SAN FRANCISCO, CALIFORNIA – JUNE 23: XBOX CEO Phil Spencer appears in federal court on June 23, 2023 in San Francisco, CA. Executives from Microsoft and Activision/Blizzard will testify at a five-day FTC hearing to determine the outcome of their $68.7 billion merger. (Photo credit: Justin Sullivan/Getty Images)
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As microsoft Trying to convince regulators to approve $68.7 billion acquisition activision blizzardthe company has revealed some of the other ways it is looking to expand in the video game industry.
Microsoft Gaming CEO Phil Spencer testified in San Francisco on Friday that the company had previously begun talks with mobile game developer Zynga, but ultimately failed to reach a deal.
The hearings, which began Thursday and will continue next week, came after the Federal Trade Commission obtained a temporary restraining order to prevent Microsoft from completing its Acquisition of Activision. The court reviewed the FTC’s request to block the transaction and agreed to the status quo.
“I have huge respect for the people at Zynga and what they have built,” Spencer said at the hearing. “Ultimately, we thought our opportunity would need something bigger than Zynga, given the very small starting space in the mobile gaming business.”
take two interactiveZynga, the publisher of Grand Theft Auto titles and other games, ultimately acquired Zynga for $12.7 billion last May. Zynga was originally developed for Facebook’s hit social game FarmVille, but eventually expanded into mobile gaming primarily through acquisitions.
CNBC reported at the time that Activision had met with financial firms to navigate Take-Two’s acquisition of Zynga ahead of Microsoft’s offer.
Spencer did not say when Microsoft was in talks with Zynga, and the company declined to comment further. However, Zynga said: filing Last year, executives met in September 2021 with representatives of an unnamed “strategic acquirer,” who “expressed a non-specific interest in acquiring Zynga,” he said.
This isn’t the first time Microsoft has shown such interest.company reportedly It attempted to acquire Zynga in 2010.
Microsoft is working toward a final agreement with Activision that even if the two companies were to merge, the joint venture would be SonyPlayStation consoles will compete with Microsoft’s Xbox and China’s Tencent.
Spencer said on Friday that mobile games present an opportunity for faster growth than PC games and consoles, where Microsoft captures the majority of gaming revenue. Microsoft is trying to power up cloud-based game streaming on mobile devices, but the effort is not without its challenges. Spencer said those include small typefaces on cell phone screens and the fact that smartphones don’t come with controllers.
moreover, apple He said it’s getting in the way of bringing Microsoft’s Game Pass library of video games to the App Store.
Spencer said she worked with Microsoft’s chief financial officer Amy Hood to explore mobile opportunities after the company moved to Zynga. Activision is the largest publisher of content on mobile, and he was already a long-time Microsoft partner, he said.
Activision expanded its mobile games portfolio with the acquisition of Candy Crush Saga publisher King in 2016. About 35% of the company’s $8 billion Revenue in 2022 Came from the King segment.
WATCH: Microsoft-Activision Blizzard 5-day hearings begin
