SAN FRANCISCO, June 27 – Harvard economist Robin Lee, who was arguing on behalf of the government on Tuesday in its legal fight against Microsoft’s (MSFT.O) $69 billion bid to purchase game producer Activision Blizzard (ATVI.O), had difficulty at times clearly demonstrating how the planned transaction would damage players.
The Federal Trade Commission of the United States has requested a federal judge to temporarily halt the transaction in order to give the agency’s internal judge time to assess whether or not it is allowed to move forward. Having said that, the side that loses in federal court often concedes, and the internal process is halted as a result.
An attorney representing Microsoft questioned Lee regarding the specifics of his estimates of prospective market share increases for the Redmond, Washington-based company’s Xbox division. In particular, the attorney wanted to know how his findings would affect players who might switch consoles as a result of the phenomenal success of the “Call of Duty” videogame, which is developed by Activision.
Lee admitted that his assessments did not take into consideration anything other than the complete exclusivity of “Call of Duty” on Xbox, and they did not demonstrate what may take place if the game was also made available on Nintendo Switch (7974.T). Should the transaction be finalized, Microsoft has committed to supplying the game on Switch for a period of ten years.
Beth Wilkinson, an attorney for Microsoft, put pressure on Lee in an effort to find flaws in his evaluation of the transaction by drawing attention to the constraints of his economic modeling. The line of inquiry got a little testy at times, such when Wilkinson said, “Professor Lee, can you answer my question?” about a specific aspect of his findings.
Wilkinson at one point laid out his market share estimates on a white board that was accessible to the court. He appeared to be growing increasingly upset with the difficulties of deciphering Lee’s responses.
On Tuesday, court Jacqueline Scott Corley, a federal court in San Francisco who will be responsible for making a decision in the case, did not make many statements.
According to the Federal Trade Commission, the acquisition would provide Microsoft with exclusive access to Activision titles, thereby cutting off competition from Nintendo and Sony Group.
Microsoft has maintained that it would be in a better financial position if it were to license the games to anybody who wanted them.
The transaction has been given the green light by a number of different authorities, but it has been met with opposition from the Federal Trade Commission in the United States and the Competition and Markets Authority in Britain.