US FTC Will Officially Try To Block Microsoft-Activision Merger
The United States Federal Trade Commission has filed a lawsuit that seeks to undo Microsoft's acquisition of video game publisher Activision Blizzard. According to The Washington Post, the FTC vote to block the deal was split 3-1, with three Democrats in favor and one Republican lawmaker against it. Microsoft acquired Activision Blizzard in a deal valued at $69 billion dollars, at a time when the studio was going through serious management turmoil leading all the way up to CEO Bobby Kotick.
Microsoft's acquisition sent ripples across the gaming industry because the maker of Xbox would have control over wildly popular properties like "Call of Duty," "World of Warcraft," "Overwatch," and "Diablo." The key concern was that Microsoft would eventually lock them into its own ecosystem with the Xbox console, the PC universe courtesy of its Windows OS, a subscription service covering both consoles and PC, and a cloud-based game streaming service that even covers smartphones.
This isn't the first time that a Microsoft gaming move has raised eyebrows. When Microsoft acquired Bethesda with its ZeniMax Media purchase, numerous rivals as well as regulators raised concerns that Microsoft was unfairly killing the competition with its deep pockets to enrich its own ecosystem. Microsoft eventually turned "Starfield" into an Xbox exclusive, and there are similar plans reportedly in place for the next "Elder Scrolls" game, as well. The likes of Sony — and antitrust agencies in the U.S. and Europe — aren't really a fan of these events.
This is all about preserving competition
In its official statement, the FTC notes that Microsoft's acquisition would allow it to "suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business." The FTC claims that Microsoft has a history of acquiring gaming properties to stifle the competition by keeping them exclusive to its in-house platforms. Microsoft has argued otherwise, both in its home market as well as in the United Kingdom.
Director of the FTC's Bureau of Competition, Holly Vedova, says the agency seeks to prevent Microsoft from owning and controlling a leading game studio so that it doesn't hurt the competitive landscape in multiple markets. The FTC's complaint notes that Microsoft can change the game in its favor with tactics like degrading the game experience on rival platforms like the PlayStation, manipulating the price, depriving other platforms of top-tier games, or playing with access timing.
Microsoft has already announced plans of bringing the "Call of Duty" franchise for the first time to Nintendo's gaming platform. Xbox chief Phil Spencer has claimed in a podcast interview that Microsoft offered a 10-year deal to Sony covering "Call of Duty," but the PlayStation-maker declined. Spencer said in another podcast that "Call of Duty" games will remain on Sony's PlayStation as long as it exists. Sony — which bought a massive game studio of its own named Bungie not too long ago — claims that Microsoft aims to dominate the market and kill competition.