Tag Archives: Activision Blizzard

Microsoft-Activision Deal Approved By Judge

Microsoft, ,

A federal judge in San Francisco has denied the Federal Trade Commission’s motion for a preliminary injunction to stop Microsoft from completing its acquisition of video game publisher Activision Blizzard, CNBC reported.

The deal isn’t completely in the clear, though. The FTC can now bring the decision to the U.S. Court of Appeals for the 9th Circuit, and the two companies must find a way forward to resolve opposition from the Competition and Markets Authority in the United Kingdom.

“This Court’s responsibility in this case now is narrow. It its to decide if, notwithstanding these current circumstances, the merger should be halted – perhaps even terminated – pending resolution of the FTC administrative action,” Judge Jacqueline Scott Corley wrote in her decision, published Tuesday. “For the reasons explained, the Court finds the FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition. To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content. The motion for a preliminary injunction is therefore DENIED.”

Microsoft Vice Chair and President Brad Smith tweeted: “Our statement on today’s decision: We’re grateful to the Court in San Francisco for this quick and thorough decision and hope other jurisdictions will continue working towards a timely resolution. As we’ve demonstrated consistently throughout this process, we are committed to working creatively and collaboratively to address regulatory concerns.”

Activision posted the following on its corporate news website:

Activision Blizzard CEO Bobby Kotik sent the following email to employees on Tuesday:

Today, a U.S. federal judge ruled in our favor, denying the Federal Trade Commission’s attempt to block our merger with Microsoft.

We’re grateful to the court for the way this process was handled and the thoughtfulness of the decision. The U.S. joins the 38 countries where our deal can proceed – these decisions are based on facts and data that show our merger is good for players and for competition in the industry.

We’re optimistic that today’s ruling signals a path to full regulatory approval elsewhere around the globe, and we stand ready to work with the UK regulators to address any remaining concerns so our merger can quickly close.

We’ll continue to keep you updated on our progress. Thank you for all you do for our players, for our company, and for each other.

With gratitude,
Bobby

The Verge reported that in a statement, the FTC spokesperson Douglas Farrar said the FTC was still planning its next move. “We are disappointed in this outcome given the clear threat this merger poses to open competition in cloud gaming subscription services, and consoles. In the coming days we’ll be announcing our next step to continue our fight to preserve competition and protect consumers,” said Farrar.

According to The Verge, the judge’s ruling now allows Microsoft to close its Activision Blizzard deal ahead of the July 18th deadline, but only if the company is willing to close around the UK or if the Competition Markets Authority (CMA) is willing to negotiate some form of remedy. The UK regulator moved to block Microsoft’s proposed acquisition in April, and Microsoft is currently appealing that decision with a hearing set to start on July 28th.

The CMA confirmed the decision in a statement to The Verge, noting that the regulator is “ready to consider any proposals from Microsoft to restructure the transaction in a way that would address the concerns set out in our Final Report.”

The Competition Appeal Tribune (CAT) will need to approve or deny this request, but it’s more than likely that it will be approved to allow both parties to negotiate further.

In my opinion, it appears that the Microsoft -Activision acquisition has a good chance of happening. The CMA appears to want to work with Microsoft to come to some sort of agreement. If this goes well, Microsoft will have one more country that approves the acquisition.

EU Commission To Approve Microsoft’s Activision Blizzard Acquisition

Microsoft, ,

EU antitrust regulators are set to approve Microsoft Corp’s $69 billion acquisition of Activision next week, with May 15 as the likeliest date, people familiar with the matter said, Reuters reported.

The European Commission’s imminent clearance comes nearly three weeks after the UK competition authority blocked the deal, the biggest-ever deal in gaming, over concerns it would hinder competition in cloud gaming.

The EU antitrust enforce is expected to clear the acquisition after Microsoft agreed to licensing deal with cloud streaming rivals including Nvidia, Ukraine’s Boosteroid, and Japan’s Ubitus, other people with direct knowledge of the matter told Reuters in March.

It also has an agreement with Nintendo to bring Activision’s Call of Duty to its gaming platforms should the acquisition go through, U.S. distributor Valve Corp, owner of the world’s largest video game distribution platform, Steam, declined a contract saying it trusts Microsoft.

The Commission, which has set a May 22 deadline for its decision, declined to comment.

VideoGamesChronicle reported that the European Commission has confirmed plans to publish its verdict by May 22, and it has previously been claimed that Microsoft’s willingness to offer game licensing deals to rivals is likely to address its antitrust concerns.

According to VideoGamesChronicle, last month, the UK’s Competition and Markets Authority (CMA) said it was preventing the deal due to concerns about its impact on the future of the cloud gaming market.

