The acquisition of gaming juggernaut Activision Blizzard by Microsoft was announced to be challenged by the FTC on Thursday.
Back in January, Microsoft announced plans to pay $68.7 billion to acquire the organization, which has been dogged by claims of sexual harassment and discrimination as well as labor issues.
Activision Blizzard owns immensely popular games like the Call of Duty franchise and World of Warcraft, so the deal would represent a seismic shift for the gaming industry. However, due to the size of the transaction and the general anti-consolidation sentiment, the deal was destined for close regulatory scrutiny from the outset.
The deal will “allow Microsoft to discourage competitors” to Xbox, including its for-profit Game Pass subscription service and cloud gaming services, according to the FTC’s statement. Microsoft has already demonstrated its ability to and willingness to withhold content from its gaming rivals, according to Holly Vedova, director of the FTC’s Bureau of Competition.
Today, we work to prevent Microsoft from seizing control of a top independent game development firm and abusing it to undermine rivalry in a number of vibrant and quickly expanding gaming marketplaces.
Sony, the company that makes the PlayStation gaming console and a competitor of Microsoft’s, has vehemently opposed the proposed merger that would combine some of the most well-known games in the world under the Xbox brand.
Microsoft has been seeking to fend off the regulatory threat in recent weeks by pledging to treat Call of Duty equally on the PlayStation and even vowing to bring the property to Nintendo if the agreement is successful.
On Thursday afternoon, Activision Blizzard CEO Bobby Kotick informed staff that the purchase was still moving forward despite the FTC’s objections.
Kotick stated, according to a statement given to TechCrunch, “This sounds scary, therefore I want to underline my confidence that this deal will close.”
The claim that this agreement is anti-competitive is unfounded, and we anticipate winning this legal battle.
Brad Smith, the president of Microsoft, also commented on the FTC’s ruling, claiming that the agreement will open up new prospects rather than impede competition.
