Microsoft Defends Proposed $69 Billion Activision Deal To FTC

Defending its proposed $69 billion acquisition of Activision, Microsoft is telling the Federal Trade Commission that the deal will enable the company to be more competitive in the gaming industry -- particularly in mobile gaming.

“Microsoft is buying Activision to meet the billions of gamers who choose to play on mobile devices instead of a console or PC, and to learn how to make games that appeal to and engage them,” the company said Thursday in a filing with the FTC.

Microsoft also said its Xbox division aims to make Activision’s non-mobile games more broadly available.

The company's filing comes in response to the FTC's lawsuit to block the merger.

Last month, the agency alleged in an administrative complaint that the deal would enable Microsoft to harm consumers by withholding or degrading Activision's content.

If the merger goes through, it would add the popular games Call of Duty and World of Warcraft to Microsoft's existing lineup.



Microsoft writes in the new filing that it wouldn't make economic sense to prevent other console manufacturers from offering Activision's games.

“Xbox cannot afford to take Activision’s games exclusive without undercutting the basic economics of the transaction,” Microsoft writes.

“Maintaining broad availability of Activision games is both good business and good for gamers,” the company says, adding that Activision's value to Xbox comes from “business as usual,” including the continued sale of Call of Duty on Sony PlayStation.

"Paying $68.7 billion for Activision makes no financial sense if that revenue stream goes away,” Microsoft writes. “Nor would it make sense to degrade the game experience and alienate the millions of Call of Duty players who play together using different types of consoles.”

The company also disputes that the merger would harm competition in the industry.

“The acquisition of a single game by the third-place console manufacturer cannot upend a highly competitive industry,” Microsoft writes. “That is particularly so when the manufacturer has made clear it will not withhold the game.”

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