Microsoft and Activision quickly confirmed their intention to appeal the CMA’s ruling, which the former had called “bad for Britain” and the latter has labeled “irrational”.

Microsoft has reportedly hired a lawyer known for repeatedly defeating the EU regulator in competition cases to lead its appeal against the CMA’s decision.

Windows Central appears to be skeptical about the outcome, and posted a headline titled: “This report says the EU will approve Microsoft’s Activision deal for Xbox, but will it?”

Windows Central wrote: Microsoft is currently in the process of trying to acquire Activision-Blizzard-King, makers of Call of Duty, World of Warcraft, and Candy Crush Saga. The deal has been fraught with regulatory scrutiny, with Sony PlayStation decrying the deal to regulators across the globe.

The UK regulatory arm known as the CMA blocked the deal a few weeks ago, Windows Central wrote, claiming that it would give Microsoft a monopoly in this very, very nascent market – a market in which Microsoft says it can only serve to 5,000 concurrent users in the UK.

In my opinion, anyone who has been paying close attention to the Microsoft – Activision Blizzard acquisition has been on an emotional roller coaster, waiting to see what the various regulators of different countries will decide. I’m hoping the EU antitrust regulators will approve of the acquisition.

Activision Blizzard Pays SEC $35 Million To Settle Probe

Gaming,

CNBC reported that video game developer Activision Blizzard agreed to pay a $35 million settlement over charges it failed to maintain “adequate” controls for collecting and assessing reports of workplace misconduct and that it violated federal whistleblower protection rules, the Securities and Exchange Commission said Friday.

The SEC claimed workplace misconduct complaints were neither collected nor analyzed as expected by public disclosure regulations, CNBC reported. “Moreover, taking action to impede former employees from communicating directly with the Commission staff about a possible security law violation is not only bad corporate governance, it is illegal,” SEC director Jason Burt said.

The settlement is not an admission of wrongdoing but concludes a probe that focused on Activision Blizzard’s standards from 2018 to 2021.

The SEC included the following paragraph in its press release:

“The SEC’s order finds that Activision Blizzard failed to implement necessary controls to collect and review employee complaints about workplace misconduct, which left it without the means to determine whether larger issues existed that needed to be disclosed to investors,” said Jason Burt, Director of the SEC’s Denver Regional Office. “Moreover, taking action to impede former employees from communicating directly with the Commission staff about a possible securities law violation is not only bad corporate governance, it is illegal.”

The Wall Street Journal reported that female employees at Activision complained for years about alleged sexual assaults and mistreatment. The SEC’s probe examined what Activision’s management knew about the alleged incidents and how it addressed them internally, the Journal reported.

Activision’s system wasn’t designed to collect and analyze complaints about workplace misconduct across its separate business units, the SEC said in a settlement order. As a result, Activision’s management and directors often didn’t have information about employee complaints or incidents involving harassment, the SEC order said.

According to the Wall Street Journal, the settlement also said that Activision’s separation agreements with employees from 2016 to 2021 included an improper clause requiring ex-workers to tell the company if agencies such as the SEC contacted them about reports of misconduct. The SEC said that requirement violated the SEC’s whistleblower-protection rules, which seek to ensure that company insiders aren’t prevented from informing regulators about wrongdoing.

It is interesting to note that The Wall Street Journal reported that the $35 million fine is a significant penalty for an enforcement case focused on a company’s disclosure procedures. The SEC under Chair Gary Gentler and Enforcement Director Gurbir S. Grewal has ratcheted up penalties, saying fines need to be higher to effectively deter wrongdoing.

My hope is that the SEC’s order will result in Activision Blizzard to actually listening to employees who have been harassed or abused in the workplace and enact a significant penalty upon the person(s) who engaged in harassment or abuse. If not, I suppose the SEC can take additional action on the company.

FTC Sues To Block Microsoft’s Acquisition of Activision

Microsoft, , ,

The Federal Trade Commission on Thursday sued to block Microsoft’s $69 billion acquisition of the video game publisher Activision Blizzard, charging that the massive deal would allow the Washington tech giant to suppress its competitors in gaming, The Washington Post reported.

According to The Washington Post, the lawsuit represents the FTC’s most significant effort to rein in consolidation in the tech industry since prominent tech critic Lina Khan (D) became the commission’s chair and was expected to usher in an era of antitrust enforcement characterized by a willingness to bring cases in court rather than pursue settlements with companies.

The FTC lawsuit against Microsoft could foil the company’s ambitions to become a heavier hitter in gaming frontiers. Activision is the owner of popular titles such as Candy Crush and Call of Duty, and its acquisition could bolster Microsoft in its competition with Japanese console makers Nintendo and Sony.

