
Get in the KNOW
on LA Startups & Tech
XWhy Antitrust Concerns Won’t Block Microsoft’s Activision Acquisition
Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Samson is also a proud member of the Transgender Journalists Association. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him

Microsoft’s proposed $69 billion acquisition of Activision Blizzard is the video game industry’s biggest-ever deal—but while it will likely create a gaming giant by bringing the “Call of Duty” publisher under the Xbox behemoth’s umbrella, legal experts say there is little chance of the deal being called off due to antitrust violations.
The merger is still subject to approval by federal regulators at the Department of Justice and the Federal Trade Commission, a process which could take up to a year. Until then, Santa Monica-based Activision will continue to operate independently with embattled CEO Bobby Kotick at the helm.
If it is approved, the deal would make Microsoft the world’s third-largest gaming firm based on revenue, behind only Chinese tech conglomerate Tencent and longtime Japanese rival Sony. Still, on market share alone, it is unlikely that the combination would raise antitrust red flags; Microsoft’s share of the gaming industry market was just 6.5% in 2020, according to industry research firm Newzoo, which noted that the addition of Activision would lift that figure to only 10.7%.
Gordon Lang, a former DOJ attorney who now helms law firm Nixon Peabody’s antitrust practice, told dot.LA that the deal’s price tag is “an eye-opener and it's enough to get the agency's attention—but as a practical matter, a price tag by itself is not going to make a transaction that has no competitive issues unlawful.”
The acquisition arrives just as federal regulators have taken an increasing vocal stance toward prosecuting illegal mergers in the tech world. Yet despite the tougher approach, FTC chair Lina Khan—who has earned a reputation as a tough tech industry critic—has indicated that the agency will choose its caseload carefully.
“We have to make very difficult choices about which billion-dollar deals we're going to ensure we're closely investigating, but there are very real trade-offs in terms of what that work is going to come at the expense of,” Khan said last week. She added that regulators will focus their efforts on “instances in which [enforcement] could really change the dynamic in the entire market.”
Given that could bode well for Microsoft, which is no stranger to antitrust litigation. The Seattle giant weathered a historic DOJ antitrust lawsuit at the turn of the century, and since then has remained largely out of the trust-busting conversation.
If anything, Microsoft may argue that the Microsoft acquisition will actually increase gaming industry competition, by giving it more firepower to compete with the likes of Sony. “Microsoft would still only be the No. 3 gaming company” after the merger, Lang noted. “Typically in a situation like this, a merger proponent would say, ‘This isn't going to harm competition, because it's going to be able to make me stronger in competing against the top dogs.’”
For instance, while Microsoft’s Xbox Game Studios has mainly focused on publishing games for its namesake console as well as PCs, it doesn’t have a robust offering of mobile games—a rapidly growing segment of the industry in which Activision has found great success. The Santa Monica publisher’s King Digital Studios subsidiary develops the hugely popular “Candy Crush Saga” title, which raked in $36 million in revenue and clocked 2 million downloads in December 2021 alone, according to digital market analytics firm Sensor Tower. Activision’s “Call of Duty: Mobile” game also recorded 2 million downloads this past December, while generating $19 million in revenue.
Regulators could potentially pay special attention to other areas of the two companies’ gaming businesses, particularly consoles. While gamers can currently play top Activision titles like “Call of Duty'' and “Diablo” on Sony’s PlayStation consoles, Microsoft may look to move some of Activision’s hits to its burgeoning Xbox Game Pass subscription service—making them platform-exclusive, and out of reach to PlayStation gamers, in the process.
Yet Xbox boss Phil Spencer has already looked to downplay such concerns, tweeting last week that Microsoft plans to keep “Call of Duty” available on PlayStation. “Sony is an important part of our industry, and we value our relationship,” Spencer said.
Even as Activision and Microsoft consolidate, there is still room for other developers to expand in what remains a growing video game industry. Nixon Peabody attorney Irene Scholl-Tatevosyan, who leads the law firm’s esports and gaming practice, said she expects the buyout to prompt a flurry of future gaming mergers.
“There's a lot of big dogs within the industry competing with each other—but there's also mid-sized and smaller game studios that are also creating a lot of games, that compete and then eventually get bought out or grow bigger on their own,” Scholl-Tatevosyan told dot.LA. “I think there will be a lot of movement in this space where you see a lot of companies taking more and more [market] share of gaming.”
- It's the Start of a New Day in LA for Microsoft - dot.LA ›
- Microsoft Buying Activision Blizzard is a Mixed Bag - dot.LA ›
- Microsoft's $68.7 Billion Deal to Acquire Activision Blizzard Will ... ›
- Analysis: Microsoft's massive $68.7B acquisition of Activision ... ›
- Labor Union Urges SEC to Investigate Activision Over Filing - dot.LA ›
- Antitrust Regulators Review the Activision-Microsoft Merger - dot.LA ›
- Antitrust Regulators Review the Activision-Microsoft Merger - dot.LA ›
- Microsoft-Activision Merger Challenged by U.S. Senators - dot.LA ›
- Activision Reverses Vaccine Mandate Removal - dot.LA ›
- Activision Shareholders Approve Microsoft Merger - dot.LA ›
Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Samson is also a proud member of the Transgender Journalists Association. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him
Subscribe to our newsletter to catch every headline.
Plus Capital Partner Amanda Groves on Celebrity Equity Investments
On this episode of the L.A. Venture podcast, Amanda Groves talks about how PLUS Capital advises celebrity investors and why more high-profile individuals are choosing to invest instead of endorse.
