A California judge ruled in Microsoft’s favor on the FTC’s request for a preliminary injunction blocking its $68.7 billion purchase of Activision Blizzard. The FTC is now appealing its loss to Microsoft, all before the deal deadline of July 18th. The Ninth Circuit Court of Appeals will now need to rule on Judge Jacqueline Scott Corley’s decision and even whether there should be an extension to a temporary restraining order (TRO) which is currently set to expire at 11:59PM PT on Friday July 14th.
This restraining order is the key part of the deal right now, as if there is no order in place then Microsoft has a window of opportunity to close its Activision Blizzard deal. But there’s still the problem of the UK’s regulators blocking the deal.
The UK’s Competition and Markets Authority (CMA) and Microsoft have agreed to pause their legal battles to figure out how the transaction might be modified in order to address the CMA’s cloud gaming concerns. The CMA blocked Microsoft’s deal earlier this year, citing competition fears in the emerging cloud gaming market.
The CMA has warned that a proposed restructuring of its merger could result in it starting a new investigation and the regulator has issued a notice of extension for its overall investigation into the deal, moving the date for final undertakings or a final order from July 18th to August 29th. Under the terms of the deal, Microsoft has until July 18th to try and close its proposed acquisition; otherwise, it has to renegotiate new terms or pay $3 billion in breakup fees to Activision Blizzard.
You can read a full summary of each day of the FTC v. Microsoft hearing here:
- Day one: Microsoft opened the FTC hearing with a Sony bombshell
- Day two: Has Xbox really lost the console wars?
- Day three: Sony’s PlayStation chief says publishers hate Xbox Game Pass
- Day four: Microsoft and Activision CEOs battle to keep a giant Xbox deal alive
- Day five: Microsoft’s FTC fight comes down to Call of Duty
Follow along for all our ongoing coverage of Microsoft’s battle with the FTC over its Activision Blizzard deal.
- It’s too late to delete Microsoft’s secret Xbox docs.
That hasn’t stopped the US District Court for the Northern District of California, though. After a massive leak of Microsoft’s Xbox roadmap earlier today, the District Court has now deleted all of the evidence in the FTC v. Microsoft case from its website. The FTC has also made it clear this leak was Microsoft’s mistake. Oops.
- A lesson in not counting your tadpoles before they’ve hatched.
When Microsoft was considering future release titles to bring to Game Pass last May, Larian’s hit CRPG Baldur’s Gate 3 barely made the list. The game was described as a “Second-run Stadia PC RPG” in leaked emails from the FTC v. Microsoft case.
The explosive overnight popularity of Baldur’s Gate 3 must be pretty embarrassing in hindsight, especially given its absence on Xbox.
- Phil Spencer gets real about gaming studio closures.
It’s not about profits. When asked if Game Pass could have prevented studio closures in a leaked email from the FTC v. Microsoft case, the Microsoft Gaming CEO said that closures are “almost always” because of “leadership leaving (Lionhead as an example) or team just losing its passion (Ensemble as an example).”
Microsoft’s new disc-less Xbox Series X is far from the only news that just leaked out of the FTC v. Microsoft case. The documents may also reveal Microsoft’s far future plans for 2028 — by which the company believed it could achieve “full convergence” of its cloud gaming platform and physical hardware to deliver “cloud hybrid games.”Read Article >
“Our vision: develop a next generation hybrid game platform capable of leveraging the combined power of the client and cloud to deliver deeper immersion and entirely new classes of game experiences.”
Microsoft Gaming CEO Phil Spencer would really like to buy Nintendo someday. In an August 2020 email to two top Microsoft marketing executives, Spencer wrote that “Nintendo is THE prime asset for us in Gaming” and that “getting Nintendo would be a career moment and I honestly believe a good move for both companies.”Read Article >
The emails were revealed as part of a tranche of leaked documents from the FTC v. Microsoft lawsuit. One executive, Takeshi Numoto, asked Spencer and Chris Capossela in an email titled “random thought” about why Microsoft isn’t finding acquisition targets like Nintendo a “more attractive” way to “increase our consumer exposure and relevance.” (At the time, Microsoft was in discussions to acquire TikTok, and Numoto didn’t feel it would be the best match.)
Microsoft is planning to refresh its Xbox Series X console in 2024 with an all-new design and features. Codenamed Brooklin, the unannounced console refresh has been accidentally revealed in new FTC v. Microsoft documents this week.Read Article >
The new Xbox Series X design looks a lot more cylindrical than the existing console and will ship without a disc drive. Internal confidential Microsoft documents reveal it has 2TB of storage (up from 1TB), a USB-C front port with power delivery, and an “all-new, more immersive controller.”
