TAMPA, Fla. (WFLA) — The U.S. Federal Trade Commission announced an effort to block Microsoft from its planned $69 billion purchase of gaming company Activision Blizzard. Activision Blizzard is known for popular gaming franchises “Call of Duty” and “World of Warcraft.”
Microsoft, the originator of the Xbox and its subsequent consoles, is a combination of tech giant, computer company and game developer, with a stable of other big-name studios such as Bethesda Softworks, Mojang, Obsidian Entertainment, and multiple others.
The FTC’s announcement of their complaint in federal court specifically highlighted how Microsoft had acquired ZeniMax, which owns Bethesda, saying that it used “valuable gaming content to suppress competition from rival consoles,” pointing to two Bethesda game titles, “Starfield” and “Redfall,” as examples due to their status as console-exclusives.
“Microsoft has already shown that it can and will withhold content from its gaming rivals,” Holly Vedova, Director of the FTC’s Bureau of Competition, said. “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.”
While Microsoft’s planned acquisition of Activision Blizzard was a big merger of gaming companies, it’s not the only purchase and merger to go through among the gaming and tech giants of the world.
Sony, known for its PlayStation content and consoles, also purchased or merged with well-known studios Savage Games and Bungie Studios in 2022, in addition to having a cloud-based gaming library.
Microsoft’s Xbox Game Pass and Sony’s PlayStation Plus are both used via subscription to allow access to a large library of titles.
Still, the FTC said their effort to block the Microsoft-Activision Blizzard move was in order to preserve competition in the gaming market.
“Activision currently has a strategy of offering its games on many devices regardless of producer. But that could change if the deal is allowed to proceed,” the FTC said in its announcement. “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.”
The FTC said these potential outcomes would all be harmful to consumers. The administrative complaint from the FTC was approved on a 3-1 vote, with Commissioner Christine S. Wilson voting no on proceeding in the block attempt.
The proposed merger isn’t the only instance in 2022 of the federal government stepping in to prevent a potential monopoly. In November, a proposed merger of book publishers Penguin Random House and Simon & Schuster was shut down by a federal judge after a legal challenge from the Department of Justice. Additionally, the FTC announced actions in October to block Meta, Facebook’s parent company, from buying Within Limited, a virtual reality company in California.
The Microsoft-Activision Blizzard takeover, contested by the FTC is, at least for now, on hold pending litigation in federal court.