FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 1 of 37 * PUBLIC *; 

PUBLIC 

UNITED STATES OF AMERICA 

FEDERAL TRADE COMMISSION 

OFFICE OF ADMINISTRATIVE LAW JUDGES 

In the Matter of 

Microsoft Corp. 

a corporation; 

Docket No. 9412 

and 

Activision Blizzard, Inc. 

a corporation. 

AMENDED ANSWER AND DEFENSES 

OF RESPONDENT MICROSOFT CORP. 

Pursuant to Rule 3.12 of the Federal Trade Commission’s (“FTC” or the “Commission”) 

Rules of Practice for Adjudicative Proceedings (the “Rules”), Respondent Microsoft Corp. 

(“Microsoft”), by and through its undersigned counsel, hereby files the following answer to the 

Commission’s Administrative Complaint (the “Complaint”) against Microsoft. 

INTRODUCTION 

This case involves a transaction between the third-place manufacturer of gaming consoles 

and one of many publishers of popular video games. Microsoft competes in gaming through its 

Xbox division (“Xbox”). Xbox started behind Nintendo and Sony when it began making consoles 

20 years ago, and it remains in third place today. Xbox also has next to no presence in mobile 

gaming, the fastest-growing segment of gaming and the place where 94% of gamers spend their 

time today. And Xbox and Respondent Activision Blizzard King (“Activision”) are just two of 

hundreds of game publishers, who compete by providing different types of games on different 

1 
 

 

 

 

 

 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 2 of 37 * PUBLIC *; 

PUBLIC 

platforms at different prices, ranging all the way down to $0. 

Microsoft is buying Activision to try to become more competitive in this expanding global 

industry. Its vision for the transaction is simple: Xbox wants to grow its presence in mobile 

gaming, and three quarters of Activision’s gamers and more than a third of its revenues come from 

mobile offerings. Xbox also believes it is good business to make Activision’s limited portfolio of 

popular games more accessible to consumers, by putting them on more platforms and making them 

more affordable. That includes making Call of Duty, one of Activision’s most popular games, 

more broadly available. Microsoft made this public pledge on the day the deal was announced. 

Since then, Xbox has agreed to provide the game to Nintendo (which does not currently have it) 

and has offered to Sony . 

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. Giving 

consumers high-quality content in more ways and at lower prices is what the antitrust laws are 

supposed to promote, not prevent. 

* * * 

Gaming is the biggest and fastest-growing entertainment industry in the world. Not too 

long ago, people primarily played video games in arcades, or purchased cartridges or discs to play 

on game consoles in their homes. The industry looks very different today. Gaming is now more 

popular than television, books, music, or movies. The industry generates hundreds of billions of 

dollars of revenue a year, and is projected to grow substantially in the future. 

The choices available to gamers today are growing. Gamers play not just on consoles, but 

2 
 

 

 

 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 3 of 37 * PUBLIC *; 

PUBLIC 

also on PCs, mobile devices, and even directly on some televisions. Game developers are churning 

out an ever-increasing variety of games, ranging from role-play in complex fantasy worlds to 

sports simulations to simple puzzles. Hits come out of nowhere, providing consumers with choices 

beyond the iconic and treasured games they grew up playing. Indeed, while franchises like 

Activision’s Call of Duty and Electronic Arts’ FIFA have been popular for a long time, so too are 

games like Minecraft, Splitgate, Player Unknown: Battlegrounds, Clash of Clans, and Among Us, 

which burst onto the scene and achieved great success despite being developed by smaller studios. 

Gamers also pay for games in different ways. They can buy individual games—today, 

primarily by downloading them, rather than purchasing cartridges or discs. They can subscribe to 

services that offer the ability to play a variety of games for a monthly fee. And they can turn to 

free-to-play games, which may be funded by in-game advertising and in-game purchases (for 

example, of additional levels or of additional characters). 

A few companies, primarily located abroad, exercise outsize influence in this industry. 

Xbox is not one of them. Xbox’s console lags well behind Sony’s and Nintendo’s. While Xbox 

publishes games for consoles and PCs, it has far fewer popular exclusive games than Sony and 

Nintendo. And Xbox has almost no presence in mobile gaming, which is the largest and fastestgrowing segment of gaming. 

3 
 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 4 of 37 * PUBLIC *; 

PUBLIC 

Microsoft is buying Activision to meet the billions of gamers who choose to play on mobile 

devices instead of a console or PC, and to learn how to make games that appeal to and engage 

them. Xbox also wants to make Activision’s non-mobile games more broadly available. One way 

is by continuing to distribute Activision’s games everywhere they currently exist and expanding 

to additional platforms like Nintendo. Another is by adding new Activision console and PC games 

4 
 

 

 

 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 5 of 37 * PUBLIC *; 

PUBLIC 

to Xbox’s Game Pass subscription service on the day those new games are released, creating new 

ways to access those games. Activision has never before put its new games immediately in 

subscription. 

Maintaining broad availability of Activision games is both good business and good for 

gamers. A substantial portion of Activision’s financial value to Xbox comes from business as 

usual, including the continued sale of Call of Duty—its most popular game—on Sony 

PlayStation. Paying $68.7 billion for Activision makes no financial sense if that revenue stream 

goes away. Nor would it make sense to degrade the game experience and alienate the millions of 

Call of Duty players who play together using different types of consoles. The reputational hit to 

Xbox would not be worth any theoretical economic benefit from taking Call of Duty away from 

competitors. 

It is therefore unsurprising that after nearly a full year investigating this transaction, 

receiving millions of Microsoft and Activision documents, and speaking to over a dozen witnesses, 

there is no evidence that Xbox intends to take Call of Duty away from PlayStation—or any 

platform at all. No emails, no text messages, no testimony. There is one reason for that: Xbox 

does not intend to take that step. Xbox has some exclusive games, which are a necessary feature 

of any content business. But Xbox cannot afford to take Activision’s games exclusive without 

undercutting the basic economics of the transaction. That is why Microsoft has offered to keep 

Call of Duty on PlayStation from the moment this deal was announced. Xbox’s proposal 

 and would extend for ten years— 

an unheard-of length for contracts in the gaming industry. 

Xbox has made this same offer to other competitors, and at least one (Nintendo) has 

accepted to date. Sony refuses to deal. But a vertical merger causes anticompetitive harm only 

5 
 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 6 of 37 * PUBLIC *; 

PUBLIC 

when the acquired input is “essential.” If Call of Duty were truly essential, Sony would have no 

reason to refuse . 

