FTC Suspends Case Against Microsoft's Activision Blizzard Merger
The U.S. FTC has suspended its legal challenge against Microsoft's $68.7 billion acquisition of Activision Blizzard. According to a document published on its website, the agency will no longer pursue an administrative challenge that was supposed to go on trial next month. The FTC filed a lawsuit seeking to block the merger last year but has since suffered multiple setbacks in court.
This is yet another victory for Microsoft, and it comes merely days after the U.S. FTC failed to secure an injunction against the merger. The next — and supposedly final — challenge for Microsoft will be convincing the FTC commissioners to agree to a settlement. The merger was originally scheduled to close on July 18, but the parties extended that deadline to October 18. The latest FTC move comes merely a day after Microsoft and Activision urged the agency to drop its bid at blocking the deal.
While the road ahead for Microsoft's blockbuster gaming acquisition looks rosy in the U.S., the stern opposition it faced from the U.K.'s Competition and Markets Authority (CMA) also appears to have mellowed down. After officially blocking the merger deal in April 2023, the CMA also pushed the deadline for its final decision to August last week after Microsoft and Activision reached an agreement with the market regulatory authority.
What lies ahead for Microsoft?
The primary concern regarding the acquisition was that Microsoft could leverage its strengthened portfolio of Activision games to gain an unfair edge in the market by limiting them to its Xbox platform, both on consoles and the cloud gaming segment. Microsoft quickly moved to allay some of those concerns, inking a deal with Nintendo to offer "Call of Duty" — one of the biggest gaming franchises out there — on the Switch and future platforms for 10 years. To answer concerns about cloud gaming dominance, Microsoft also signed a similar deal with Nvidia to keep the franchise on its cloud-based game streaming platform which competes with Microsoft's own Xbox-branded game streaming service.
Sony, however, was reluctant to take the deal and was also one of the biggest opponents of the merger with the future of PlayStation at stake. However, Sony also accepted the "Call of Duty" offer in July 2023. While the U.S. antitrust regulators were more concerned with the console and PC-based gaming market, the U.K.'s competition watchdog has strongly focused on the cloud gaming landscape, too.
But given the extremely small share of cloud gaming in the larger picture of the acquisition's immediate after-effects, it would be easier for Microsoft to convince the CMA on statistical grounds, as well. Microsoft is yet to issue a statement on the latest FTC decision to withdraw its in-house trial, but it appears that the biggest gaming industry acquisition ever is nearing completion by the end of this year.