Friday, December 9th 2022
FTC Seeks to Block Microsoft's Acquisition of Activision Blizzard
The Federal Trade Commission is seeking to block technology giant Microsoft Corp. from acquiring leading video game developer Activision Blizzard, Inc. and its blockbuster gaming franchises such as Call of Duty, alleging that the $69 billion deal, Microsoft's largest ever and the largest ever in the video gaming industry, would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.
In a complaint issued today, the FTC pointed to Microsoft's record of acquiring and using valuable gaming content to suppress competition from rival consoles, including its acquisition of ZeniMax, parent company of Bethesda Softworks (a well-known game developer). Microsoft decided to make several of Bethesda's titles including Starfield and Redfall Microsoft exclusives despite assurances it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles.
"Microsoft has already shown that it can and will withhold content from its gaming rivals," said Holly Vedova, Director of the FTC's Bureau of Competition. "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."
Microsoft's Xbox Series S and Series X are one of only two types of high performance video game consoles. Importantly, Microsoft also offers a leading video game content subscription service called Xbox Game Pass, as well as a cutting-edge cloud-based video game streaming service, according to the complaint.
Activision is one of only a very small number of top video game developers in the world that create and publish high-quality video games for multiple devices, including video game consoles, PCs, and mobile devices. It produces some of the most iconic and popular video game titles, including Call of Duty, World of Warcraft, Diablo, and Overwatch, and has millions of monthly active users around the world, according to the FTC's complaint. 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. 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, resulting in harm to consumers.
The Commission vote to issue the complaint was 3-1, with Commissioner Christine S. Wilson voting no. A copy of the administrative complaint will be available shortly.
NOTE: The Commission issues an administrative complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The issuance of the administrative complaint marks the beginning of a proceeding in which the allegations will be tried in a formal hearing before an administrative law judge.
The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about how competition benefits consumers or file an antitrust complaint. For the latest news and resources, follow the FTC on social media, subscribe to press releases and read our blog.
In a complaint issued today, the FTC pointed to Microsoft's record of acquiring and using valuable gaming content to suppress competition from rival consoles, including its acquisition of ZeniMax, parent company of Bethesda Softworks (a well-known game developer). Microsoft decided to make several of Bethesda's titles including Starfield and Redfall Microsoft exclusives despite assurances it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles.
Microsoft's Xbox Series S and Series X are one of only two types of high performance video game consoles. Importantly, Microsoft also offers a leading video game content subscription service called Xbox Game Pass, as well as a cutting-edge cloud-based video game streaming service, according to the complaint.
Activision is one of only a very small number of top video game developers in the world that create and publish high-quality video games for multiple devices, including video game consoles, PCs, and mobile devices. It produces some of the most iconic and popular video game titles, including Call of Duty, World of Warcraft, Diablo, and Overwatch, and has millions of monthly active users around the world, according to the FTC's complaint. 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. 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, resulting in harm to consumers.
The Commission vote to issue the complaint was 3-1, with Commissioner Christine S. Wilson voting no. A copy of the administrative complaint will be available shortly.
NOTE: The Commission issues an administrative complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The issuance of the administrative complaint marks the beginning of a proceeding in which the allegations will be tried in a formal hearing before an administrative law judge.
The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about how competition benefits consumers or file an antitrust complaint. For the latest news and resources, follow the FTC on social media, subscribe to press releases and read our blog.
52 Comments on FTC Seeks to Block Microsoft's Acquisition of Activision Blizzard
Microsoft bought and created studios in the past only to mostly destroyed everything.
This is American lobbying at it's finest.
Sony grew their own studios, mostly small aquisitions, they really haven't done any major acquisitions and certainly not even remotely to this one or this values. What did they bought of big value in the last decade, bungie and insomniac that was already working for them.
Its going to fall apart one way or another, because they've systematically been milking every franchise and the customer is starting to walk away. If CoD falls apart, the company will die. Good riddance, have fun re-releasing your utter shite on mobile.
I wonder how long it'll take before the penny drops in board rooms that gaming relies on solid, fun, care/worry free content. Not cash shops in disguise constantly begging for your real life dollar with releases that come and go on yearly basis. That trick won't last, it didn't for the MMO, and it won't for the always online content that turns out to be thin air because customers have no control. Good franchises manage to get people invested in them. Why invest in temporary things?- Sony is not multiplatform and they don't own a lot of studios even on their own platform. They are just successful with Playstation.
- Microsoft combines control over gaming content with control over the OS Windows (PC) AND the hardware + OS (Xbox). Meanwhile, it covers content that is created by independent developers, while it also owns its own studios.
- Tencent is just content, not hardware IP.
Its not just about market share development, its about influence on the market that would create an unfair competitive position.
For similar reasons the US was talking about splitting up big tech like Alphabet/Google and Facebook, yet that situation still exists while being in effect the same thing: the role of judge, jury and executioner for said company within their business.
It's up to Nintendo and Sony to come up with something like this. Gamepass might not be profitable right now, is supposed to be soon.
But i guess you're missing the point, the problem isn't GP, the problem is GP, and xbox, and windows, and billion dollar acquisitions, etc, a endless money pit. The problem is the package.
They bought Obsidian a while back, they're still out there making great games.
In addition, as has been pointed out, Valve and Sony both have bought up studios. How do you think that Portal, Left 4 Dead, Counterstrike, etc... came about?
The difference with other companies is that they can lose money for as long as it takes to achieve their objective.
The trial will hopefully shed some light around the massive money black hole that's Game Pass and Xbox. People may realize by then and with hard facts how Microsoft is shaping a market running on a deficit mostly shown by not having any meaningful release this year and having only one (minor) nomination to The Game Awards.
Yeah game pass 10-15.us per month for ultimate is just a drop in the bucket for most adults/ kids these days
I'll never do either but that's just myself, plenty of others will jump on it and just play what ms allows to keep their kids busy with blood soaked violence :laugh:
It's just my viewpoint based on the comments in this thread. I guess I should have just posted two separate comments, so you could attack them individually.
Also I am surprised by FTC stance, since many FTC decisions were political ones, aimed at support of home grown industry. From USA POW, Sony is a foreign entity.