In the context of the takeover of Activision Blizzard King, Microsoft has multiplied its interventions to try to convince the regulatory authorities to approve the agreement. And among them, agreements to bring the famous Call of Duty license to more media.
The agreement between Nintendo and Xbox intrigues the FTC
Microsoft has long made it known that a deal with PlayStation is possible, if Sony wants it, to secure the release of upcoming Call of Duty games on its platform. Sony always refused, but Microsoft did not wait for the Japanese and continued to work with other players.
Last December, Microsoft announced an agreement with Nintendo to bring Call of Duty to the brand’s consoles. The same agreement was then signed with NVIDIA, an English operator, Boosteroid or even Ubitus recently. Enough to show regulators that the takeover aims to extend the scope of Activision games, and not restrict it, as Sony fears.
And it is the agreement between Microsoft and Nintendo that intrigues the FTC. The US antitrust authority is the only jurisdiction to have publicly blocked the takeover, and would like to understand what is behind the two companies’ deal announced in December.
The FTC then asked Nintendo to come and explain, but the latter refused to testify in the Microsoft-Activision merger case, asking the FTC judge to reject a subpoena.
The FTC had subpoenaed Steve Singer, Nintendo of America’s vice president for publisher and developer relations, to testify for several hours before the FTC’s Complaints Board. Nintendo of America’s legal counsel then filed a motion to quash the subpoena, deemed “inappropriate”.
The document published by the FTC also shows that there is a procedural disagreement between the American body and Nintendo. Indeed, the FTC accuses Nintendo of being late on this subpoena. But Nintendo argues that the deal wasn’t actually signed until February 10, 2023, an argument the FTC denies given that the communication between the two companies took place in early December.
Nintendo also claims that the FTC had until March 3 to send Nintendo the subpoena, but that this procedure was done at the end of March. Nintendo argues that if Steve Singer’s testimony was so important to the FTC, the latter could have held Nintendo to account much earlier and as early as December. It is therefore for this failure to meet the deadlines that Nintendo is asking the FTC to cancel the subpoena.
Since the start of the case, the FTC has instead dismissed Nintendo from the competitive landscape that surrounds Microsoft, judging that Nintendo consoles were not part of the “high performance console market”. It is interesting to note here that the American organization is finally interested in the Nintendo market, even if it is unclear whether the contours of the agreement between Microsoft and Nintendo could work in its favor, or on the contrary give more arguments to the FTC to block the deal.
The next big deadline for Microsoft is Activision is expected this week since the verdict of the CMA, the British antitrust authority, is expected on April 26, 2023 at the latest. That of the European Commission should arrive by May 22 and you can always find our complete file on the subject with the expected schedule.