A document released as part of the FTC v. Microsoft case confirms what was long expected: The Elder Scrolls VI isn’t going to launch for a few years, and it isn’t coming to PlayStation. According to the new chart, which Microsoft produced for the FTC, the next Elder Scrolls game isn’t expected to launch until at least 2026 — something a Microsoft lawyer also mentioned in the court case. And much like Bethesda’s most recent games — Starfield and Redfall — it’ll be available on both PC and Xbox when it does launch.Read Article >
In a statement about exclusivity attached to The Elder Scrolls VI section of the chart, which comes from an interview with Xbox head Phil Spencer in GQ, Spencer said, “In order to be on Xbox, I want us to be able to bring the full complete package of what we have. And that would be true when I think about Elder Scrolls VI.”
Rumors of a Nintendo Switch 2 announcement have grown recently after reports of developer demos at Gamescom last month. Now, we know that Activision was briefed on a next-generation Nintendo Switch last year, thanks to internal emails from the FTC v. Microsoft case.Read Article >
Activision executives, including CEO Bobby Kotick, met with Nintendo executives in December 2022 to discuss a next-generation Switch. In an internal email chain, Chris Schnakenberg, head of Activision’s platform strategy and partner relations, prepared a summary of the “Switch NG” (Switch next-generation) inside a document labeled “NG Switch Draft.pdf.”
Microsoft has been planning to stream PC games over the cloud, internal emails from the FTC v. Microsoft case show. Microsoft currently streams games through its Xbox Cloud Gaming service, but it’s limited to Xbox titles as the servers run specialized Xbox Series X chips. Microsoft has been working on leveraging its Azure servers to stream PC games over Xbox Cloud Gaming.Read Article >
Microsoft CEO Satya Nadella emailed Xbox chief Phil Spencer, Kareem Choudhry, head of cloud gaming at Microsoft, and Sarah Bond, head of Xbox creator experience, in July 2021 after rumors emerged of Google turning Stadia into a white-label cloud gaming service for developers to run their games on.
Microsoft and Activision Blizzard have agreed to extend their merger agreement pending the outcome of negotiations with UK regulators. Both parties will now have until October 18th to finalize the transaction, after missing yesterday’s original deal deadline.Read Article >
“The recent decision in the US and approvals in 40 countries all validate that the deal is good for competition, players, and the future of gaming,” tweeted Lulu Cheng Meservey, Activision Blizzard’s CCO and EVP of corporate affairs. “Given global regulatory approvals and the companies’ confidence that CMA now recognizes there are remedies available to meet their concerns in the UK, the Activision Blizzard and Microsoft boards of directors have authorized the companies not to terminate the deal until after October 18.”
Jul 17Microsoft and CMA get more time to negotiate.
The UK’s Competition Appeal Tribunal has agreed, with some requirements that need to be satisfied on Thursday, to pause Microsoft’s appeal of the CMA decision to block the Activision Blizzard merger. Both the CMA and Microsoft requested this last week, to allow them to negotiate over a cloud gaming deal. The CMA has also extended the date for its final order from July 18th to August 29th, so it’s likely that Microsoft’s deal will tick past the July 18th deadline and could see a temporary extension.
The Federal Trade Commission (FTC) has lost what may be its final attempt to block Microsoft from buying Activision Blizzard. It’s the second loss for the FTC after a US federal judge denied its request for a preliminary injunction earlier this week to block Microsoft from acquiring Activision Blizzard until the conclusion of a separate FTC administrative case.Read Article >
The FTC appealed the decision by Judge Jacqueline Scott Corley, and now the Ninth Circuit Court of Appeals has denied its request for emergency relief to prevent Microsoft from closing the deal until the result of the FTC’s appeal is complete.
- Microsoft responds to the FTC’s emergency motion.
The FTC has filed an appeal over its loss of FTC v. Microsoft with the Ninth Circuit Court of Appeals. It also wants an emergency injunction to temporarily block Microsoft from closing its Activision Blizzard deal until there’s a ruling on the appeal.
Microsoft has now responded to the FTC’s motion, arguing that “the FTC’s claimed emergency is entirely of its own creation,” because the FTC didn’t seek an injunction through federal court until six weeks before the deal close.
Microsoft also claims the FTC could have filed its request for emergency relief earlier, as Judge Corley sent a copy of the ruling to both the FTC and Microsoft on Monday July 10th.
“The Court should not mistake the FTC’s litigation gamesmanship for an emergency meriting this Court’s deviation from the ordinary appellate process,” says Microsoft in its filing.
If the Ninth Circuit Court of Appeals doesn’t grant this emergency injunction then Microsoft is free to close its Activision Blizzard deal after 11:59PM PT tonight, once the temporary restraining order, put in place by Judge Corley, expires.
