Microsoft’s FTC fight comes down to Call of Duty

The final day of FTC v. Microsoft gave us key closing arguments from both parties and a chance to reflect on this giant hearing. Judge Jacqueline Scott Corley took the opportunity to reflect, too: would she even be sitting here, she mused, if Sony had signed a Call of Duty deal with Microsoft?

That’s a good point, and it was part of a series of tough questions Judge Corley had for the FTC. The grilling centered on why consumers would be harmed if Microsoft acquired Activision Blizzard and particularly on how many PlayStation players would switch to Xbox if Activision’s key game actually disappeared. The FTC has relied largely on Sony, the market leader in consoles, to back up its theory of harm to competition if Microsoft were to make Call of Duty exclusive to Xbox or sabotage the PlayStation version. It’s a theory that has already been rejected by most regulators worldwide, including the European Commission and even the Competition and Markets Authority (CMA) in the UK.

Despite this, the FTC has focused most of its case on Call of Duty and Xbox console exclusivity instead of exploring the cloud competition concerns that both the CMA and European Commission took issue with — the former approving the deal only after securing a remedy from Microsoft about cloud concerns, the latter blocking it entirely over them.

That gave the agency a difficult case to prove, and in the dispute’s final hours, the cracks really began to show.

Before the closing arguments, there was one last journey into the Xbox financial weeds. Xbox CFO Tim Stuart faced a grilling over the models involved in acquisitions for both Bethesda and Activision Blizzard. We heard about emails and documents painting a picture of how Microsoft could withhold Activision games to benefit Xbox Game Pass.

Then the FTC suddenly let slip that Microsoft would need an additional 2 million Xbox Game Pass subscribers a year to offset an unknown drop in Call of Duty royalty rates from PlayStation. You could hear an audible “gasp” at the information getting leaked in real time before the FTC apologized and described a scenario where if Call of Duty royalties dropped, a shift toward Xbox consoles or Xbox Game Pass would help offset the losses. While the FTC didn’t read out all of the exact numbers in this scenario, as they were supposed to be confidential, it’s clear Microsoft has been looking at models where it makes a lot less money from Call of Duty on PlayStation.

Stuart also discussed Microsoft’s mobile opportunity with Activision Blizzard, something we’ve heard from Xbox chief Phil Spencer previously, too. In an email to a colleague, he compares the mobile gaming market to electric cars:

We don’t want to be the oil company when the world shifts to 100 percent electric cars

Microsoft’s lawyer then asked Stuart to clarify what he means here, and he’s very clear:

You just don’t want to be on a business model that won’t exist in the future

The closing arguments were a wide-ranging back-and-forth that let both parties counter each other and answer questions from Judge Corley. The FTC started out by reiterating that Microsoft’s proposed acquisition of Activision Blizzard “raised substantial questions” about anti-competitive effects:

All the evidence is showing, your honor, that Call of Duty and triple-A games in particular and some of the other Activision franchises drive gamers. The majority driver by far of the synergies from Microsoft comes from driving users to engage and join Game Pass, because they understand the value of this content. You’ve also heard quite a bit about decisions involving Zenimax… that evidence, your honor, is the evidence of Microsoft’s incentives when it comes to valuable content

This cut to the main part of the FTC’s case: that content and exclusivity is designed to push Game Pass and therefore harm competitors like Sony. This closing argument didn’t mention much about the harm to consumers, though, with Judge Corley even pointing that out at one point in the hearing: “It’s not the harm to Sony we care about — it’s the harm to consumers.” Judge Corley also wanted to know whether we’d even be here if Microsoft had an agreement with Sony for Call of Duty. “I think we would still have had an investigation,” answered the FTC lawyer.

This line of questioning didn’t ease up, either. Judge Corley then mentioned that 62 percent of all PlayStation owners don’t play Call of Duty at all, referencing data from Elizabeth Bailey, PhD, Microsoft’s economic expert. “They’re not going to miss it; the foreclosure won’t affect them.” She wanted to establish why Call of Duty was important and whether the FTC’s economic expert, Robin Lee, PhD, had “actually looked at real-world data” in his models.

