It appears that the case is becoming more difficult for Microsoft to win as the role of FTC expands. However, recent developments suggest that Microsoft has no intention of backing down and is instead taking aim at PlayStation with the allegation that it intends to grow by causing resistance to the deal.
Microsoft, whose $69 billion acquisition of Activision Blizzard is being challenged in court by the US Federal Trade Commission, is arguing that the deal would actually “promote competition” because Sony‘s PlayStation already has a larger share of the console market and far more exclusive games.
Yesterday, various reports emerged stating that Microsoft president Brad Smith is quoted as saying that the company made a legal agreement with the FTC to keep Call of Duty available on competing consoles like PlayStation. This was because, according to FTC, the deal will “enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.”
In addition, as was previously reported, Xbox is also prepared to reach an agreement to include PlayStation Plus as part of Call of Duty’s offer; however, according to Brad, Microsoft made multiple offers even before their meetings with FTC last week, but the agency still voted to sue to block the deal.
According to Smith, the FTC’s case is like a hypothetical world in which the only two gaming consoles on the market are made by Sony and Microsoft. He claims that “Sony controls 70% of that market, while we hold 30%.” He said that a judge’s first order of business will be to determine whether or not the FTC’s lawsuit is a case that will promote competition or whether it is really a case that will protect the largest competitor from the competition.
For the sake of argument, let’s say Smith is correct that PlayStation has 286 exclusive games and Xbox has 59, though it’s not entirely clear how he came up with those figures. However, Smith claims that a judge will “have to decide whether going from 59 to 60 is such a danger to competition that he should stop this [acquisition] from moving forward.” Even more shocking is the fact that how, as Smith seems to imply, Microsoft’s acquisition of Activision Blizzard would result in just one exclusive game for Xbox.
However, let’s not jump to conclusions too quickly because this was just a hypothetical statement, but it appears as though Xbox is now directly targeting PlayStation rather than focusing on the deal. Both the companies are now face to face, doing everything they could to undermine one another. It still remains to be seen how other countries react to this, and if they will follow FTC’s footsteps.
Let us know what you think about this statement from Brad in the comments, and if PlayStation is doing the right thing by making call of Duty a baseline to stop this deal from going through.