While rumored for some time now, the FTC (U.S. Federal Trade Commission) has issued a press release indicating that it is seeking to block Microsoft’s acquisition of Activision Blizzard.
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Announced earlier this year, Microsoft plans to acquire Activision Blizzard, publisher of games such as Call of Duty, World of Warcraft, Overwatch, and Diablo for a whopping $69 billion. The FTC claims that if the deal goes through, Microsoft would be able to suppress competitors like Sony.
“The Federal Trade Commission is seeking to block technology giant Microsoft Corp. from acquiring leading video game developer Activision Blizzard, Inc. and its blockbuster gaming franchises such as Call of Duty, alleging that the $69 billion deal, Microsoft’s largest ever and the largest ever in the video gaming industry, would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.”
FTC press release
Microsoft is no stranger to acquisitions, having purchased Zenimax Bethesda last year. The FTC is using that deal as part of its arguments to block the current acquisition of Activision Blizzard, even though Microsoft has promised to keep Call of Duty on PlayStation for at least 10 years, and even bring it to the Nintendo Switch.
“In a complaint issued today, the FTC pointed to Microsoft’s record of acquiring and using valuable gaming content to suppress competition from rival consoles, including its acquisition of ZeniMax, parent company of Bethesda Softworks (a well-known game developer). Microsoft decided to make several of Bethesda’s titles including Starfield and Redfall Microsoft exclusives despite assurances it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles.
“Microsoft has already shown that it can and will withhold content from its gaming rivals,” said Holly Vedova, Director of the FTC’s Bureau of Competition. “Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.”
FTC press release
Interestingly enough, the FTC specifically mentions “timing of access to Activision’s content” which, currently, is controlled somewhat by Sony when it comes to Call of Duty with PlayStation exclusive, or timed-exclusive, content.
“But that could change if the deal is allowed to proceed. With control over Activision’s blockbuster franchises, Microsoft would have both the means and motive to harm competition by manipulating Activision’s pricing, degrading Activision’s game quality or player experience on rival consoles and gaming services, changing the terms and timing of access to Activision’s content, or withholding content from competitors entirely, resulting in harm to consumers.”
FTC press release
At the end of the day, both Microsoft and Sony are big in the acquisition game, with Sony recently acquiring Bungie, makers of the popular Destiny game series. In addition, both studios publish games that are exclusive to their consoles or ecosystem, so that’s not something new either. But as mentioned before, Microsoft intends to keep Call of Duty, the key game Sony is contending with throughout this process, on the PlayStation for at least a decade to come, as well as bring it to more platforms like the Nintendo Switch.
The Commission vote to issue the complaint was 3-1. While this is just an administrative complaint, the next step will see the FTC begin proceed to see this deal tried in a formal hearing before an administrative law judge.
What do you think about the move by FTC seeking to block Microsoft’s Activision Blizzard acquisition? Do you think the deal will go through? Let us know on social media by using the buttons below.
Last Updated on June 1, 2023.