The FTC lawyer struggled to respond here and referenced PlayStation chief Jim Ryan’s testimony instead of answering the question related to Lee’s testimony. “That’s not what I asked,” said Judge Corley. The FTC lawyer continued to struggle and explain Lee’s report so much that another FTC lawyer had to step in and try and get things back on track. It didn’t really help, as things went back and forth for quite some time around the point of proving how many PlayStation owners would actually switch to Xbox if Call of Duty was made exclusive.

Microsoft’s team of lawyers had been quiet up until this point, but one jumped in to say the group didn’t “have many answers” from Lee. It felt like Microsoft’s team was sitting there watching the FTC tie itself in knots over its core argument and just enjoying the spectacle.

We then briefly moved to the market definition of consoles, a subject that has included the FTC and Microsoft arguing about the Nintendo Switch all week and boring me to death in the process. Judge Corley took a surprise line of questioning here, though, asking about why people couldn’t switch to PC, arguing that “everybody had a $1,000 or $1,500 PC” during the pandemic.

The FTC said it has seen no evidence that Microsoft is benchmarking the PC against an Xbox. The FTC could have easily explained to Judge Corley that a gaming PC requires a dedicated GPU to play Call of Duty, significantly increasing the price and complexity compared to the PCs people typically have at home or may have purchased during the pandemic. Most PCs that are purchased every year are also laptops, with very few of them capable enough to play Call of Duty properly.

It felt like the FTC didn’t understand the gaming market it’s trying to define, and that came up again as Microsoft argued again that the Nintendo Switch is a competitor because it runs games like Fortnite, Apex Legends, Rocket League, and other top games that are available on both the Switch and Xbox. Judge Corley also mentioned that surely they compete on price since Xbox Series S and Switch are the same $299 price point.

Then at the hour mark, we got an interesting intervention. Early in questioning, Judge Corley had asked the FTC about Bethesda games that were comparably important to Call of Duty, leading the FTC to cite Elder Scrolls as a potential equivalent. Microsoft’s head lawyer, Beth Wilkinson, then corrected a mistake with her own mistake:

Could I clarify one issue that council raised with you, when you were asking about Zenimax and asked him to find a game that was most similar to [Call of Duty], he mentioned Elder Scrolls. That is incorrect. There are two Elder Scrolls games, one is online called Elder Scrolls Online — that is a multiplayer game, it is on PlayStation today. The game he’s talking about Elder Scrolls 16… the projected release is 2026 as a single-player game. It is not anywhere similar to Call of Duty, which as you know is multiplayer and multi-platform.

Wilkinson had just casually mentioned that Elder Scrolls 6 (not 16, as she said in court) is due for release in 2026. We know Bethesda loves numbers (Starfield was supposed to release 11.11.22, and Elder Scrolls V: Skyrim debuted on 11.11.11), but surely Elder Scrolls 6 isn’t coming on 2.6.26, right?

After a brief break away from Call of Duty, Judge Corley pulled everyone back into it. “All of this is for a shooter video game? We’re concerned about competition for this one shooter video game?” asked Judge Corley, clearly frustrated.

We then heard a key exchange:

Judge Corley: What do you say though to Mr. Ryan who said that Star-whatever [Starfield] there was nothing anti-competitive about Microsoft making that exclusive. Under what you just said to me, that is anti-competitive

FTC: I don’t know the basis for why Mr. Ryan was less upset about that one than Call of Duty

Judge Corley: Because he does the same thing

The FTC and Microsoft have been arguing over whether Microsoft’s cloud deals with Nvidia and other cloud gaming rivals should legally be considered in this case. The FTC argues that Microsoft claims these deals are important but that there’s no analysis to prove that and nobody is saying these deals are magnificent. Judge Corley cut in to point out that Nvidia has testified it’s happy and that it will reduce costs for Nvidia. “Won’t that enable them to better compete with Microsoft’s xCloud? That’s pro-competitive, right?” asks Judge Corley.