The Washington Post also reported that the commission voted Thursday on a party-line vote to issue the lawsuit in administrative court, with the three Democrats in favor of the complaint and one Republican against it.

The Federal Trade Commission (FTC) posted the following:

The Federal Trade Commission is seeking to block technology giant Microsoft Corp. from acquiring leading video game developer Activision Blizzard, Inc. and its blockbuster gaming franchises such as Call of Duty, alleging that the $69 billion deal, Microsoft’s largest ever and the largest ever in the gaming industry, would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.

In a complaint issue today, the FTC pointed to Microsoft’s record of acquiring and using valuable gaming content to suppress competition from rival consoles, including its acquisition of ZeniMax, parent company of Bethesda Softworks (a well-known game developer). Microsoft decided to make several of Bethesda’s titles, including Starfield and Redial Microsoft exclusives despite assurances that it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles…

…Activision is one of only a very small number of top video game developers in the world that create and publish high-quality video games for multiple devices, including video game consoles, PCs, and mobile devices. It produces some the most iconic and popular video game titles, including Call of Duty, World of Warcraft, Diablo, and Overwatch, and has millions of monthly active users around the word, according to the FTC’s complaint. Activision currently has a strategy of offering its games on many devices regardless of producer.

The Wall Street Journal reported that Sony has been the loudest critic of the planned Activision deal, arguing that it could hurt competition if Microsoft restricts access to Activision games, especially Call of Duty, due to the franchise’s exceptional popularity.

According to The Wall Street Journal, Microsoft has said it doesn’t plan to deny Sony and others access to Activision games and that its deal for the company wouldn’t hurt competition. The company has publicly pledged to give Sony and Nintendo access to new Call of Duty games on their consoles for the next 10 years. Though Microsoft doesn’t disclose Xbox sales, it has said it would still be the third-largest video game console maker after Sony and Nintendo after merging with Activision.

What does this mean for gamers? It seems to me that the FTC’s decision to sue Microsoft over the Activision Blizzard acquisition means there could be a lengthy court battle. There is no way to know how a court will decide this case. Based on what I’ve seen on social media, there are a lot of gamers who hoped the acquisition would happen. The FTC’s decision to sue is disappointing.

Activision Blizzard Require A Phone Number For Its Newest Games

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Fortune reported that Activision Blizzard is removing an anti-cheat precaution from its newest games after players complained it discriminated against poor people.

According to Fortune, just over a week before the launch of Overwatch 2, Activision’s newest shooter, the developer announced that players would need to have a valid phone number to play the game. The system, called SMS Protect, would help the developer keep cheaters and abusive players out of the game. Banned players would be forced to get a new phone number if they wanted to play the game again.

Yet, players found that SMS Protect also excluded anyone on a prepaid phone plan, effectively locking them out of the game. Players with too little income to afford a phone service contract, or who just preferred using prepaid phones, complained that the developer was barring them from enjoying the game.

On Thursday, Blizzard posted “Overwatch 2 Launch Status Update” in its Overwatch Forums. From the post:

SMS Protect

We designed Overwatch 2 be a live service, which enables us to be responsive to a variety of player feedback. We have made the decision to remove phone number requirements for a majority of existing Overwatch players. Any Overwatch player with a connected battle.net account, which includes all players who have played since June 9, 2021, will not have to a provide phone number to play. We are working to make this change and expect it to go live Friday October 7. We will update players once it is in effect.

We remain committed to combating disruptive behavior in Overwatch 2 – accounts that were not connected to battle.net as well as new accounts will still have to meet SMS requirements, which helps to ensure we’re protecting our community against cheating. If a player is caught engaging in disruptive behavior, their account may be banned whether they have a new account or not…

Engadget reported that Call of Duty: Modern Warfare II, which arrives on October 28, will require players to connect a phone number to their battle.net account to play the game. “Call of Duty: Modern Warfare II, newly created Overwatch 2 accounts, and newly created Call of Duty Modern Warfare accounts require a phone number,” says a recently updated support page spotted by PC Gamer.

According to Engadget, the requirement comes following a week of controversy around SMS Protect, the phone-linking system in use by Overwatch 2 and soon Modern Warfare II. Where the studio previously said all players would need to link a phone number to their battle.net account, now that requisite only falls on new Overwatch players. At the moment, it’s unclear if all Warzone 2.0 players will need a mobile phone number to play that game once it arrives on November 16th.

Personally, I understand why Activision Blizzard wants to make an effort to remove players who are cheating, or who are mean to other players, from their games. Failing to remove those players could prevent honest players from returning to the game.