Finally, Microsoft says the FTC has committed “the cardinal sin of antitrust: mistaking competitive disadvantage for a particular competitor (Sony) with harm to competition and consumers.”
- The CAT awakens.
We’ve been waiting on this one. The UK’s Competition Appeal Tribunal (CAT) is handling Microsoft’s appeal of the Competition and Markets Authority’s (CMA) ruling on its proposed Activision Blizzard acquisition. Things are now starting to get moving at the CAT.
A case management conference has been called for Monday July 17th at 2:30PM UK time “to consider the application made jointly by all parties to adjourn these proceedings pending further discussions between the CMA and Microsoft.”
Both the CMA and Microsoft have agreed to pause their legal battles to negotiate how the transaction might be modified in order to address the CMA’s cloud gaming concerns.
Earlier today the CMA issued a notice of extension for its overall investigation into the deal, moving the date for a final order from July 18th to August 29th. The extension arrived just hours after Bloomberg reported that Microsoft is considering selling its UK cloud-gaming rights to a telecommunications, gaming, or internet company to allow the Activision deal to close with the CMA.
The CAT’s case management conference could reveal some details on what Microsoft is proposing, but it’s also possible that Microsoft will have closed its Activision Blizzard deal by then — providing the Ninth Circuit Court of Appeals doesn’t extend a temporary restraining order (TRO) that’s currently preventing Microsoft from closing its deal until 11:59PM PT tonight.
All eyes are now firmly on Monday.
Jul 1410 million PlayStation sales, or more Game Pass and Xbox sales? Tough call.
Stephen Totilo from Axios has spotted an interesting aside in Xbox CFO Tim Stuart’s testimony. Apparently Microsoft had expected to sell 10 million units of both Starfield and Indiana Jones on PlayStation, but that if it took them exclusive “it could offset losses incurred” through increased Game Pass subscriptions and console sales.
- What’s happening with FTC v. Microsoft?
The situation is changing daily as we approach the key July 18th deal deadline. After the FTC lost its request for a preliminary injunction earlier this week the regulator has filed an appeal. Judge Jacqueline Scott Corley set the expiration date of a temporary restraining order (TRO) preventing Microsoft from closing its deal to 11:59PM PT for Friday July 14th. This means the Ninth Circuit Court of Appeals has very little time to rule on the FTC’s appeal.
The FTC wants the Ninth Circuit Court to grant emergency relief to extend the temporary restraining order until when the appeals court can rule on the preliminary injunction decision. If granted, this will block Microsoft from closing its proposed Activision Blizzard acquisition until the court can make a full decision. If the Ninth Circuit Court doesn’t grant an extension before 11:59PM PT today then Microsoft is free to close the deal over the weekend or early next week.
But there’s still the matter of the UK.
The Competition and Markets Authority in the UK are now negotiating with Microsoft. Both the CMA and Microsoft have agreed to pause their legal battles to figure out how the transaction might be modified in order to address the CMA’s cloud gaming concerns. The CMA blocked Microsoft’s deal earlier this year, citing competition fears in the emerging cloud gaming market.
The CMA has just issued a notice of extension for its overall investigation into the deal, moving the date for final undertakings or a final order from July 18th to August 29th. The extension comes hours after Bloomberg reported that Microsoft is considering selling UK cloud-gaming rights to a telecommunications, gaming, or internet company to allow the Activision deal to close with the CMA.
The extension could mean Microsoft and the CMA aren’t quite ready to make a final deal in time for the July 18th deal deadline. The CMA also warned this week that Microsoft’s proposals may “lead to a new merger investigation” and that discussions with Microsoft were at an early stage.
All eyes are now on the Ninth Circuit Court and the situation with the CMA in the UK.
- The CMA extends its final order date.
The Competition and Markets Authority in the UK has just issued a notice of extension in its investigation of Microsoft’s proposed acquisition of Activision Blizzard. The CMA was due to accept final undertakings or make a final order by July 18th, but thanks to fresh negotiations with Microsoft it has now extended that by six weeks to August 29th. “However, the Inquiry Group aims to discharge its duty as soon as possible and in advance of this date,” says CMA group chair Martin Coleman.
The extension comes hours after Bloomberg reported that Microsoft is considering selling UK cloud-gaming rights to a telecommunications, gaming, or internet company to allow the Activision deal to close with the CMA. The UK regulator originally blocked the deal in April over cloud gaming concerns.
Jul 14MicroActiBlizz might divest the UK streaming rights to its games to appease regulators.
Bloomberg says Microsoft and Activision Blizzard are only “considering giving up” those UK rights, but I suspect it might genuinely work if they do.