The FTC is quick to point out here that Nvidia’s deal involves a second agreement for Windows servers to “sweeten the pot,” and Judge Corley agrees “it definitely sweetened the pot.” We don’t know the exact terms of the Nvidia deal, but we know the CMA has shown concern around Xbox PC games only being available on Windows-based cloud servers. If Amazon, Nvidia, or others want to switch to Linux and use Proton, could they do that with Microsoft’s cloud deals? Probably not.

Before we moved fully onto the cloud discussion, Microsoft was keen to point out that the FTC is struggling to “figure out what the harm is, so they’re turning to you [the Judge] or us and saying you should figure it out because it’s ‘too hard for us.’” Microsoft also argues that exclusives happen all the time and that Nadella claimed he doesn’t want to live in that world but has to because of Sony. “It’s part of competition,” argues Microsoft, “not part of anti-competitive behavior.”

The FTC says the next big thing is multi-game subscriptions and then cloud, arguing that Microsoft wants to build a moat of content for both:

We’ve seen from Microsoft documents and their emphasis on cloud and subscriptions, Game Pass is a strategic driver for Microsoft’s gaming business. The effect of this transaction is to turbo charge Game Pass… leave Google, Amazon ‘in the dust’ and build the content moat around Game Pass. It’s in the record and compelling. There is a concern that you take this content and use it to advance your own platform and the consumer is harmed

The FTC then argued the harm is “we end up in a world where instead of having content available, it’s all just Game Pass, and maybe Sony has PlayStation Plus and those two suck up all the content, and that’s it.” Microsoft hit back, saying “everyone said that cloud isn’t an economically viable model” during their witness testimony, but Judge Corley pointed out “maybe not right now… but we don’t have DVDs anymore. The FTC’s concern is about the future.”

The cloud agreements are still a sticking point after a brief mention of the Nvidia deal earlier on:

MS lawyer: With all of these other streaming services… they are all going to have the ability to stream the game which they don’t have today.

Judge Corley to FTC: In some sense you won and got what you wanted, forced them into enter these agreements

FTC: We have evidence there are agreements… we do not have evidence of anything beyond agreements

Judge Corley: Why would Nvidia do what they did, say what they said? They’re a competitor to Microsoft in cloud gaming so why did they do it then?

FTC: That doesn’t count under the law because it’s not merger specific. The deal could have been achieved whether we were here or not… it was a sweetener.

Microsoft’s lawyers called this skepticism of its cloud contracts “absolutely absurd,” and Judge Corley reiterates that regulators won by forcing Microsoft into these agreements. But the FTC argues, “I don’t think we won because… we have no evidence of what these agreements will lead to.” The FTC says it can’t “declare victory on behalf of consumers” based on what it believes are hastily put-together agreements, with some being signed on the eve of regulatory decisions.

Judge Corley next wanted to know about subscriptions and God of War, which she has repeatedly referred to as “the Thor game.” Wouldn’t Call of Duty on Game Pass pressure Sony to put God of War Ragnarök on PlayStation Plus? The FTC argues that without the merger, Activision could do its own Call of Duty deal for PlayStation Plus, but this deal cuts off that option.

“I don’t understand why Sony won’t make its PlayStation Plus subscription better?” asked Judge Corley.

The hearing ended almost exactly as it began: with Call of Duty.

Judge Corley: We wouldn’t be here if Microsoft made Call of Duty. It’s the purchasing right. We don’t benefit from just buying up each other. We benefit from keeping things separate and therefore incentivizing people to create themselves

Microsoft: That’s not true. We want smaller groups to create content, right? And the fact that someone purchased — and they’re not small anymore — Activision… they produce popular content and someone else wants to buy it to distribute it, and then someone else wants to make more content. And that’s the art that’s going on whether it’s movies, gaming, television, no one says if you don’t have this one game, or this one television program or movie, you can’t compete.