The Complaint’s reference to Microsoft’s recent acquisition of ZeniMax—a set of gaming 

studios acquired in 2020—has no relevance to the current transaction. After that transaction 

closed, ZeniMax’s first two new games were made exclusive to PlayStation for one year postall of which are designed to be played primarily alone or in small groups—will be exclusive to 

Xbox and PCs. But consistent with its historic approach, Xbox has continued to release new 

updates of existing ZeniMax games such as Fallout 76 and Elder Scrolls Online on both Xbox and 

PlayStation, because these games are designed to be played together by broad communities of 

gamers on different platforms. This last set of games is the one most analogous to Call of Duty. 

So the ZeniMax experience cuts against the idea that Xbox would make that game exclusive. And 

it is not just the ZeniMax games where Xbox has taken this approach; Xbox has also expanded 

(not contracted) access to Minecraft, a similar multiplayer game with a large existing community 

of gamers who play together from different platforms, since it was acquired. If there were any 

remaining doubt, Xbox’s offer to put Call of Duty on other platforms on commercially favorable 

terms for those platforms should eliminate it. 

Any suggestion that Microsoft’s statements to the European Commission about ZeniMax 

were misleading is incorrect. Microsoft explicitly said it would honor Sony’s existing exclusivity 

rights and approach exclusivity for future game titles on a case-by-case basis, which is exactly 

what it has done. The European Commission agrees it was not misled, stating publicly the day 

after the Complaint that Microsoft did not make any “commitments” to the European Commission, 

launch. Xbox anticipates that three future titles— 

nor did the European Commission “rely on any statements made by Microsoft about the future 

6 
 

 

 

 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 7 of 37 * PUBLIC *; 

PUBLIC 

distribution strategy concerning ZeniMax’s games.” Instead, the European Commission cleared 

the transaction “unconditionally as it concluded that the transaction would not raise competition 

concerns.” 

Lastly, the gaming subscription service and cloud gaming service Xbox offers are not 

different products. The services allow consumers to access games in different ways, whether by 

paying a low monthly price for a broad catalog of games or playing a game on a variety of devices 

without first downloading it. But the games themselves are identical. Xbox believes these 

alternative payment and distribution models may have promise in the future. But consumers will 

ultimately decide whether Xbox is correct. If they agree with Xbox’s vision, that will simply 

prompt more competition, including from companies like Sony, which already has a successful 

subscription service without even including its most popular (and exclusive) games on the day 

they are released. Sony may prefer to protect the revenues it gets from more expensive individual 

game sales, but the antitrust laws do not serve to insulate the dominant market player and its 

favored business model from competition. 

Ultimately, the Commission cannot meet its burden of showing that the transaction would 

leave consumers worse off, because the transaction will allow consumers to play Activision’s 

games on new platforms and access them in new and more affordable ways. The relief sought in 

the Complaint should be denied. 

GENERAL RESPONSES TO THE COMMISSION’S ALLEGATIONS 

Except to the extent specifically stated herein, Microsoft denies each and every allegation 

contained in the Complaint. Use of headings and subheadings from the Complaint is solely for 

the benefit of the reader. Microsoft does not interpret the headings and subheading throughout 

7 
 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 8 of 37 * PUBLIC *; 

PUBLIC 

the Complaint as well-pleaded allegations to which any response is required. To the extent such 

a response is required, Microsoft denies all allegations in the headings and subheadings of the 

Complaint. The Commission’s unnumbered introductory paragraph characterizes this action and 

asserts legal arguments and conclusions to which no response is required. To the extent such a 

response is required, Microsoft denies the allegations in the Commission’s unnumbered 

introductory paragraph. Use of certain terms or phrases defined in the Complaint is not an 

acknowledgement or admission of any characterization the Commission may ascribe to the 

defined terms. Unless otherwise defined, capitalized terms shall refer to the capitalized terms 

defined in the Complaint, but any such use is not an acknowledgement or admission of any 

characterization the Commission may ascribe to the capitalized terms. 

Microsoft does not concede the truthfulness of third-party articles and news sources 

quoted or referenced in the Complaint. To the extent a response is required, Microsoft denies 

all allegations of the third-party articles and news sources quoted in or referenced in the 

Complaint. Microsoft additionally denies that the Commission is entitled to any of the relief 

sought in the Notice of Contemplated Relief on page 23 of the Complaint. Microsoft reserves 

the right to amend and/or supplement this Answer at a later stage of the proceedings as permitted 

by the Rules. Each paragraph below corresponds to the same-numbered paragraph in the 

Complaint. 

SPECIFIC RESPONSES TO THE COMMISSION’S ALLEGATIONS 

I. NATURE OF THE CASE 

1. Paragraph 1 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies those 

8 
 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 9 of 37 * PUBLIC *; 

PUBLIC 

allegations. Microsoft admits that it seeks to acquire Activision for $68.7 billion; and that the 

acquisition would be the highest numerical dollar amount that Microsoft will have paid for an 

acquisition in its history. Microsoft avers that it lacks knowledge or information sufficient to 

form a belief as to the truth of the allegations concerning the relative size of this acquisition 

within the gaming industry. Microsoft denies the remaining allegations contained in 

Paragraph 1. 

2. Microsoft admits that its gaming division, Xbox, develops and sells video game 

consoles and video games (including the video game, Halo); that games created in-house are 

sometimes referred to as “first-party” titles; that Xbox offers a multigame subscription service, 

Xbox Game Pass, which provides subscribers with access to a catalog of hundreds of video 

games to play on console or PC; and that the Xbox Game Pass Ultimate tier offers “cloud 

gaming” functionality allowing subscribers to stream certain games for play across a variety of 

devices including consoles, PCs, tablets, and mobile phones. Microsoft denies the remaining 

allegations contained in Paragraph 2. 

3. Microsoft admits that Activision develops and publishes video games for 

multiple devices, including video game consoles, PCs, and mobile devices; that Activision’s 

games include high-quality games; and that the term “AAA” lacks a defined meaning in the 

industry. Microsoft denies the remaining allegations contained in Paragraph 3. 

4. Microsoft admits that Activision develops Diablo, Overwatch, and Call of Duty. 

Microsoft denies the remaining allegations contained in Paragraph 4. 

5. Microsoft admits that Overwatch 2 was released recently and made available for 

play on multiple gaming devices, including the Nintendo Switch and PCs; and that Diablo IV 

is slated for release in 2023. Microsoft avers that it lacks knowledge or information sufficient 

9 
 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 10 of 37 * PUBLIC *; 

PUBLIC 

to form a belief as to the truth of the allegations concerning the lifetime revenues of the Diablo 

and Overwatch game titles; or as to the truth of the allegations concerning when Diablo was 

first introduced and whether its upcoming release is highly anticipated. Microsoft denies the 

remaining allegations contained in Paragraph 5. 

