Saturday, December 3, 2022

The FTC May Move To Block Microsoft’s Monster Activision Blizzard Acquisition

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Modern Warfare 2

Just as Microsoft has been doing battle with UK and EU regulators over its Activision Blizzard Acquisition for months, a new final boss may be about to enter the arena.

According to a new report from Politico, the FTC is gearing up to file an antitrust lawsuit with the aim of blocking Microsoft’s $69 billion acquisition of Activision Blizzard, which would be the largest the video game industry has seen by far.

While it is not a guarantee that a lawsuit will be filed, the reporting indicates that things are moving in that direction, and the main point of concern is that the deal would give Microsoft an “unfair boost” in the video game market.

If this does happen, we are likely in for a protracted legal battle, and one that may replicate many of the same arguments we’ve already seen from the parties involved.

The EU and UK regulators have taken to almost directly parroting Sony talking points, centered on how this deal would allow Microsoft full ownership of one of the biggest, most profitable IPs in gaming, Call of Duty, and allow them to potentially restrict Sony, its biggest competitor, from access to the game.

Modern Warfare 2

Microsoft, meanwhile, has said a seemingly infinite number of times they have no plans to take Call of Duty off PlayStation, and will even sign a ten year contract with them to ensure that doesn’t happen. They would treat it like Minecraft, a previous acquisition that never left the platforms it always existed on.

This debate has been extraordinarily obnoxious for actual video game fans following along as these regulatory bodies barely seem to grasp the industry and both companies are making misleading, often hypocritical statements to support their respective causes.

Sony has been doing exclusivity arrangements with special perks for Call of Duty with Activision for ages now, but is accusing Microsoft of potentially doing the same thing after the acquisition. Sony also just said this deal could mean Microsoft could end up raising hardware or software prices in a less competitive market when it’s Sony who just raised prices of the PS5 in some regions and they have been the primary force behind pushing a price increase to $70 games this generation.

Microsoft is not blameless here either, with CEO Satya Nadella saying things like “let us compete” when talking about his company purchasing a video game publisher with a market cap nearly as high as all of Sony itself. Microsoft has been downplaying its own games and series saying that Sony is just in a way, way better position with its IPs, but have given excuses about why their other acquisition deals have resulted in exclusive games for Xbox when this one won’t in Call of Duty’s case. Recently, Microsoft just tried to say that “big” games would stay multiplatform which may not include “mid-size” games like the upcoming Elder Scrolls VI and Starfield. Mid…size. Sure, okay.

It’s an exhausting fight between the two parties with very bad arguments on both sides. But from the regulatory inquiries so far, it feels like Microsoft may be slowly losing this battle, and if the FTC takes up Sony’s points in the same way as overseas, that could spell disaster for the deal. And if the deal is dead? That could do serious damage to Activision itself which is really, really banking on this going through, and a failure at this point could mean decimation for its game output and workers. Not that that’s a reason to approve it, but at this point, it’s certainly a possible outcome, given the reality of the situation.

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