Judge Corley will now make a decision and issue an order in the coming days. Some of the legal arguments still need to be filed on Friday and some other administrative parts on Monday, so it’s likely that we won’t hear a final decision until Monday at the very earliest. With the July Fourth holiday in the US, that will probably push the result into Wednesday next week, though it will almost certainly come before the end of next week.

If Judge Corley grants the FTC its preliminary injunction, the deal is almost certainly over for Microsoft unless it’s willing to renegotiate with Activision Blizzard and then attempt to navigate months or even years of the FTC’s administrative case against the merger. Microsoft has even admitted in its filing that it will likely walk away, meaning it will have to pay $3 billion in breakup fees to Activision Blizzard.

If Microsoft wins, the FTC will likely have a week to appeal, but the regulator often decides not to after a loss like this, paving the way for Microsoft to close its acquisition. The blocker for Microsoft in this situation will still be the CMA, the UK regulator that’s blocked the deal on cloud concerns and attempted to delay Microsoft’s appeal process from July 28th to October, right in the middle of this FTC case.

It’s reasonable to assume that if Microsoft wins with the FTC, then it could attempt some form of remedy with UK regulators, especially as the CMA has often relied on the FTC case to justify delays. If that’s not possible, then the alternative is to close the deal without the UK and work out how to carve out Activision games from Xbox Game Pass and Xbox Cloud Gaming in the UK — or the less complicated option of agreeing to a deal extension with Activision Blizzard that would cover until the end of the CMA appeal process later this year.

Either way, we’re in relatively unchartered territory with a deal of this size. But if the FTC wins its preliminary injunction, then absent a successful appeal from Microsoft, it’s game over.

If you’ve missed this five-part series so far, here’s where to catch up:

• Day 1: Microsoft opened the FTC hearing with a Sony bombshell

• Day 2: Has Xbox really lost the console wars?

• Day 3: Sony’s PlayStation chief says publishers hate Xbox Game Pass

• Day 4: Microsoft and Activision CEOs battle to keep a giant Xbox deal alive

The final day of FTC v. Microsoft gave us key closing arguments from both parties and a chance to reflect on this giant hearing. Judge Jacqueline Scott Corley took the opportunity to reflect, too: would she even be sitting here, she mused, if Sony had signed a Call of Duty deal with Microsoft?

That’s a good point, and it was part of a series of tough questions Judge Corley had for the FTC. The grilling centered on why consumers would be harmed if Microsoft acquired Activision Blizzard and particularly on how many PlayStation players would switch to Xbox if Activision’s key game actually disappeared. The FTC has relied largely on Sony, the market leader in consoles, to back up its theory of harm to competition if Microsoft were to make Call of Duty exclusive to Xbox or sabotage the PlayStation version. It’s a theory that has already been rejected by most regulators worldwide, including the European Commission and even the Competition and Markets Authority (CMA) in the UK.

Despite this, the FTC has focused most of its case on Call of Duty and Xbox console exclusivity instead of exploring the cloud competition concerns that both the CMA and European Commission took issue with — the former approving the deal only after securing a remedy from Microsoft about cloud concerns, the latter blocking it entirely over them.

That gave the agency a difficult case to prove, and in the dispute’s final hours, the cracks really began to show.

Before the closing arguments, there was one last journey into the Xbox financial weeds. Xbox CFO Tim Stuart faced a grilling over the models involved in acquisitions for both Bethesda and Activision Blizzard. We heard about emails and documents painting a picture of how Microsoft could withhold Activision games to benefit Xbox Game Pass.

Then the FTC suddenly let slip that Microsoft would need an additional 2 million Xbox Game Pass subscribers a year to offset an unknown drop in Call of Duty royalty rates from PlayStation. You could hear an audible “gasp” at the information getting leaked in real time before the FTC apologized and described a scenario where if Call of Duty royalties dropped, a shift toward Xbox consoles or Xbox Game Pass would help offset the losses. While the FTC didn’t read out all of the exact numbers in this scenario, as they were supposed to be confidential, it’s clear Microsoft has been looking at models where it makes a lot less money from Call of Duty on PlayStation.