6. To the extent the Complaint is quoting from documents, Microsoft respectfully 

refers the Court to the documents for an accurate and complete statement of their contents. 

Microsoft avers that it lacks knowledge or information sufficient to form a belief as to the truth 

of the allegations concerning industry perceptions of Call of Duty and Call of Duty’s original 

release date; or as to the truth of the allegations concerning Call of Duty’s launch and typical 

release schedule and the resources and budget Activision allocates to Call of Duty, including 

the number of studios that work on Call of Duty. Microsoft denies the remaining allegations 

contained in Paragraph 6. 

7. Microsoft avers that it lacks knowledge or information sufficient to form a belief 

as to the truth of allegations concerning Call of Duty’s revenues, sales, and monthly active 

users. To the extent the Complaint is referencing documents, Microsoft respectfully refers the 

Court to the documents for an accurate and complete statement of their contents. Microsoft 

denies the remaining allegations contained in Paragraph 7. 

8. Microsoft denies the allegations contained in Paragraph 8. 

9. Microsoft admits that it produces its own first-party video game titles; and that 

since 2018, it has acquired 8 companies, one of which operates multiple studios. Microsoft 

denies the remaining allegations contained in Paragraph 9. 

10. Paragraph 10 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies the 

10 
 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 11 of 37 * PUBLIC *; 

PUBLIC 

allegations contained in Paragraph 10. 

11. Microsoft denies the allegations contained in Paragraph 11. 

12. Microsoft admits that it acquired ZeniMax, the parent company of a game 

developer, in 2021; that following its acquisition of ZeniMax, all ZeniMax titles have been 

released on PlayStation, including two ZeniMax titles that were exclusive to PlayStation upon 

release as well as new updates of Elder Scrolls Online; and that some future ZeniMax games 

may be exclusive to Xbox and PC when they are initially released. Microsoft further avers that 

this approach is consistent with its representations to the European Commission (“EC”), as the 

EC has publicly stated. Microsoft denies the remaining allegations contained in Paragraph 12. 

13. Paragraph 13 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies those 

allegations. To the extent the Complaint is quoting from one or more unidentified sources, 

Microsoft respectfully refers the Court to any such source for an accurate and complete 

statement of its contents. Microsoft avers that it lacks knowledge or information sufficient to 

form a belief as to the truth of the allegations concerning Activision’s incentives and business 

strategy. Microsoft denies the remaining allegations contained in Paragraph 13. 

14. Paragraph 14 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies the 

allegations contained in Paragraph 14. 

II. JURISDICTION 

15. Paragraph 15 purports to state conclusions of law to which no response is 

required. 

11 
 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 12 of 37 * PUBLIC *; 

PUBLIC 

16. Paragraph 16 purports to state conclusions of law to which no response is 

required. 

17. Paragraph 17 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies the 

allegations contained in Paragraph 17. 

III. RESPONDENTS AND THE PROPOSED ACQUISITION 

18. Microsoft admits that it is a publicly traded company incorporated in Washington 

with headquarters in Redmond, Washington; that it sells software, services, and devices across 

the technology industry; that its gaming division, Xbox, produces specialized Xbox hardware 

and sells Xbox content and services; and that for fiscal year 2022, Microsoft’s gaming revenue 

was $16.23 billion and total revenue was $198.27 billion. Microsoft denies the remaining 

allegations contained in Paragraph 18. 

19. Microsoft admits that Activision is a publicly traded company, incorporated in 

the State of Delaware with headquarters in Santa Monica, California; and that Activision 

develops and publishes video games for consoles, PCs, and mobile devices. Microsoft avers 

that it lacks knowledge or information sufficient to form a belief as to the truth of the remaining 

allegations contained in Paragraph 19. 

20. Microsoft admits the allegations contained in Paragraph 20. 

IV. BACKGROUND 

21. Paragraph 21 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies those 

allegations. Microsoft denies the remaining allegations contained in Paragraph 21. 

12 
 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 13 of 37 * PUBLIC *; 

PUBLIC 

22. Microsoft admits that gaming is a part of the entertainment industry; that in 2020 

the gaming industry was worth $165 billion, with $85 billion coming from mobile gaming, $40 

billion coming from PC gaming, $33 billion coming from console gaming, and the remaining 

revenue coming from cloud, VR, handheld, and arcade gaming. Microsoft lacks knowledge or 

information sufficient to form a belief as to the truth of the allegations concerning the total 

revenues of the gaming industry in 2022. Microsoft denies the remaining allegations contained 

in Paragraph 22. 

23. Microsoft admits the allegations contained in Paragraph 23. 

24. Microsoft admits that video game content can be played on consoles, PCs, and 

mobile devices. Microsoft denies the remaining allegations contained in Paragraph 24. 

25. Microsoft admits that consumers purchase consoles for a variety of reasons. 

Microsoft denies the remaining allegations contained in Paragraph 25. 

26. Microsoft admits that the most popular gaming consoles include Sony’s 

PlayStation, Nintendo’s Switch, and Microsoft’s Xbox. Microsoft denies the remaining 

allegations contained in Paragraph 26. 

27. Microsoft admits that there has been vigorous competition in the gaming 

industry for decades, including competition among video game console makers. Microsoft 

avers that it lacks knowledge or information sufficient to form a belief as to the truth of the 

allegations concerning the views of unidentified industry participants. To the extent the 

Complaint is quoting from documents, Microsoft respectfully refers the Court to the documents 

for an accurate and complete statement of their contents. Microsoft denies the remaining 

allegations contained in Paragraph 27. 

28. Microsoft admits that Xbox, Sony, and Nintendo all currently offer competing 

13 
 

 

 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 14 of 37 * PUBLIC *; 

PUBLIC 

gaming consoles; that Xbox and Sony released their most recent consoles (the Xbox Series X|S 

and the PlayStation 5, respectively) in 2020; and that Nintendo released its most recent console 

(the Nintendo Switch) in 2017. Microsoft denies the remaining allegations contained in 

Paragraph 28. 

29. Microsoft admits that the Xbox Series X|S are two Xbox consoles offered by 

Microsoft; that the Xbox Series X is the faster, more powerful model; and that the Xbox Series 

S is a simpler and more affordable model. To the extent the Complaint is quoting from 

documents, Microsoft respectfully refers the Court to the documents for an accurate and 

complete statement of their contents. Microsoft denies the remaining allegations contained in 

Paragraph 29. 

30. Microsoft admits that it tracks the performance of its Xbox consoles relative to 

other gaming consoles on the market. To the extent the Complaint is quoting from documents, 

Microsoft respectfully refers the Court to the documents for an accurate and complete statement 

of their contents. Microsoft denies the remaining allegations contained in Paragraph 30. 

