Microsoft-Activision merger: US court hearing begins over biggest ever tech deal | Business News

Microsoft’s record takeover bid for video games giant Activision Blizzard has gone before a US federal court.

The Windows and Xbox maker wants to buy the company best known for the Call Of Duty, Warcraft, and Diablo franchises for $69bn (£54.2bn). It would be the largest tech acquisition ever.

But the UK competitions watchdog blocked it in April over concerns it would hurt competition in cloud gaming, and America’s Federal Trade Commission (FTC) said it would give Microsoft‘s platforms an unfair edge over rival PlayStation as they would secure exclusive access to Activision’s popular games.

Microsoft now has a five-day legal hearing to make its arguments to the FTC – and the case has already brought everything from Indiana Jones to sci-fi role-playing games into the focus of a courtroom.

Here are the key moments from day one – and what’s to come later.

Call Of Duty ‘could have skipped Xbox’

Call Of Duty, the long-running military shooter franchise, is one of the biggest prizes at stake for Microsoft if the acquisition goes through. The most recent entry in the series raked in $1bn in just 10 days.

But Microsoft’s Sarah Bond told the hearing on Thusday that the latest Xboxes risked missing out on the series, as Activision wanted a fresh deal that gave it a greater share of revenue earned by Xbox versions of the games.

She said: “It was clear Call Of Duty would be on PS5. That would not have been good if it was not also on Xbox.”

Microsoft vows that under its ownership, Call Of Duty would remain on PlayStation, where the series sells most, but Sony claims its platform would eventually lose out.

Call Of Duty: Modern Warfare II releases this month
Call Of Duty: Modern Warfare II is the latest instalment in the popular franchise

Microsoft thinks new consoles are five years away

Gamers face a long wait for the next generation of consoles, if Microsoft’s prediction is correct.

In court documents, the company says it doesn’t expect the next Xbox or PS6 until 2028. This came up because Microsoft says it has offered Sony a 10-year deal for Call Of Duty, meaning it would appear on its next console.

A 2028 release would mean eight years after the launch of the current systems, the PS5 and Xbox Series X and S, which both released during the pandemic in late 2020.

Supply chain issues meant they have been hard to find until relatively recently, and demand remains strong.

Microsoft's Xbox Series X (black) and series S (white) gaming consoles are displayed at a flagship store of SK Telecom in Seoul on November 10, 2020. (Photo by Jung Yeon-je / AFP) (Photo by JUNG YEON-JE/AFP via Getty Images)
Xbox Series X and S released in November 2020

Indiana Jones and the exclusivity deal

Never mind his new film, Indiana Jones is now making headlines thanks to video game deal-making.

An Indy game has been in the works at developer MachineGames for several years now. The team is part of the Bethesda Softworks company, which was bought by Microsoft for $7.5bn in 2020.

Speaking on Thursday, Bethesda’s Pete Hines revealed the game is Xbox and PC exclusive, even though the initial agreement with franchise owner Disney (before Microsoft’s acquisition) would have seen it release elsewhere.

But Hines also spoke to the benefits of being able to concentrate on fewer consoles, saying Bethesda’s upcoming science-fiction epic Starfield, one of the most anticipated of 2023, would not be releasing as soon as September if a PS5 version had also been made.

Starfield releases on Xbox and PC in September 2020. Pic: Microsoft/Bethesda
Starfield releases on Xbox and PC in September 2020. Pic: Microsoft/Bethesda

PlayStation and Xbox bosses up next

Friday will see PlayStation chief Jim Ryan and his Xbox counterpart Phil Spencer go head-to-head (no, not in a Zuckerberg vs Musk-style cage fight).

Spencer will be giving evidence live at the hearing, while Ryan will appear in a pre-recorded video.

It means he won’t face potentially awkward questions about an email revealed at Thursday’s hearing, in which he seemed to contradict his public stance by saying he’s “pretty sure” Call Of Duty will remain on PlayStation.

Still to come between now and the trial’s final day next week are the likes of Activision Blizzard and Microsoft chiefs Bobby Kotick and Satya Nadella.

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