Stuart also discussed Microsoft’s mobile opportunity with Activision Blizzard, something we’ve heard from Xbox chief Phil Spencer previously, too. In an email to a colleague, he compares the mobile gaming market to electric cars:

We don’t want to be the oil company when the world shifts to 100 percent electric cars

Microsoft’s lawyer then asked Stuart to clarify what he means here, and he’s very clear:

You just don’t want to be on a business model that won’t exist in the future

The closing arguments were a wide-ranging back-and-forth that let both parties counter each other and answer questions from Judge Corley. The FTC started out by reiterating that Microsoft’s proposed acquisition of Activision Blizzard “raised substantial questions” about anti-competitive effects:

All the evidence is showing, your honor, that Call of Duty and triple-A games in particular and some of the other Activision franchises drive gamers. The majority driver by far of the synergies from Microsoft comes from driving users to engage and join Game Pass, because they understand the value of this content. You’ve also heard quite a bit about decisions involving Zenimax… that evidence, your honor, is the evidence of Microsoft’s incentives when it comes to valuable content

This cut to the main part of the FTC’s case: that content and exclusivity is designed to push Game Pass and therefore harm competitors like Sony. This closing argument didn’t mention much about the harm to consumers, though, with Judge Corley even pointing that out at one point in the hearing: “It’s not the harm to Sony we care about — it’s the harm to consumers.” Judge Corley also wanted to know whether we’d even be here if Microsoft had an agreement with Sony for Call of Duty. “I think we would still have had an investigation,” answered the FTC lawyer.

This line of questioning didn’t ease up, either. Judge Corley then mentioned that 62 percent of all PlayStation owners don’t play Call of Duty at all, referencing data from Elizabeth Bailey, PhD, Microsoft’s economic expert. “They’re not going to miss it; the foreclosure won’t affect them.” She wanted to establish why Call of Duty was important and whether the FTC’s economic expert, Robin Lee, PhD, had “actually looked at real-world data” in his models.

The FTC lawyer struggled to respond here and referenced PlayStation chief Jim Ryan’s testimony instead of answering the question related to Lee’s testimony. “That’s not what I asked,” said Judge Corley. The FTC lawyer continued to struggle and explain Lee’s report so much that another FTC lawyer had to step in and try and get things back on track. It didn’t really help, as things went back and forth for quite some time around the point of proving how many PlayStation owners would actually switch to Xbox if Call of Duty was made exclusive.

Microsoft’s team of lawyers had been quiet up until this point, but one jumped in to say the group didn’t “have many answers” from Lee. It felt like Microsoft’s team was sitting there watching the FTC tie itself in knots over its core argument and just enjoying the spectacle.

We then briefly moved to the market definition of consoles, a subject that has included the FTC and Microsoft arguing about the Nintendo Switch all week and boring me to death in the process. Judge Corley took a surprise line of questioning here, though, asking about why people couldn’t switch to PC, arguing that “everybody had a $1,000 or $1,500 PC” during the pandemic.

The FTC said it has seen no evidence that Microsoft is benchmarking the PC against an Xbox. The FTC could have easily explained to Judge Corley that a gaming PC requires a dedicated GPU to play Call of Duty, significantly increasing the price and complexity compared to the PCs people typically have at home or may have purchased during the pandemic. Most PCs that are purchased every year are also laptops, with very few of them capable enough to play Call of Duty properly.

It felt like the FTC didn’t understand the gaming market it’s trying to define, and that came up again as Microsoft argued again that the Nintendo Switch is a competitor because it runs games like Fortnite, Apex Legends, Rocket League, and other top games that are available on both the Switch and Xbox. Judge Corley also mentioned that surely they compete on price since Xbox Series S and Switch are the same $299 price point.