31. To the extent the Complaint is quoting from or characterizing statements made 

during an earnings call, Microsoft respectfully refers the Court to a transcript or recording of 

the call for an accurate and complete statement of its contents. Microsoft denies the remaining 

allegations contained in Paragraph 31. 

32. Microsoft admits that the Xbox Series S console is less expensive than the Xbox 

Series X console and the PlayStation 5 console. To the extent the Complaint is quoting from 

documents, Microsoft respectfully refers the Court to the documents for an accurate and 

complete statement of their contents. Microsoft denies the remaining allegations contained in 

Paragraph 32. 

14 
 

 

 

 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 15 of 37 * PUBLIC *; 

PUBLIC 

33. Microsoft admits that different consoles have different technical specifications, 

including varied graphical processing capabilities; that the Nintendo Switch console allows 

portable, handheld use; and that the Nintendo Switch console and Xbox Series S console are 

less expensive than the Xbox Series X console and the PlayStation 5 console. Microsoft denies 

the remaining allegations contained in Paragraph 33. 

34. Microsoft admits that gamers have purchased and continue to purchase games 

through a buy-to-play model, purchasing either physical or digital copies of individual games 

for play on gaming consoles, PCs, or other devices. Microsoft denies the remaining allegations 

contained in Paragraph 34. 

35. Microsoft admits that multigame subscription services generally allow gamers 

to access a catalog of games for a recurring fee. Microsoft also admits that it launched its own 

multigame subscription service, Xbox Game Pass, in 2017; and that other companies have also 

launched multigame subscription services in recent years. Microsoft further admits that Xbox 

Game Pass had 10 million subscribers in 2020 and 25 million subscribers in 2022. Microsoft 

denies the remaining allegations contained in Paragraph 35. 

36. Microsoft admits that Xbox Game Pass is a multigame subscription service that 

provides subscribers with access to a rotating catalog of hundreds of games. Microsoft further 

admits that there are three Game Pass offerings: a “Console” offering that allows subscribers 

to download-to-play a catalog of console games on Xbox; a “PC” offering that allows 

subscribers to download-to-play a catalog of PC games on PC; and an “Ultimate” version that 

provides additional features, including the ability to stream a selection of games from the cloud 

to various devices. Microsoft denies the remaining allegations contained in Paragraph 36. 

37. Microsoft admits that Sony offers a multigame subscription service known as 

15 
 

 

 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 16 of 37 * PUBLIC *; 

PUBLIC 

PlayStation Plus that, like Game Pass, offers multiple tiers of pricing, including a top tier that 

is reported to provide cloud streaming capabilities. Microsoft avers that it lacks knowledge or 

information sufficient to form a belief as to the truth of the allegations concerning the other 

features and game offerings available on PlayStation Plus, as well as the pricing of this 

subscription service. Microsoft denies the remaining allegations contained in Paragraph 37. 

38. Microsoft admits that EA Play and Ubisoft+ are other multigame subscription 

services. Microsoft avers that it lacks knowledge or information sufficient to form a belief as 

to the truth of the allegations concerning the game offerings of EA Play and Ubisoft+, as well 

as the pricing of these subscription services. Microsoft denies the remaining allegations 

contained in Paragraph 38. 

39. Microsoft admits that video games are typically downloaded to a device and 

played locally; and that at least since 2013, companies have also offered cloud gaming services 

that allow players to play games without downloading them locally, in limited circumstances, 

by streaming games to compatible devices via remote servers. Microsoft avers that it lacks 

knowledge or information sufficient to form a belief as to the truth of the allegations concerning 

the features available on cloud gaming services other than those offered by Xbox Cloud 

Gaming. Microsoft denies the remaining allegations contained in Paragraph 39. 

40. To the extent the Complaint is quoting or characterizing from one or more 

unidentified sources, Microsoft respectfully refers the Court to any such source for an accurate 

and complete statement of its contents. Microsoft admits that cloud gaming has the potential 

to broaden access to gaming by expanding the universe of devices that can play games. 

Microsoft avers that it lacks knowledge or information sufficient to form a belief as to the truth 

of the allegations concerning the features available on cloud gaming services other than those 

16 
 

 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 17 of 37 * PUBLIC *; 

PUBLIC 

offered by Xbox Cloud Gaming. Microsoft denies the remaining allegations contained in 

Paragraph 40. 

41. Microsoft admits that it launched cloud gaming as part of the Ultimate tier of its 

Game Pass subscription service in September 2020; and that more than 20 million gamers have 

used the service to stream games from the cloud. To the extent the Complaint is referencing 

documents, Microsoft respectfully refers the Court to the documents for an accurate and 

complete statement of their contents. Microsoft denies the remaining allegations contained in 

Paragraph 41. 

42. Microsoft admits that Amazon Luna, Nvidia GeForce NOW, and Google Stadia 

are other existing cloud gaming services; and that Alphabet Inc. has announced that it is 

discontinuing Google Stadia in January 2023. Microsoft avers that it lacks knowledge or 

information sufficient to form a belief as to the truth of the allegations concerning how these 

cloud gaming services price and host their services. Microsoft denies the remaining allegations 

contained in Paragraph 42. 

43. To the extent the Complaint is quoting from documents, Microsoft respectfully 

refers the Court to the documents for an accurate and complete statement of their contents. 

Microsoft avers that it lacks knowledge or information sufficient to form a belief as to the truth 

of the other allegations concerning unidentified industry participants. Microsoft denies the 

remaining allegations contained in Paragraph 43. 

44. To the extent the Complaint is quoting or characterizing testimony from an 

investigational hearing of a Microsoft witness, Microsoft respectfully refers the Court to the 

full testimony for an accurate and complete statement of its contents. To the extent the 

Complaint is quoting from documents, Microsoft respectfully refers the Court to the documents 

17 
 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 18 of 37 * PUBLIC *; 

PUBLIC 

for an accurate and complete statement of their contents. Microsoft denies the remaining 

allegations contained in Paragraph 44. 

45. Microsoft denies the allegations contained in Paragraph 45. 

46. Microsoft admits that Activision, Electronic Arts, Take-Two, and Ubisoft are 

sometimes referred to as the “Big 4”; and that they publish Call of Duty (Activision), FIFA 

(EA), Grand Theft Auto (Take-Two), and Assassin’s Creed (Ubisoft), respectively. Microsoft 

denies the remaining allegations contained in Paragraph 46. 

47. Microsoft admits that Epic Games makes Fortnite, a free-to-play game released 

in 2017 that is one of the most popular games in the United States and the world; and that 

Activision, Electronic Arts, Take-Two, Ubisoft, and Epic are sometimes referred to as the “Big 

4 + Epic.” Microsoft denies the remaining allegations contained in Paragraph 47. 