However, I don’t think the solution is to force players to give Activision Blizzard their phone number before they can start playing the newest games. That requirement feels invasive, and could make some players decide to avoid playing the video games that require SMS Protect. It also appears that SMS Protect will exclude players who have pre-paid phone plans, even if those players have never been a problem in other Activision Blizzard games.

CMA Investigates Microsoft Acquisition of Activision Blizzard

Microsoft,

The UK’s Competition and Markets Authority (CMA) announced that it is investigating the anticipated acquisition by Microsoft Corporation of Activision Blizzard, Inc. The CMA stated that July 6, 2022 is the launch of the merger inquiry, and it gave notice to the parties. From the CMA:

“6 July 2022: The Competition and Markets Authority (CMA) is considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act of 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”

CNBC reported that the U.K’s Competition and Market Authority said its investigation would consider whether the deal may harm competition – “for example, through higher prices, lower quality, or reduced choice.” According to CNBC, the CMA set a September 1 deadline for its initial decision.

CNBC also reported that Lisa Tanzi, Microsoft’s corporate vice president and general counsel, said regulatory scrutiny of the deal was to be expected, adding the company would “fully cooperate” with the CMA.

If approved, CNBC reported, the acquisition would have huge implications for the $190 billion video game industry, handing control of incredibly lucrative franchises including Call of Duty, Candy Crush and Warcraft to one of the world’s biggest tech companies.

TechCrunch reported that the United States Federal Trade Commission (FTC) is also currently investigating the Microsoft – Activision Blizzard deal. According to TechCrunch, the FTC regulators have been known “to scupper, or add provisions, to deals, as well as nod them through.”

All of this comes as Activision Blizzard faces what seems to be an ongoing series of controversies. The company was the subject of a two-year investigation by the California Department of Fair Employment and Housing, which it described as having a “‘frat boy’ workplace culture” and a “breeding ground for harassment and discrimination against women.”

TechCrunch pointed out that CEO Bobby Kotick reportedly knew about, yet failed to act, over sexual misconduct and rape allegations.

In short, Activision Blizzard is currently, and has been, a mess. While it is important to keep in mind that there are some wonderful, creative, people who work for that company, it is the inaction of the CEO and the Board that is allowing the controversy to continue. I honestly hope that the regulators allow the Microsoft – Activision Blizzard merger – if for no other reason than to give the employees a better work environment.

Diablo Immortal’s China Release Has Been Delayed

Gaming, ,

Diablo Immortal is the newest game in Activision Blizzard’s Diablo franchise. It was officially released on June 2 for not only mobile devices but also PCs. CNBC reported that shares of the game fell nearly 7% in Hong Kong on Monday after it announced plans to delay the release of Diablo Immortal in China. According to CNBC, the game did not announce a new launch date.

NetEase and Activision Blizzard worked together on Diablo Immortal. The game was set to release in China on June 23, but that has been delayed. The reason for the delay requires some explanation.

Financial Times reported that shares in NetEase dropped on Monday morning after the Chinese company fell foul of China’s censors over a social media post that was suspected of alluding to Winnie the Pooh, a popular way to derisively refer to President Xi Jinping.

According to The Financial Times, the delay came as a screenshot circulated online of a post published by the game’s official account on Weibo, the popular Chinese microblogging site, dated May 22, that read: “Why hasn’t the bear stepped down.”

The remark was interpreted as a reference to China’s President Xi Jinping, who is often illustrated as Disney’s Winnie the Pooh. The cartoon bear has been blacklisted by censors in China for years.

This isn’t the first time that China has cracked down on gaming. In August of 2021, South China Morning Post reported that gamers in China who are under the age of 18 would have their playing time limited to one hour on regular days and two hours on public holidays. That same month, the BBC reported that Tencent announced it was rolling out facial recognition to stop children from playing video games between 10pm and 8am.

Kotaku reported that the postponement of Diablo Immortal in China comes three days before the game’s intended Chinese release and just a few days after the game’s official Weibo account was suspended from being allowed to post.

According to Kotaku, a contact translated what was written on Weibo as “What do you think about the bear?”, but says it was written to be idiomatic. Kotaku notes that either way, if real, it seems an extraordinary thing to have posted on an official account in China.

Kotaku also pointed out that there is a press release that was posted on Blizzard’s Chinese website, stating that the reason for this very last-minute delay is a need to make “a number of optimization adjustments to the game”. (Kotaku appears to have translated this via Google.) The press release also said that the adjustments included improving model rendering, support for a wider range of devices, and “network and performance optimizations”.