Then at the hour mark, we got an interesting intervention. Early in questioning, Judge Corley had asked the FTC about Bethesda games that were comparably important to Call of Duty, leading the FTC to cite Elder Scrolls as a potential equivalent. Microsoft’s head lawyer, Beth Wilkinson, then corrected a mistake with her own mistake:

Could I clarify one issue that council raised with you, when you were asking about Zenimax and asked him to find a game that was most similar to [Call of Duty], he mentioned Elder Scrolls. That is incorrect. There are two Elder Scrolls games, one is online called Elder Scrolls Online — that is a multiplayer game, it is on PlayStation today. The game he’s talking about Elder Scrolls 16… the projected release is 2026 as a single-player game. It is not anywhere similar to Call of Duty, which as you know is multiplayer and multi-platform.

Wilkinson had just casually mentioned that Elder Scrolls 6 (not 16, as she said in court) is due for release in 2026. We know Bethesda loves numbers (Starfield was supposed to release 11.11.22, and Elder Scrolls V: Skyrim debuted on 11.11.11), but surely Elder Scrolls 6 isn’t coming on 2.6.26, right?

After a brief break away from Call of Duty, Judge Corley pulled everyone back into it. “All of this is for a shooter video game? We’re concerned about competition for this one shooter video game?” asked Judge Corley, clearly frustrated.

We then heard a key exchange:

Judge Corley: What do you say though to Mr. Ryan who said that Star-whatever [Starfield] there was nothing anti-competitive about Microsoft making that exclusive. Under what you just said to me, that is anti-competitive

FTC: I don’t know the basis for why Mr. Ryan was less upset about that one than Call of Duty

Judge Corley: Because he does the same thing

The FTC and Microsoft have been arguing over whether Microsoft’s cloud deals with Nvidia and other cloud gaming rivals should legally be considered in this case. The FTC argues that Microsoft claims these deals are important but that there’s no analysis to prove that and nobody is saying these deals are magnificent. Judge Corley cut in to point out that Nvidia has testified it’s happy and that it will reduce costs for Nvidia. “Won’t that enable them to better compete with Microsoft’s xCloud? That’s pro-competitive, right?” asks Judge Corley.

The FTC is quick to point out here that Nvidia’s deal involves a second agreement for Windows servers to “sweeten the pot,” and Judge Corley agrees “it definitely sweetened the pot.” We don’t know the exact terms of the Nvidia deal, but we know the CMA has shown concern around Xbox PC games only being available on Windows-based cloud servers. If Amazon, Nvidia, or others want to switch to Linux and use Proton, could they do that with Microsoft’s cloud deals? Probably not.

Before we moved fully onto the cloud discussion, Microsoft was keen to point out that the FTC is struggling to “figure out what the harm is, so they’re turning to you [the Judge] or us and saying you should figure it out because it’s ‘too hard for us.’” Microsoft also argues that exclusives happen all the time and that Nadella claimed he doesn’t want to live in that world but has to because of Sony. “It’s part of competition,” argues Microsoft, “not part of anti-competitive behavior.”

The FTC says the next big thing is multi-game subscriptions and then cloud, arguing that Microsoft wants to build a moat of content for both:

We’ve seen from Microsoft documents and their emphasis on cloud and subscriptions, Game Pass is a strategic driver for Microsoft’s gaming business. The effect of this transaction is to turbo charge Game Pass… leave Google, Amazon ‘in the dust’ and build the content moat around Game Pass. It’s in the record and compelling. There is a concern that you take this content and use it to advance your own platform and the consumer is harmed

The FTC then argued the harm is “we end up in a world where instead of having content available, it’s all just Game Pass, and maybe Sony has PlayStation Plus and those two suck up all the content, and that’s it.” Microsoft hit back, saying “everyone said that cloud isn’t an economically viable model” during their witness testimony, but Judge Corley pointed out “maybe not right now… but we don’t have DVDs anymore. The FTC’s concern is about the future.”

The cloud agreements are still a sticking point after a brief mention of the Nvidia deal earlier on:

MS lawyer: With all of these other streaming services… they are all going to have the ability to stream the game which they don’t have today.