48. To the extent the Complaint is quoting from documents, Microsoft respectfully 

refers the Court to the documents for an accurate and complete statement of their contents. 

Microsoft denies the remaining allegations contained in Paragraph 48. 

49. Microsoft admits that Xbox produces the franchises Elder Scrolls, Halo, and 

Forza; and that Sony produces the franchises God of War, MLB The Show, and Spider-Man. 

Microsoft denies the remaining allegations contained in Paragraph 49. 

50. Microsoft admits that Halo Infinite was in production for years and cost 

approximately million to produce. Microsoft denies the remaining allegations contained 

in Paragraph 50. 

51. Microsoft admits that it wants a variety of content available on Xbox and Game 

Pass. To the extent the Complaint is quoting from documents, Microsoft respectfully refers the 

Court to the documents for an accurate and complete statement of their contents. Microsoft 

18 
 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 19 of 37 * PUBLIC *; 

PUBLIC 

denies the remaining allegations contained in Paragraph 51. 

52. Microsoft admits that it is valuable to have a variety of content available on Xbox 

and Game Pass. To the extent the Complaint is quoting or characterizing testimony from an 

investigational hearing of a Microsoft witness, Microsoft respectfully refers the Court to the 

full testimony for an accurate and complete statement of its contents. To the extent the 

Complaint is quoting from documents, Microsoft respectfully refers the Court to the documents 

for an accurate and complete statement of their contents. Microsoft denies the remaining 

allegations contained in Paragraph 52. 

53. Microsoft admits that gaming companies may make some titles exclusive to some 

platforms. To the extent the Complaint is referencing documents, Microsoft respectfully refers 

the Court to the documents for an accurate and complete statement of their contents. Microsoft 

denies the remaining allegations contained in Paragraph 53. 

54. Microsoft admits that it is valuable to have a variety of content available on Xbox 

and Game Pass; and that the size of a platform’s player base may be one of many factors used 

in negotiations with publishers and developers. To the extent the Complaint is quoting from 

documents, Microsoft respectfully refers the Court to the documents for an accurate and 

complete statement of their contents. Microsoft denies the remaining allegations contained in 

Paragraph 54. 

55. To the extent the Complaint is quoting from a document, Microsoft respectfully 

refers the Court to the document for an accurate and complete statement of its contents. 

Microsoft denies the remaining allegations contained in Paragraph 55. 

56. Microsoft admits that it anticipates that

 To the extent the Complaint is quoting 

19 
 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 20 of 37 * PUBLIC *; 

PUBLIC 

from documents, Microsoft respectfully refers the Court to the documents for an accurate and 

complete statement of their contents. Microsoft denies the remaining allegations contained in 

Paragraph 56. 

57. To the extent the Complaint is quoting or characterizing testimony from an 

investigational hearing of an Activision witness, Microsoft respectfully refers the Court to the 

full testimony for an accurate and complete statement of its contents. Microsoft avers that it 

lacks knowledge or information sufficient to form a belief as to the truth of the allegations 

concerning testimony from an Activision witness. To the extent the Complaint is quoting from 

documents, Microsoft respectfully refers the Court to the documents for an accurate and 

complete statement of their contents. Microsoft denies the remaining allegations contained in 

Paragraph 57. 

58. Microsoft avers that it lacks knowledge or information sufficient to form a belief 

as to the truth of Activision’s purported current or future numbers of monthly active users; or 

as to the truth of Activision’s . To the extent the 

Complaint is quoting from documents, Microsoft respectfully refers the Court to the documents 

for an accurate and complete statement of their contents. Microsoft denies the remaining 

allegations contained in Paragraph 58. 

59. Microsoft admits that Call of Duty was first released in 2003. To the extent the 

Complaint is quoting from documents, Microsoft respectfully refers the Court to the documents 

for an accurate and complete statement of their contents. Microsoft avers that it lacks 

knowledge or information sufficient to form a belief as to the truth of the allegations concerning 

the sales of different iterations of Call of Duty and the sales of Top Gun: Maverick. Microsoft 

denies the remaining allegations contained in Paragraph 59. 

20 
 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 21 of 37 * PUBLIC *; 

PUBLIC 

V. RELEVANT MARKETS 

60. Paragraph 60 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies those 

allegations. Microsoft admits the proposed acquisition will result in a combined firm. 

Microsoft denies the remaining allegations contained in Paragraph 60. 

61. Paragraph 61 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies those 

allegations. Microsoft denies the remaining allegations contained in Paragraph 61. 

62. Paragraph 62 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies those 

allegations. Microsoft denies the remaining allegations contained in Paragraph 62. 

63. Paragraph 63 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies those 

allegations. Microsoft denies the remaining allegations contained in Paragraph 63. 

64. Paragraph 64 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies those 

allegations. Microsoft denies the remaining allegations contained in Paragraph 64. 

65. Paragraph 65 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies those 

allegations. Microsoft denies the remaining allegations contained in Paragraph 65. 

66. Microsoft admits that Xbox, Sony, and Nintendo all currently offer competing 

gaming consoles; that different consoles offer different types of performance, including varied 

graphical processing capabilities; that the Xbox Series X|S and PlayStation 5 consoles are plug21 
 

 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 22 of 37 * PUBLIC *; 

PUBLIC 

in devices that connect to an external display like a television, whereas the Nintendo Switch 

console is a portable battery-operated device with a built-in display screen and detachable 

controllers that can be connected to an external display; that the Xbox Series X and PlayStation 

5 consoles are both priced higher than the Xbox Series S and Nintendo Switch consoles; that 

console competitors offer overlapping gaming content; that Nintendo offers third-party content 

on the Switch console; that Xbox and Sony released their most recent consoles (the Xbox Series 

X|S and the PlayStation 5, respectively) in 2020; and that Nintendo released its most recent 

console (the Nintendo Switch) in 2017. To the extent the Complaint is quoting from documents, 

Microsoft respectfully refers the Court to the documents for an accurate and complete statement 

of their contents. Microsoft avers that it lacks knowledge or information sufficient to form a 

belief as to the truth of the allegations concerning competitors’ business strategies and the 

precise technical specifications of competitor devices. Microsoft denies the remaining 

allegations contained in Paragraph 66. 

67. To the extent the Complaint is quoting from documents, Microsoft respectfully 

refers the Court to the documents for an accurate and compete statement of their content. 

Microsoft denies the remaining allegations contained in Paragraph 67. 

68. Microsoft denies the allegations contained in Paragraph 68. 

69. To the extent the Complaint is quoting from documents, Microsoft respectfully 

refers the Court to the documents for an accurate and complete statement of their contents. 

