Even as the FTC and the US Department of Justice move to ramp up antitrust measures, especially among technology businesses, Microsoft CEO Satya Nadella believes Microsoft’s acquisition of Activision Blizzard will not be banned.
In an interview with the Financial Times, Nadella stated that even if the transaction is completed, Microsoft will still be the industry’s third-largest firm, behind Sony and Tencent. He believes the Activision Blizzard merger will clear regulatory barriers due to the “fragmentation” of the gaming business.
“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.”
Another issue to consider, according to Nadella, is that Microsoft isn’t even the most dominant 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 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 payment instrument, whereas all the other gaming distribution platforms are closed.”
The Justice Department and the Federal Trade Commission unveiled proposals to alter merger criteria on the same day that Microsoft announced its intention to buy Activision Blizzard for $69 billion. According to reports, the Federal Trade Commission (FTC) will head the investigation into the transaction, which will look at the potential impact on industry competition. The Federal Trade Commission has filed a lawsuit to prevent two large mergers: Nvidia’s $40 billion bid for semiconductor maker Arm and Lockheed Martin’s $4.4 billion bid for rocket engineer manufacturer Aerojet Rocketdyne Holdings.
Following the Activision Blizzard merger, Microsoft CEO Phil Spencer claimed that the company will honor current multiplatform agreements and voiced a wish to preserve Call of Duty on PlayStation systems. Following Microsoft’s acquisition of Mojang in 2014, Minecraft remained multiplatform, as did other Bethesda titles following Microsoft’s acquisition of ZeniMax Media, which overcame regulatory hurdles last year.