As a partner at PLUS, Groves works with over 70 artists and athletes, helping to guide their investment strategies. PLUS advises their talent roster to combine their financial capital with their social capital and focus on five investment areas: the future of work, future of education, health and wellness, the conscious consumer and sustainability.
“The idea is if we can leverage these people who have incredible audiences—and influence over that audience—in the world of venture capital, you'd be able to help make those businesses move forward faster,” Groves said.
PLUS works to create celebrity partnerships by identifying each client’s passions and finding companies that align with them, Groves said. From there, the venture firm can reach out to prospective partners from its many contacts and can help evaluate businesses that approach its clients. Recently, PLUS paired actress Nina Dobrev with the candy company SmartSweets after she had told them about her love for its snacks.
Celebrity entrepreneurship has shifted quite a bit in recent years, Groves said. While celebrities are paid for endorsements, Groves said investing allows them to gain equity from the growth of companies that benefit from their work.
“Like in movies, for example, where they're earning a residual along the way, they thought, ‘You know, if we're going to partner with these brands and create a tremendous amount of enterprise value, we should be able to capture some of the upside that we're generating, too’,” she said.
Partnering in this way also allows her clients to work with a wider range of brands, including small brands that often can’t afford to spend millions on endorsements. Investing allows high-profile individuals to represent brands they care about, Groves said.
“The last piece of the puzzle was a drive towards authenticity,” Groves said. “A lot of these high-profile artists and athletes are not interested, once they've achieved some sort of level of success, in partnering with brands that they don't personally align with.”
Hear the full episode by clicking on the playhead above, and listen to LA Venture on Apple Podcasts, Stitcher, Spotify or wherever you get your podcasts.
dot.LA Editorial Intern Kristin Snyder contributed to this post.
Rivian Stock Roller Coaster Continues as Amazon Van Delivery Faces Delays
David Shultz is a freelance writer who lives in Santa Barbara, California. His writing has appeared in The Atlantic, Outside and Nautilus, among other publications.
Rivian’s stock lost 7% yesterday on the back of news that the company could face delays in fulfilling Amazon’s order for a fleet of electric delivery vans due to legal issues with a supplier. The electric vehicle maker is suing Commercial Vehicle Group (CVG) over a pricing dispute related to the seats that the supplier promised, according to the Wall Street Journal.
The legal issue could mean that Amazon may not receive their electric vans on time. The dispute hinges on whether or not Commercial Vehicle Group is allowed to raise the prices of its seats after Rivian made engineering and design changes to the original version. Rivian says the price hike from CVG violates the supply contract. CVG denies the claim.
Regardless, the dispute could hamper Rivian’s ability to deliver electric vans to Amazon on time. The ecommerce/streaming/cloud computing/AI megacorporation controls an 18% stake in Rivian as one of the company’s largest early investors. Amazon has previously said it hopes to buy 100,000 delivery vehicles from Rivian by 2030.
The stock plunge marked another wild turn for the EV manufacturer. Last week, Rivian shares dropped 21% on Monday after Ford, another early investor, announced its intent to sell 8 million shares. The next few days saw even further declines as virtually the entire market saw massive losses, but then Rivian rallied partially on the back of their earnings report on Wednesday, gaining 28% back by Friday. Then came yesterday’s 7% slide. Today the stock is up another 10%.
Hold on tight, who knows where we’re going next.
David Shultz is a freelance writer who lives in Santa Barbara, California. His writing has appeared in The Atlantic, Outside and Nautilus, among other publications.
Snapchat’s Attempt to Protect Young Users From Third-Party Apps Falls Short
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
Some Snap Kit platform developers have skirted guidelines meant to make the app safer for children.
A new report from TechCrunch released Tuesday found that some third-party apps that connect to users’ Snap accounts have not been updated according to new guidelines announced in March. The restrictions, which target anonymous messaging and friend-finding apps, are meant to increase child safety. However, the investigation found a number of apps either ignore the new regulations or falsely claim to be integrated with Snapchat.
The Santa Monica-based social media company announced the changes after facing two separate lawsuits related to teen suicide allegedly caused by the app. Over 1,500 developers integrate Snap features like the camera and Bitmojis. Snap originally claimed the update would not affect many apps.
Developers had 30 days to revise their software, but the investigation found that some apps, such as the anonymous Q&A app Sendit, were granted an extension. Others blatantly avoided the changes—the anonymous messaging app HMU, which is now meant for adult users, is still available to users "9+" in the App Store. Certain apps that have been banned from Snap, like Intext, still advertise Snapchat integration.
“First and foremost, we put the privacy and safety of our community first and expect the products built by our developer community to adhere to that standard in addition to bringing fun and positive experiences to people,” Director of Platform Partnerships Alston Cheek told TechCrunch.
The news is a blow to Snap’s recent efforts to cast itself as a responsible social media platform The company recently announced Colleen DeCourcy would take over as the company’s new chief creative officer and CEO Evan Spiegel to recently made a a generous personal donation to graduates of Otis College of Art and Design. The social media company currently faces a lawsuit from a teenager who claims it has not done enough to protect minors from sexual exploitation. In April, 44 attorney generals sent a letter to Snap and TikTok urging the companies to strengthen parental controls.
Lawmakers are considering new policies that would hold social media companies accountable for the content on their platforms. One such bill would require social media companies to share data with independent researchers.
Snapchat recently rolled out augmented reality shopping features and influencer-led original content to grow its younger base of users.
Snap Inc., Snapchat's parent company, is an investor in dot.LA.
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.