The FTC’s case against Microsoft could quickly turn into Xbox vs. PlayStation

theverge.com:

Microsoft’s key Xbox executives will defend the company’s $68.7 billion proposed acquisition of Activision Blizzard against the Federal Trade Commission (FTC) today in federal court. The result, expected by the first week of July, will likely determine whether this giant gaming deal goes ahead. Microsoft is battling a key US regulator here, but the real war is shaping up to be between Microsoft and Sony.

In five days of hearings this week and next, the FTC is seeking an injunction to block the merger while its own administrative case plays out over the coming months. If the FTC is successful, Microsoft has said it might walk away from the deal altogether. The stakes are extremely high.

Sony has emerged as one of the only companies opposing Microsoft’s deal, offering up documents, depositions, and much more to the FTC, European Commission, and the UK’s Competition and Markets Authority (CMA). Microsoft and Sony have already been arguing behind the scenes in filings to these regulators, and it increasingly feels like that tension will spill over into open court this week.

Microsoft announced it was acquiring Activision Blizzard last year, and it’s been sparring with regulators ever since. Now, it’s entering a particularly crucial phase. If the FTC’s request for a preliminary injunction is granted, it would prevent Microsoft from finalizing its acquisition until it hears the results of a separate lawsuit that the FTC filed under its administrative process in December. An evidentiary hearing for that case is scheduled for August 2nd.

If the FTC fails to get this injunction, Microsoft will likely have already closed the deal by then — and the FTC will face an uphill battle to unwind the merger and may simply walk away.