Activision CEO on Microsoft’s $68.7 billion deal: Regulators don’t have experience

Activision Blizzard CEO Bobby Kotick on Tuesday discussed Microsoft’s proposed acquisition of the company and regulatory scrutiny of it. 

Kotick pushed back on concerns Microsoft could make Activision Blizzard’s most popular games only available on Xbox, something he called “not a fair concern at all.”  

He did so while appearing Tuesday on “The Claman Countdown.”

Robert Kotick, president and chief executive officer of Activision Blizzard Inc., speaks during an interview in New York Nov. 10, 2008.  (Daniel Acker/Bloomberg via Getty Images / Getty Images)

“I think what we’re experiencing right now are regulators who have very little experience with our industry,” he told host Liz Claman. “There’s probably a lot of consolidation that could happen over time, but it’s an extremely fragmented industry, and today the dominant players are Japanese and Chinese companies.”

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The Activision Blizzard CEO said he thought that as regulators are “starting to learn about the industry, they’re realizing that that’s an unfounded concern.”

“I mean, you start with what even is ‘Call of Duty?’ It’s a military simulation that’s based on, you know, military experiences through the course of history,” Kotick said. “There is nothing proprietary about that as an idea.”

He went on to reiterate he thinks “there’s an enormous amount of competition” in the industry, and regulators will “think about this transaction differently” when they “start to understand that.”

The Microsoft and Activision Blizzard logos are seen in this Jan. 18, 2022 illustration.  (REUTERS/Dado Ruvic/Illustration / Reuters)

Microsoft’s acquisition of Activision Blizzard was unveiled back in January 2022. The deal, which is expected to be all-cash and is valued at $68.7 billion, has faced government scrutiny, including from U.S., U.K. and European Union regulators. 

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In an effort to block the deal, the U.S. Federal Trade Commission on Dec. 8 filed a lawsuit. The regulator alleged the acquisition would “enable Microsoft to suppress competitors on its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.” The companies have pushed back on claims it would negatively affect competition.

Microsoft has vowed to make “Call of Duty” available on Nintendo in a 10-year agreement. The company is willing to negotiate with competitor Sony for the same conditions, according to Reuters.

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Activision Blizzard said Tuesday in its earnings release that it and Microsoft are “continuing to engage with regulators reviewing the transaction and are working toward closing it in Microsoft’s fiscal year ending June 30, 2023, subject to obtaining required regulatory approvals and satisfaction of other customary closing conditions.”

Robert “Bobby” Kotick, chief executive officer of Activision Blizzard Inc., smiles during the annual Milken Institute Global Conference in Beverly Hills, Calif., May 2, 2016.  (Patrick T. Fallon/Bloomberg via Getty Images / Getty Images)

The company generated $2.33 billion in net revenues during the fourth quarter, a nearly 8% increase from the $2.16 billion reported in the same three-month period the prior year. Its net income, meanwhile, narrowed to $403 million from $564 million.

Activision Blizzard shares were trading at $75.60 Tuesday, up about 5.6% from the start of the day. 

Phillip Nieto contributed to this report.