What you need to know
- Microsoft is attempting to purchase Activision Blizzard for $69 billion.
- The deal is undergoing regulatory scrutiny around the world.
- The FTC is suing to block Microsoft's acquisition of Activision Blizzard.
- Microsoft and Activision have indicated they will fight for the deal in court.
Microsoft's biggest acquisition ever has hit a snag as the deal will have to be fought for in court.
The Federal Trade Commission (FTC), the U.S. regulatory authority, announced on Thursday that it is suing to block Microsoft's purchase of Activision Blizzard. The deal, valued at almost $69 billion, would see Microsoft add Activision Publishing, Blizzard Entertainment, and King to the existing Xbox first-party development teams.
In its press release, the FTC points to Microsoft making Starfield and Redfall exclusive games as a reason that Microsoft cannot be trusted. Both games, in development at Bethesda Game Studios and Arkane Austin respectively, are new IPs that are being developed exclusively for Xbox Series X|S and Windows PC.
“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.”
The FTC is filing its suit within its own administrative courts, not federal court. The agency has not sought a preliminary injunction, meaning technically Microsoft and Activision Blizzard can still finish the merger, though at the risk of not having regulatory approval.
In recent weeks, Microsoft took several steps to sway regulators that the deal was good for gaming as a whole. Microsoft worked out a neutrality deal with the Communication Workers of America (CWA), agreeing to not interfere with Activision Blizzard employees' right to unionize starting 60 days after the acquisition closed.
Building on this agreement, Microsoft is allowing Bethesda Softworks employees to unionize, with over 300 quality assurance staff across the publisher's U.S. studios voting on whether or not to organize.
"We continue to believe that this deal will expand competition and create more opportunities for gamers and game developers. We have been committed since Day one to addressing competition concerns, including by offering this week proposed concessions to the FTC," said Microsoft president Brad Smith. "While we believed in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present our case in court."
Microsoft recently signed an agreement committing to 10 years of Call of Duty support on Nintendo consoles and on Steam.
In a statement to Activision Blizzard employees that was provided to Windows Central, Activision Blizzard CEO Bobby Kotick stated that "This sounds alarming, so I want to reinforce my confidence that this deal will close. The allegation that this deal is anti-competitive doesn't align with the facts, and we believe we’ll win this challenge."