The CMA’s primary remaining objection to the $68.7 billion deal was a fear that Microsoft would make Activision games exclusive to its own cloud gaming service. (There’s a bit more to it, but still.) If Microsoft permanently removed its own ability to do so...
The Federal Trade Commission (FTC) is appealing a recent US federal court order that cleared the way for Microsoft to purchase Activision Blizzard. The FTC filed its opposition to Judge Jacqueline Scott Corley’s decision, asking for the deal to be paused once more, this time by the Ninth Circuit Court of Appeals.Read Article >
Microsoft won a grueling fight with the FTC earlier this week, with a federal judge denying a preliminary injunction request from the US regulator. “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,” Judge Corley wrote in the ruling. “To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content.”
Microsoft just won a big legal fight with the Federal Trade Commission (FTC) to allow it to close its $68.7 billion Activision Blizzard acquisition. After a grueling five days of evidence and testimony, a US federal judge has sided with Microsoft to prevent the FTC from securing a preliminary injunction to halt Microsoft from buying Activision Blizzard.Read Article >
The hearing involved key Xbox executives, including Microsoft Gaming CEO Phil Spencer. The Xbox chief has written to Microsoft employees about today’s FTC result, noting that the company’s focus is now on resolving the situation with the UK’s Competition and Markets Authority (CMA). Both Microsoft and the CMA have agreed to pause their legal battle to negotiate a potential remedy after the CMA initially blocked the deal over cloud gaming concerns earlier this year. Here’s Phil Spencer’s memo in full:
Microsoft and the UK’s Competition and Markets Authority (CMA) have both agreed to pause their legal battle over the proposed Activision Blizzard acquisition in order to further negotiate. Microsoft has just won a separate ruling with a US federal court against the Federal Trade Commission (FTC), and the CMA is the last regulator preventing the Xbox maker from completing its $68.7 billion Activision Blizzard deal.Read Article >
The UK regulator moved to block Microsoft’s proposed acquisition in April, and Microsoft was due to appeal that decision with a hearing set to start on July 28th. Microsoft has now agreed with the CMA to pause its appeal process to look at how the transaction could be modified to address the CMA’s cloud gaming concerns.
A California judge is allowing Microsoft to close its acquisition of Activision Blizzard after five days of grueling testimony. Microsoft still faces an ongoing antitrust case by the Federal Trade Commission, but Judge Jacqueline Scott Corley has listened to arguments from both the FTC and Microsoft and decided to deny the regulator’s request for a preliminary injunction.Read Article >
In a ruling submitted today, Judge Corley said the following:
Microsoft thinks we’re getting a PS5 Slim model later this year that might be priced at $399.99. The software giant is currently waiting a ruling in the FTC v. Microsoft hearing and as part of the case Microsoft has filed documents which reveal it thinks a PS5 Slim is on the way “later this year.” Here’s exactly what Microsoft says:Read Article >
Insider Gaming reported last year that Sony was preparing for a PS5 with a detachable disc drive for September 2023. The console is rumored to be sold on its own without the disc drive or in a bundle, which suggests Sony could be considering making the slimmer version of the PS5 the default. This would allow people to pick with or without a bundled drive, with the option to add a drive later on if needed. Currently you have to either buy a $399 PS5 Digital Edition or the $499 PS5 with a disc drive, but there’s no option to connect an optional drive at a later date.
The final day of FTC v. Microsoft gave us key closing arguments from both parties and a chance to reflect on this giant hearing. Judge Jacqueline Scott Corley took the opportunity to reflect, too: would she even be sitting here, she mused, if Sony had signed a Call of Duty deal with Microsoft?Read Article >
That’s a good point, and it was part of a series of tough questions Judge Corley had for the FTC. The grilling centered on why consumers would be harmed if Microsoft acquired Activision Blizzard and particularly on how many PlayStation players would switch to Xbox if Activision’s key game actually disappeared. The FTC has relied largely on Sony, the market leader in consoles, to back up its theory of harm to competition if Microsoft were to make Call of Duty exclusive to Xbox or sabotage the PlayStation version. It’s a theory that has already been rejected by most regulators worldwide, including the European Commission and even the Competition and Markets Authority (CMA) in the UK.
- It’s over.
Judge Corley has wrapped up the closing statements and the hearing is finished. Judge Corley will now look over the submitted arguments, evidence, and testimony and make her decision in the coming days.
The order will be filed under seal, so the public won’t find out immediately but I’m sure the FTC and Microsoft will be keen to let the world know the instant this order is passed down.
Normally I’d say we’ll be back tomorrow at 8:30AM PT, but not this time. I’ll take the advice of someone we overheard in the courtroom moments ago: “get some sleep.”
Thanks for joining and stay tuned to The Verge for Judge Corley’s order as soon as we get it.