Microsoft avers that it lacks knowledge or information sufficient to form a belief as to the truth 

of the purported industry source estimates. Microsoft denies the remaining allegations 

contained in Paragraph 69. 

70. Paragraph 70 purports to state conclusions of law to which no response is 

22 
FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 23 of 37 * PUBLIC *; 

PUBLIC 

required. To the extent a response is required to these conclusions, Microsoft denies those 

allegations. Microsoft denies the remaining allegations contained in Paragraph 70. 

71. Paragraph 71 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies those 

allegations. To the extent the Complaint is characterizing witness testimony from a trial in 

another matter, Microsoft respectfully refers the Court to the full testimony for an accurate and 

complete statement of its contents. Microsoft denies the remaining allegations contained in 

Paragraph 71. 

72. Paragraph 72 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies those 

allegations. Microsoft denies the remaining allegations contained in Paragraph 72. 

73. Paragraph 73 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies the 

allegations contained in Paragraph 73. 

74. Paragraph 74 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies the 

allegations contained in Paragraph 74. 

75. Microsoft admits that it has a multigame subscription service known as Xbox 

Game Pass, which has three offerings and gives gamers access to a catalog of hundreds of 

games; that Game Pass Ultimate provides access to Xbox Cloud Gaming, along with other 

features; and that these combined Game Pass offerings currently have approximately 25 million 

subscribers. Microsoft denies the remaining allegations contained in Paragraph 75. 

76. Microsoft admits that gaming companies compete to improve their platforms, 

23 
 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 24 of 37 * PUBLIC *; 

PUBLIC 

including by offering multigame subscription services; that Xbox is working to develop Game 

Pass into a better multigame subscription service; and that Microsoft attempts to provide its 

users with a varied and rotating catalog of games. Microsoft avers that it lacks knowledge or 

information sufficient to form a belief as to the truth of the other allegations concerning 

unidentified industry participants and their business practices. Microsoft denies the remaining 

allegations contained in Paragraph 76. 

77. Microsoft admits that multigame subscription services are a different way to pay 

for games than the traditional buy-to-play model; and that for some customers the multigame 

subscription model may be cheaper than the buy-to-play model in some circumstances. 

Microsoft avers that it lacks knowledge or information sufficient to form a belief as to the truth 

of the allegations concerning unidentified industry participants and their business practices. 

Microsoft denies the remaining allegations contained in Paragraph 77. 

78. Microsoft admits that it considers a variety of factors in pricing its products and 

services, including the pricing strategies of its competitors. Microsoft avers that it lacks 

knowledge or information sufficient to form a belief as to the truth of the allegations concerning 

unidentified subscription services other than its own. To the extent the Complaint is quoting 

from and characterizing documents, Microsoft respectfully refers the Court to the documents 

for an accurate and complete statement of their contents. Microsoft denies the remaining 

allegations contained in Paragraph 78. 

79. Paragraph 79 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies those 

allegations. Microsoft admits that some multigame subscription services provide users with 

access to hundreds of games for fixed periods of time; and that multigame subscription services 

24 
FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 25 of 37 * PUBLIC *; 

PUBLIC 

can allow gamers to discover new content they may otherwise have missed or not purchased. 

To the extent the Complaint is relying on documents, Microsoft respectfully refers the Court to 

the documents for an accurate and complete statement of their contents. Microsoft denies the 

remaining allegations contained in Paragraph 79. 

80. Paragraph 80 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies those 

allegations. Microsoft admits that Xbox Live Gold and PlayStation Plus Essential offer fewer 

game choices to subscribers than some other subscription offerings. Microsoft denies the 

remaining allegations contained in Paragraph 80. 

81. Paragraph 81 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies those 

allegations. Microsoft admits that in some circumstances mobile-native games can have 

different levels of complexity and game quality than console- and PC-native games. Microsoft 

denies the remaining allegations contained in Paragraph 81. 

82. Paragraph 82 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies the 

allegations contained in Paragraph 82. 

83. Paragraph 83 purports to state conclusions of law to which no response is 

required. To the extent that a response is required to these conclusions, Microsoft denies the 

allegations contained in Paragraph 83. 

84. Paragraph 84 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies the 

allegations contained in Paragraph 84. 

25 
FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 26 of 37 * PUBLIC *; 

PUBLIC 

85. Paragraph 85 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies the 

allegations contained in Paragraph 85. 

86. Microsoft admits that cloud gaming may, provided certain conditions (such as the 

availability of sufficient Internet access) are met, allow customers to stream some games from 

the cloud rather than downloading them to play locally on their devices, including on consoles, 

PCs, and mobile devices. Microsoft denies the remaining allegations contained in 

Paragraph 86. 

87. Microsoft admits that cloud gaming allows customers to stream games from the 

cloud that may have been developed for other devices or operating systems; and that this may 

allow some consumers who are unable to afford more expensive devices to stream those games. 

To the extent the Complaint is relying on documents, Microsoft respectfully refers the Court to 

the documents for an accurate and complete statement of their contents. Microsoft denies the 

remaining allegations contained in Paragraph 87. 

88. Microsoft admits that cloud gaming may allow some consumers who are unable 

to afford more expensive devices to stream games they would not have been able to without 

cloud gaming. To the extent the Complaint is quoting from documents, Microsoft respectfully 

refers the Court to the documents for an accurate and complete statement of their contents. 

Microsoft denies the remaining allegations contained in Paragraph 88. 

89. To the extent the Complaint is quoting from documents, Microsoft respectfully 

refers the Court to the documents for an accurate and complete statement of their contents. 

Microsoft denies the remaining allegations contained in Paragraph 89. 

90. Microsoft admits that Xbox made a significant investment in Xbox Cloud 

26 
 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 27 of 37 * PUBLIC *; 

PUBLIC 

Gaming; and that Xbox Cloud Gaming is operated by using custom-built servers in Microsoft 

data centers to remotely run Xbox console games via Xbox’s specialized console hardware. 

Microsoft denies the remaining allegations contained in Paragraph 90. 

91. Paragraph 91 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies the 

allegations contained in Paragraph 91. 

92. Paragraph 92 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies the 

allegations contained in Paragraph 92. 

93. Microsoft avers that it lacks knowledge or information sufficient to form a belief 

as to the truth of the allegations concerning unidentified industry participants. To the extent 

the Complaint is quoting from and characterizing documents, Microsoft respectfully refers the 

Court to the documents for an accurate and complete statement of their contents. Microsoft 

denies the remaining allegations contained in Paragraph 93. 

94. Microsoft admits that as of the first quarter of 2022, Xbox had 25 million Game 

Pass subscribers, including a substantial number in the United States; and that Game Pass prices 

vary in some locations. Microsoft denies the remaining allegations contained in Paragraph 94. 

