As a seasoned gamer with decades of experience under my belt, I can’t help but feel a mix of relief and apprehension following the settlement of Microsoft’s antitrust lawsuit over their acquisition of Activision Blizzard. Relief because it means we won’t have to endure the legal battle any longer, and apprehension because the future of our favorite games is still uncertain.
Microsoft has reached a settlement regarding an antitrust dispute initiated by video game enthusiasts over its proposed $69 billion purchase of Activision Blizzard.
On Monday, I learned that both parties involved in the legal dispute have informed the court about reaching an agreement to terminate the lawsuit permanently, a move known as dismissal “with prejudice.” This means the case can’t be reopened or refiled. Unfortunately, the specifics of the deal haven’t been made public. The lawyers for both parties stated in their filing that each party will bear their own legal costs and fees.
2022 saw a federal court lawsuit in California being initiated by gamers from numerous states, emphasizing that the proposed merger could lead to one of the biggest video game companies globally. This potential giant might then have the power to increase prices, restrict production, and decrease consumer options. The complaint cited Microsoft potentially making specific games exclusive to Xbox as a possible scenario. Remarkably, this lawsuit was submitted just 14 days after the Federal Trade Commission filed a suit to halt the deal.
The FTC’s attempt to halt Microsoft’s acquisition of Activision was unsuccessful when Judge Jacqueline Scott Corley refused the FTC’s request for a temporary injunction. She reasoned that Microsoft’s ownership of Activision won’t stifle competition in the video game library subscription and cloud gaming markets, as there would be increased access to popular Activision games for consumers. Furthermore, she determined that a court order preventing the deal was unnecessary at this time because consumers could demand divestiture after the merger has been completed. Subsequently, appeals were made.
The group of gamers requested an immediate trial date from the court following a ruling by the 9th U.S. Circuit Court of Appeals. They are still pushing for a court order that would force Microsoft to sell off Activision, asserting that the combined company is hurting them through the cancellation of premium games and price increases. Moreover, they alleged that Microsoft is undermining competition by letting go of a large number of Activision employees, rapidly expanding its Game Pass subscriber base, and engaging in other questionable practices.
Speaking at a hearing, Microsoft’s CEO Satya Nadella explained the concept of “network effects,” which suggests that the worth of a product rises as more people utilize it. This advantage is particularly strong for platforms that expand rapidly, as they attract more content from external developers due to their larger user base. Legal representatives for gamers cited this as a reason for these large platforms having a competitive edge over smaller competitors in the subscription market. In line with this principle, internal Microsoft documents stated, “The first to scale wins” when it comes to content subscriptions. Following the merger, Game Pass saw its subscriber base increase from around 25 million in 2022 to more than 35 million.
Over time, Microsoft’s dominance in the market is growing, leading to price hikes, game cancellations, shrinking development capabilities, and an apparent move towards monopoly status in Game Pass, according to Joseph Saveri, a lawyer representing gamers who also takes on similar cases against AI companies, in a court submission.
Microsoft has contested the gamers’ portrayal of Nadella’s deposition, where he is said to have stated that the company doesn’t hold a leading position in specific gaming markets. Moreover, they claim that comparing the growth of Game Pass subscribers is a misleading comparison between apples and oranges, which holds no significant bearing on the core argument at hand.
Previously, Microsoft completed its merger following numerous regulatory disputes across various regions. This union joined forces between Microsoft, the proprietor of Xbox console, game streaming service, and the globally acclaimed personal computing system, and Activision, known for creating games like Call of Duty, Warcraft, and Candy Crush. At the time, the company did not provide a response to our request for comment.
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2024-10-15 02:24