SAN FRANCISCO — Activision Blizzard CEO Bobby Kotick was in court Wednesday defending Microsoft’s proposed $69 billion takeover of his video game company against an attempt by federal regulators to block the deal.
Kotick told a federal judge in San Francisco Wednesday that there’s no incentive to deprive Microsoft gaming rivals like Sony of the popular Activision game Call of Duty. Kotick said it’s not in his company’s interest to make the game exclusive to Microsoft’s Xbox console or to offer subpar versions on other systems, like Sony’s Playstation.
“If we were to remove Call of Duty from Playstation, it would cause serious reputational damage to the company,” Kotick said. He added that making a subpar version for PlayStation would cause “vitriol from gamers” and is not something Activision developers would do.
Kotick’s remarks were meant to undercut a key claim by antitrust enforcers at the U.S. Federal Trade Commission, who argue that the acquisition will harm competition in the video game industry.
Kotick testified before U.S. District Judge Jacqueline Scott Corley on the fourth day of a court hearing in San Francisco. The proceedings are likely to make or break what would be the most expensive acquisition in technology history. Microsoft CEO Satya Nadella was also scheduled to take the stand Wednesday.
Kotick said it’s important for the deal to go through, noting that 98% of Activision Blizzard shareholders voted for the transaction.
The hearing represents a major test of the FTC’s amped-up oversight of Big Tech under Chairperson Lina Khan, who has been outspoken about her belief that U.S. regulators were too lenient in past deals that helped increase the power of companies such as Amazon, Google and Facebook. The courtroom tussle with Microsoft comes six months after the FTC took Facebook owner Meta Platforms to court in Silicon Valley to try to stop a takeover of a virtual reality fitness company only to be rebuffed by the judge in that case.
Microsoft has hailed the deal with Activision Blizzard as a way to make popular Activision games such as Call of Duty more widely available.
The U.S. Federal Trade Commission is trying to persuade Corley to issue an order stopping the takeover from being consummated before a more extensive administrative trial begins Aug. 2 in Washington. Microsoft is fighting to close the deal ahead of a July 18 deadline that could trigger it having to pay a $3 billion breakup fee to Activision.
Microsoft struck the deal 17 months ago in hopes of expanding its video game imprint beyond Xbox, which has about half the market share of the longtime industry leader Sony and its PlayStation device.