Google LLC and Nvidia Corp. have reportedly raised concerns to the Federal Trade Commission about Microsoft Corp.’s proposed acquisition of Activision Blizzard Inc. for $68.7 billion.
Bloomberg reported the development late Thursday, citing sources familiar with the matter. It’s believed Google and Nvidia may be asked to testify as part of an upcoming FTC trial focused on the Activision Blizzard acquisition. The trial is set to begin on Aug. 3.
Last January, Microsoft inked a $68.7 billion deal to acquire Nasdaq-listed Activision Blizzard, which ranks as one of the world’s largest video game developers by revenue. Activision Blizzard generated an operating income of $485 million on $1.78 billion in sales during the third quarter. Its popular collection of video games had 368 million monthly active users as of Sep. 30.
Last month, the FTC filed suit to block Microsoft from completing the acquisition. The FTC argues that the deal would negatively impact the company’s rivals in the video game console and cloud gaming markets. Those rivals include Nvidia, which provides a cloud gaming service called GeForce Now that competes with Microsoft’s Xbox Game Pass offering.
Nvidia, along with Google, has reportedly provided information to the FTC about the antitrust implications of Microsoft’s Activision Blizzard acquisition. The companies’ feedback reportedly underscores that the deal could negatively impact competition in the cloud, subscription and mobile gaming markets.
According to Bloomberg, Nvidia told the FTC that “equal and open access to games is important.” But the company reportedly “didn’t go so far as to oppose the acquisition.”
Last month, a Microsoft executive stated that Sony Corp. was the “only major opposer” to the deal. Sony, which competes with Microsoft in the video game market, has argued that the deal would harm developers and consumers. It’s believed that the feedback provided by Nvidia and Google could add more weight to the FTC’s arguments in the antitrust case over the deal.
“We are prepared to address and have been proactively addressing issues raised by regulators and competitors to ensure that the deal closes with confidence,” Microsoft said in a statement. “We want people to have more access to games, not less.”
As part of its efforts to address regulators’ concerns, the company has offered a ten-year video game distribution agreement to Sony. The agreement is designed to ensure that many of Activision Blizzard’s most popular games roll out to Microsoft and Sony consoles on the same day. However, the latter company has reportedly not accepted yet the offer.
If the proposed acquisition of Activision Blizzard is approved, Microsoft’s video game division would become the third largest in the industry by revenue. The company previously spent $7.5 billion in 2021 to acquire ZeniMax Media Inc., another major video game developer.
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