The clock is ticking on gaming’s biggest acquisition | The DeanBeat

In the antitrust case against Microsoft’s $68.7 billion acquisition, there are jokesters who are wondering which side the Federal Trade Commission is really on.

The FTC sued to stop the merger and the judge in the case — U.S. District Court judge Jacqueline Scott Corley — ruled in Microsoft’s favor on Tuesday. The judge wondered if the FTC was really arguing that Microsoft’s acquisition was unfair to Sony, and she urged the FTC’s lawyers to focus on the potential harm to consumers. After all, consumers are the ones that antitrust law protects.

Meanwhile, you have to wonder if Activision Blizzard CEO Bobby Kotick is secretly hoping that the FTC succeeds in delaying the merger past its closing date on July 18. If so, Activision Blizzard gets a $3 billion deal breakup fee from Microsoft. But I don’t think that’s what Kotick wants, as he stands to personally gain a lot of money if the deal goes through. And if the deal is delayed, there is no guarantee that the two parties will be able to come to an agreement again on things like the price.

I suppose the teams on both sides of the deal will just make sure the deal closes anyway, to avoid the risk of reopening negotiations, and regardless of the ultimate decision in the antitrust case.

In the meantime, the judge noted that the FTC got a lot of what it wanted when Microsoft preemptively committed to letting PlayStation keep Call of Duty for 10 years on the platform and also cut similar deals with Nintendo and cloud gaming partners too.

Nasdaq is betting on the merger finishing. On Friday, it said it was removing Activision Blizzard from Nasdaq indices ahead of the Microsoft closing. The company will be replaced by another one when markets open on July 17. Nasdaq believes the event is “highly probable” and it could have an adverse effect on the integrity of the index.

The United Kingdom’s Competition and Markets Authority also wanted to block the merger with a filing in April. An appeal hearing is set for July 28, but with the U.S. ruling, Microsoft and the CMA have agreed to pause its appeal process to find solutions that address the CMA’s concerns that Microsoft might monopolize the nascent cloud gaming market. I don’t see much teeth there at all, as the cloud gaming market is a tiny percentage of the overall gaming industry’s estimated $200 billion in revenues this year (Newzoo).

Microsoft keeps saying that 38 countries have already approved the deal, with the U.S. and the U.K. as the lone holdouts. The FTC is appealing its case to the appeals court, but the decision by the judge could make that an uphill battle. This last-ditch effort shows the FTC’s chair, Lina Kahn, won’t go down without a fight. But it seems like it’s a lost cause.

The Ripple case

In the meantime, blockchain game companies are very interested in the fallout from another defeat for U.S. regulators. A U.S. judge ruled on Thursday that Ripple Labs did not violate federal securities law when it sold its XRP cryptocurrency token to the general public.

XRP is the native token of Ripple, founded in 2011. The Securities and Exchange Commission sued in December 2020, saying Ripple’s distribution of $1.3 billion worth of XRP violated securities law. valuation

The ruling by U.S. District Judge Analisa Torres amounted to the first victory for a cryptocurrency company in a case brought by the SEC. The judge held that Ripple was not allowed to sell XRP to institutional investors with regulatory compliance, but the judge gave Ripple a victory by saying XRP was not classified as a security when sold to individual investors.

Add this to Google Play’s announcement this week that Web3 games can debut on the Google Play store so long as they didn’t have gambling features. And you’ll see that the seemingly cursed blockchain gaming market has had some big obstacles removed.

Crypto companies disputed the SEC when it said that crypto tokens are securities subject to investor protection rules. The agency had sued more than 100 companies that had launch such tokens. But now the strengthening crypto markets are rallying on the news. If enough the regulatory hurdles get cleared, then more big gaming companies are likely to move into the market. I talked to one gleeful crypto entrepreneur yesterday about this, and she saw it as a huge win.