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The US Federal Trade Commission To Block Microsoft Xbox Acquisition Of Activision Blizzard
The United States Federal Trade Commission (FTC) is seeking to block Microsoft Xbox from acquiring Activision Blizzard for US$68.7 billion. The reason for FTC’s decision is because they claim that the Microsoft Xbox Activision Blizzard deal would give them too much of a monopoly in the games industry and “would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business”.
In the official complaint, the FTC pointed out Microsoft’s “record of acquiring and using valuable gaming content to suppress competition from rival consoles,” including its previous acquisition of ZeniMax, the parent company of Bethesda Softworks. They added that “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”.
Holly Vedova, Director of the FTC’s Bureau of Competition, said:
“Microsoft has already shown that it can and will withhold content from its gaming rivals. 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.”
The rest of the FTC’s announcement reads:
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 a combined 154 million 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.
Microsoft originally announced its acquisition of Activision Blizzard in January 2022.
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