What you need to know
- Microsoft is aiming to acquire Activision Blizzard for $69 billion.
- The Federal Trade Commission hopes to secure a preliminary injunction that would temporarily prevent Microsoft from closing the deal.
- In its proposing finding of facts Microsoft claims Xbox has never stopped "losing the console wars."
The courtroom showdown between the FTC and Microsoft over the tech company's proposed acquisition of Activision Blizzard kicked off this morning. First announced in early 2022, the pending transaction has been scrutinized by various global regulatory bodies. Xbox has frantically worked to appease their concerns. While addressing its potentially dominant position, Microsoft lamented its third-place position and admitted defeat in the ongoing "console wars."
Part of Microsoft's current legal strategy is demonstrating the domineering lead PlayStation and Nintendo have established in the gaming industry. Xbox entered the market in 2001, and according to Microsoft's own documentation, their consoles have been outperformed by Nintendo and Sony by a "significant margin." Despite hard-fought success in the Xbox 360 generation and notable financial gain in recent quarters, Xbox claims it's never stopped "losing the console wars."
As it stands, Xbox is confidently one of "big three" players in the console market, alongside PlayStation and Nintendo. However, Microsoft states its market share is trailing notably behind the most prominent competition.
"Xbox's console has consistently ranked third (of three) behind PlayStation and Nintendo in sales. In 2021, Xbox had a share of 16%, while Nintendo and PlayStation had shares of [redacted] and [redacted], respectively. Likewise for console revenues and share of consoles currently in use by gamers ('installed base'), Xbox trails with 21% while PlayStation and Nintendo have shares of [redacted] and [redacted], respectively."
Windows Central's take
On the surface, it might sound shocking to hear a tech powerhouse like Microsoft confess its shortcomings. The company has aggressively invested in the Xbox brand over the last several decades, and recent endeavors display confident prospects for the gaming division. Legacy audiences and pundits will undoubtedly place substantial weight on Xbox's deficient console performance and their standing in the "console wars," but hardware is only a tiny slice of Xbox's big-picture plans.
Xbox Game Pass, Xbox Cloud Gaming, and Xbox Play Anywhere have become essential pillars of the brand in recent years. Phil Spencer acknowledged the importance of the console audience in an interview with the Kinda Funny Xcast while also maintaining that the future of Xbox needs to reach beyond the box. So, when it comes to appeasing regulatory concerns, it's in Microsoft's best interest to present data that exhibits its financial standing in an unfavorable light.
With quotes, comments, and revelations pouring in from courtroom documents and industry leaders, it's safe to say the FTC v Microsoft saga will deliver ample conversation-worthy headlines. Be sure to keep your eyes locked on Windows Central for more breaking coverage.