95. Microsoft avers that it lacks knowledge or information sufficient to form a belief 

as to the truth of the allegations concerning other industry participants. Microsoft admits that 

cloud gaming requires advanced technology and sufficient Internet services. Microsoft denies 

the remaining allegations contained in Paragraph 95. 

27 
 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 28 of 37 * PUBLIC *; 

PUBLIC 

VI. ANTICOMPETITIVE EFFECTS 

96. Paragraph 96 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies those 

allegations. Microsoft denies the remaining allegations contained in Paragraph 96. 

97. Paragraph 97 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies those 

allegations. Microsoft admits that it is valuable to have a variety of content available on Xbox 

and Game Pass. Microsoft denies the remaining allegations contained in Paragraph 97. 

98. Paragraph 98 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies those 

allegations. Microsoft denies the remaining allegations contained in Paragraph 98. 

99. Microsoft admits that it is valuable to have a variety of content available on 

Xbox and Game Pass. Microsoft denies the remaining allegations contained in Paragraph 99. 

100. To the extent the Complaint is quoting from documents, Microsoft respectfully 

refers the Court to the documents for an accurate and complete statement of their contents. 

Microsoft denies the remaining allegations contained in Paragraph 100. 

101. To the extent the Complaint is quoting from documents, Microsoft respectfully 

refers the Court to the documents for an accurate and complete statement of their contents. 

Microsoft denies the remaining allegations contained in Paragraph 101. 

102. Microsoft admits that in its current revenue-sharing agreement with Activision, 

28 
 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 29 of 37 * PUBLIC *; 

PUBLIC 

To the extent the Complaint is quoting from documents, Microsoft 

respectfully refers the Court to the documents for an accurate and complete statement of their 

contents. Microsoft denies the remaining allegations contained in Paragraph 102. 

103. Microsoft admits it seeks to acquire Activision and its content. Microsoft denies 

the remaining allegations contained in Paragraph 103. 

104. Microsoft denies the allegations contained in Paragraph 104. 

105. Microsoft denies the allegations contained in Paragraph 105. 

106. Microsoft avers that it lacks knowledge or information sufficient to form a belief 

as to the truth of the allegations concerning Activision’s collaboration with other gaming 

hardware manufacturers and the goals of that collaboration. Microsoft denies the remaining 

allegations contained in Paragraph 106. 

107. Microsoft avers that it lacks knowledge or information sufficient to form a belief 

as to the truth of the allegations concerning 

. Microsoft admits that a GPU (or Graphics Processing Unit) is a hardware 

component that renders graphics for video games. Microsoft denies the remaining allegations 

contained in Paragraph 107. 

108. Microsoft admits that gaming is a growing market with significant revenues. 

Microsoft denies the remaining allegations contained in Paragraph 108. 

109. Paragraph 109 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies those 

allegations. Microsoft avers that it lacks knowledge or information sufficient to form a belief 

about the truth of the allegations concerning Activision’s intentions pre-acquisition. Microsoft 

denies the remaining allegations contained in Paragraph 109. 

29 
 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 30 of 37 * PUBLIC *; 

PUBLIC 

110. Microsoft denies the allegations contained in Paragraph 110. 

111. Microsoft avers that it lacks knowledge or information sufficient to form a belief 

about the truth of the allegations about Activision’s alleged presentation to . To the 

extent the Complaint is quoting from documents, Microsoft respectfully refers the Court to the 

documents for an accurate and complete statement of their contents. Microsoft denies the 

allegations contained in Paragraph 111. 

112. Microsoft denies the allegations contained in Paragraph 112. 

113. To the extent the Complaint is relying on unidentified statements or sources, 

Microsoft respectfully refers the Court to those sources for an accurate and complete statement 

of their contents. Microsoft denies the remaining allegations contained in Paragraph 113. 

114. To the extent the Complaint is referencing documents, Microsoft respectfully 

refers the Court to the documents for an accurate and complete statement of their contents. 

Microsoft admits that it acquired ZeniMax, the parent company of a game developer; that 

following its acquisition of ZeniMax, all released ZeniMax titles have been available on 

PlayStation, including two ZeniMax titles that were exclusive to PlayStation upon release as 

well as new updates of Elder Scrolls Online; and that some future ZeniMax games may be 

exclusive to Xbox and PC when they are initially released. Microsoft denies the remaining 

allegations contained in Paragraph 114. 

115. Microsoft denies the allegations contained in Paragraph 115. 

116. To the extent the Complaint is quoting from documents, Microsoft respectfully 

refers the Court to the documents for an accurate and complete statement of their contents. 

Microsoft denies the remaining allegations contained in Paragraph 116. 

117. To the extent the Complaint is referencing documents, Microsoft respectfully 

30 
 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 31 of 37 * PUBLIC *; 

PUBLIC 

refers the Court to the documents for an accurate and complete statement of their contents. 

Microsoft denies the remaining allegations contained in Paragraph 117. 

118. Paragraph 118 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies the 

allegations contained in Paragraph 118. 

119. Paragraph 119 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies the 

allegations contained in Paragraph 119. 

VII. ABSENCE OF COUNTERVAILING FACTORS 

120. Paragraph 120 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies the 

allegations contained in Paragraph 120. 

121. Paragraph 121 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies the 

allegations contained in Paragraph 121. 

VIII. VIOLATION 

122. Microsoft incorporates its responses to each of the allegations contained in 

Paragraphs 1 through 121 as if they were stated in this Paragraph. 

123. Paragraph 123 purports to state conclusions of law to which no response is 

required. To the extent a response is required to these conclusions, Microsoft denies the 

allegations contained in Paragraph 123. 

124. Paragraph 124 purports to state conclusions of law to which no response is 

31 
 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 32 of 37 * PUBLIC *; 

PUBLIC 

required. To the extent a response is required to these conclusions, Microsoft denies the 

allegations contained in Paragraph 124. 

AFFIRMATIVE AND OTHER DEFENSES 

Microsoft asserts the following defenses with respect to the causes of action alleged in the 

Complaint, without assuming the burden of proof or persuasion where such burden rests on the 

Commission. Microsoft has not knowingly or intentionally waived any applicable defenses, and 

it reserves the right to assert and rely upon other applicable defenses that may become available or 

apparent throughout the course of the action. Microsoft reserves the right to supplement its 

defenses as discovery progresses. 

1. The Complaint fails to state a claim upon which relief can be granted. 

2. The Complaint fails to allege a plausible relevant product market or markets. 

3. The Complaint fails to allege a plausible relevant geographic market. 

4. The Complaint fails to allege undue share in any plausibly defined relevant 

market. 