Judge Corley to FTC: In some sense you won and got what you wanted, forced them into enter these agreements

FTC: We have evidence there are agreements… we do not have evidence of anything beyond agreements

Judge Corley: Why would Nvidia do what they did, say what they said? They’re a competitor to Microsoft in cloud gaming so why did they do it then?

FTC: That doesn’t count under the law because it’s not merger specific. The deal could have been achieved whether we were here or not… it was a sweetener.

Microsoft’s lawyers called this skepticism of its cloud contracts “absolutely absurd,” and Judge Corley reiterates that regulators won by forcing Microsoft into these agreements. But the FTC argues, “I don’t think we won because… we have no evidence of what these agreements will lead to.” The FTC says it can’t “declare victory on behalf of consumers” based on what it believes are hastily put-together agreements, with some being signed on the eve of regulatory decisions.

Judge Corley next wanted to know about subscriptions and God of War, which she has repeatedly referred to as “the Thor game.” Wouldn’t Call of Duty on Game Pass pressure Sony to put God of War Ragnarök on PlayStation Plus? The FTC argues that without the merger, Activision could do its own Call of Duty deal for PlayStation Plus, but this deal cuts off that option.

“I don’t understand why Sony won’t make its PlayStation Plus subscription better?” asked Judge Corley.

The hearing ended almost exactly as it began: with Call of Duty.

Judge Corley: We wouldn’t be here if Microsoft made Call of Duty. It’s the purchasing right. We don’t benefit from just buying up each other. We benefit from keeping things separate and therefore incentivizing people to create themselves

Microsoft: That’s not true. We want smaller groups to create content, right? And the fact that someone purchased — and they’re not small anymore — Activision… they produce popular content and someone else wants to buy it to distribute it, and then someone else wants to make more content. And that’s the art that’s going on whether it’s movies, gaming, television, no one says if you don’t have this one game, or this one television program or movie, you can’t compete.

Judge Corley will now make a decision and issue an order in the coming days. Some of the legal arguments still need to be filed on Friday and some other administrative parts on Monday, so it’s likely that we won’t hear a final decision until Monday at the very earliest. With the July Fourth holiday in the US, that will probably push the result into Wednesday next week, though it will almost certainly come before the end of next week.

If Judge Corley grants the FTC its preliminary injunction, the deal is almost certainly over for Microsoft unless it’s willing to renegotiate with Activision Blizzard and then attempt to navigate months or even years of the FTC’s administrative case against the merger. Microsoft has even admitted in its filing that it will likely walk away, meaning it will have to pay $3 billion in breakup fees to Activision Blizzard.

If Microsoft wins, the FTC will likely have a week to appeal, but the regulator often decides not to after a loss like this, paving the way for Microsoft to close its acquisition. The blocker for Microsoft in this situation will still be the CMA, the UK regulator that’s blocked the deal on cloud concerns and attempted to delay Microsoft’s appeal process from July 28th to October, right in the middle of this FTC case.

It’s reasonable to assume that if Microsoft wins with the FTC, then it could attempt some form of remedy with UK regulators, especially as the CMA has often relied on the FTC case to justify delays. If that’s not possible, then the alternative is to close the deal without the UK and work out how to carve out Activision games from Xbox Game Pass and Xbox Cloud Gaming in the UK — or the less complicated option of agreeing to a deal extension with Activision Blizzard that would cover until the end of the CMA appeal process later this year.

Either way, we’re in relatively unchartered territory with a deal of this size. But if the FTC wins its preliminary injunction, then absent a successful appeal from Microsoft, it’s game over.

If you’ve missed this five-part series so far, here’s where to catch up:

• Day 1: Microsoft opened the FTC hearing with a Sony bombshell

• Day 2: Has Xbox really lost the console wars?

• Day 3: Sony’s PlayStation chief says publishers hate Xbox Game Pass

• Day 4: Microsoft and Activision CEOs battle to keep a giant Xbox deal alive