Crush, Hearthstone, World of Warcraft, and Overwatch. The FTC is expected to make a decision on the acquisition by the end of this year.
In addition to meeting with the FTC, Microsoft has also been working to address concerns raised by some regulators about the deal. For example, the company has reportedly agreed to sell off some of Activision Blizzard's assets, such as the Candy Crush franchise.
The FTC's review of the acquisition is likely to be closely watched by other companies in the video game industry. If the deal is approved, it could set a precedent for future mergers and acquisitions in the sector.
Convincing Global Regulators to Green Light the Merger
The meeting between Microsoft and the FTC is a sign that the deal is still under active review. It is also a sign that Microsoft is taking the FTC's concerns seriously. The company's willingness to sell off some of Activision Blizzard's assets is a positive sign, as it shows that Microsoft is willing to make concessions in order to get the deal approved.
However, the FTC is still likely to have some concerns about the deal. The agency will need to be convinced that the acquisition will not harm competition in the video game industry. Microsoft will need to provide the FTC with a detailed explanation of how the deal would benefit consumers.
If the deal is approved, it would be a major victory for Microsoft. However, if the deal is blocked, it would be a setback for the company and could have a negative impact on its position in the video game industry. Last week the FTC took out a restraining order that prevents Microsoft from closing the deal before a decision is made.
Microsoft has seen the deal accepted by many global regulators. Among them is the European Commission, which is notoriously strict on Big Tech companies. Japan's regulator has also approved the deal, despite concerns about how it would impact local gaming giants Sony and Nintendo.
South Korea, China, and Brazil are other notable markets that have approved the acquisition. However, the Competition and Market Authority (CMA) in the UK rejected the deal, blocking it from happening in the country. Microsoft is now appealing that decision and has suggested it would simply not offer Activision games in the UK if the CMA does not change its mind.