5. The Complaint fails to allege any harm to competition. 

6. The Complaint fails to allege any harm to consumers or consumer welfare. 

7. The combination of Microsoft’s gaming business with Activision’s business will 

be procompetitive. The transaction will result in substantial acquisition-specific 

efficiencies, synergies, and other procompetitive effects that will directly benefit 

consumers. These benefits will greatly outweigh any and all proffered 

anticompetitive effects. 

8. There will be no harm to competition, consumers, or consumer welfare because 

32 
FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 33 of 37 * PUBLIC *; 

PUBLIC 

there is, and will continue to be, entry and expansion by competitors, which is 

timely, likely, and sufficient. 

9. The alleged harm to potential competition is not actionable. 

10. The Commission cannot provide clear proof that the combination of Microsoft’s 

gaming business and Activision’s business would restrain trade in the alleged 

markets for “multi-game content library subscription services” or “cloud gaming 

subscription services” because but-for the proposed transaction, Activision’s 

games would not be available on any such service. 

11. The Commission fails to allege a time frame for the alleged anticompetitive 

effects. 

12. The Commission is not entitled to relief because none of Microsoft’s conduct 

identified in the Complaint is actionable—independently or in the aggregate— 

under the antitrust laws. 

13. Microsoft’s offers of binding contractual commitments to continue to offer 

certain titles like Call of Duty to other gaming companies, including Nintendo 

and Sony, for at least ten years address all of the alleged anticompetitive effects 

in the alleged markets and ensure that there will be no harm to competition or 

consumers. 

14. The Commission’s claims are too speculative to support any claim on which 

relief can be granted. 

15. Neither the filing of this administrative action nor the contemplated relief is in 

the public interest, pursuant to 15 U.S.C. § 45. 

16. The Complaint reflects improper selective enforcement of the antitrust laws. 

33 
FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 34 of 37 * PUBLIC *; 

PUBLIC 

17. The Commission’s charges under Section 5 of the Federal Trade Commission 

Act are unlawful to the extent the Commission purports to apply Section 5 

beyond the metes and bounds of the Sherman and Clayton Acts. 

34 
 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 35 of 37 * PUBLIC *; 

PUBLIC 

WHEREFORE, Microsoft respectfully requests that the Administrative Law Judge enter an 

order: 

1. Denying the Commission’s contemplated relief; 

2. Dismissing the Complaint in its entirety with prejudice; 

3. Awarding Microsoft its costs of suit; and 

4. Awarding such other and further relief as the Administrative Law Judge may 

deem proper. 

Dated: January 3, 2023 Respectfully submitted, 

By: /s/ Beth Wilkinson 

Beth Wilkinson 

Rakesh N. Kilaru 

Kieran Gostin 

Grace L. Hill 

Anastasia M. Pastan 

Sarah E. Neuman 

Wilkinson Stekloff LLP 

2001 M Street NW, 10th Floor 

Washington, DC 20036 

Telephone: (202) 847-4000 

Fax: (202) 847-4005 

bwilkinson@wilkinsonstekloff.com 

rkilaru@wilkinsonstekloff.com 

kgostin@wilkinsonstekloff.com 

ghill@wilkinsonstekloff.com 

apastan@wilkinsonstekloff.com 

sneuman@wilkinsonstekloff.com 

Michael Moiseyev 

Megan A. Granger 

Weil Gotshal & Manges LLP 

2001 M Street NW 

Suite 600 

Washington, DC 20036 

Telephone: (202) 682-7026 

michael.moiseyev@weil.com 

megan.granger@weil.com 

Counsel for Microsoft Corp. 

35 
 

 

 

 

 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 36 of 37 * PUBLIC *; 

PUBLIC 

CERTIFICATE OF SERVICE 

I hereby certify that on January 4, 2023, I caused a true and correct copy of the 

foregoing to be filed electronically using the FTC’s E-Filing System and served the 

following via email: 

April Tabor 

Secretary 

Federal Trade Commission 

600 Pennsylvania Ave., NW, Rm H-113 

Washington, DC 20580 

ElectronicFilings@ftc.gov 

The Honorable D. Michael Chappell 

Administrative Law Judge 

Federal Trade Commission 

600 Pennsylvania Ave., NW, Rm H-110 

Washington, DC 20580 

I also certify that I caused the forgoing document to be served via email to: 

James H. Weingarten (jweingarten@ftc.gov) 

James Abell (jabell@ftc.gov) 

Cem Akleman (cakleman@ftc.gov) 

Taylor Alexander (talexander@ftc.gov) 

Peggy Bayer Femenella (pbayerfemenella@ftc.gov) 

Michael T. Blevins (mblevins@ftc.gov) 

Amanda L. Butler (abutler2@ftc.gov) 

Nicole Callan (ncallan@ftc.gov) 

Maria Cirincione (mcirincione@ftc.gov) 

Kassandra DiPietro (kdipietro@ftc.gov) 

Jennifer Fleury (jfleury@ftc.gov) 

Michael A. Franchak (mfranchak@ftc.gov) 

James Gossmann (jgossmann@ftc.gov) 

Ethan Gurwitz (egurwitz@ftc.gov) 

Meredith Levert (mlevert@ftc.gov) 

Merrick Pastore (mpastore@ftc.gov) 

Stephen Santulli (ssantulli@ftc.gov) 

Edmund Saw (esaw@ftc.gov) 

U.S. Federal Trade Commission 

600 Pennsylvania Ave., N.W. 

Washington, DC 20580 

Telephone: (202) 326-3570 

Counsel Supporting the Complaint 
FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 1/4/2023 | Document No. 605587 | PAGE Page 37 of 37 * PUBLIC *; 

PUBLIC 

Steven C. Sunshine (steve.sunshine@skadden.com) 

Julia K. York (julia.york@skadden.com) 

Jessica R. Watters (jessica.watters@skadden.com) 

Skadden, Arps, Slate, Meagher & Flom LLP 

1440 New York Avenue, N.W. 

Washington, D.C. 20005 

Telephone: (202) 271-7860 

Maria A. Raptis (maria.raptis@skadden.com) 

Michael J. Sheerin (michael.sheerin@skadden.com) 

Matthew M. Martino (matthew.martino@skadden.com) 

Evan R. Kreiner (evan.kreiner@skadden.com 

Andrew D. Kabbes (andrew.kabbes@skadden.com) 

Bradley J. Pierson (bradley.pierson@skadden.com) 

Skadden, Arps, Slate, Meagher & Flom LLP 

One Manhattan West 

New York, NY 10001 

Telephone: (212) 735-2425 

Counsel for Activision Blizzard, Inc. 

/s/ Beth Wilkinson 

Beth Wilkinson 

Counsel for Microsoft Corp.