On Thursday, Microsoft (NASDAQ: MSFT) filed its response to the Federal Trade Commission’s (FTC) lawsuit regarding the blocking of its $68.7 billion acquisition of Activision Blizzard (ATVI).
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The tech giant stated in its response, “The acquisition of a single game by the third-place console manufacturer cannot upend a highly competitive industry. That is particularly so when the manufacturer has made clear it will not withhold the game. The fact that Xbox’s dominant competitor has thus far refused to accept Xbox’s proposal does not justify blocking a transaction that will benefit consumers.”
Microsoft also commented that its Xbox gaming division continues to remain in third place behind Nintendo and Sony even after 20 years since venturing into the gaming business.
With the ATVI acquisition, MSFT hopes to strengthen its presence in mobile gaming as 75% of ATVI’s gamers and around 33% of its revenues come from its mobile offerings.
MSFT believes that with this acquisition, it needs to “make Activision’s limited portfolio of popular games [including Call of Duty] more accessible to consumers, by putting them on more platforms and making them more affordable.”
This has been the biggest pushback from the government that MSFT has seen to one of its acquisitions. Earlier this month, the FTC sued to block MSFT’s acquisition of ATVI stating that this acquisition “would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.”
Analysts are bullish about MSFT stock with a Strong Buy consensus rating based on 25 Buys and two Holds.
