Thursday, the US Trade Commission sues Microsoft in order to block the Activision Blizzard King Deal. Here are all the details.
Activision Blizzard King deal could be blocked after all
No topic has dominated the gaming news cycle this year as much as Microsoft’s planned acquisition of publisher Activision Blizzard King (ABK). Just a day after the head of Xbox Phil Spencer, announced that ABK’s biggest property, Call of Duty, would be available for Nintendo Platforms as well as PC game retailer Steam for the coming 10 years the US Federal Trade Commission (FTC) is now issuing an official complaint to Microsoft over the deal.
Back in January, Microsoft announced its plans to acquire ABK and all its properties for a sum of $68.7 billion USD. The news was received with mixed reception, especially by console market leader Sony and other figures in the industry. We now know from official documents, that the deal was built on the back of several serious sexual misconduct accusations against ABK staff and CEO Bobby Kotick. The deal was very much an attempt by ABK’s management to save a plummeting stock while Microsoft Xbox boss Phil Spencer saw an opportunity.
For those not in the know, ABK currently holds some of the biggest franchises in gaming. That includes World of Warcraft, Diablo, Overwatch, Candy Crush, and the important subject of all the discussion around it, Call of Duty. Just for reference, the most recent Call of Duty managed to surpass $1 billion in worldwide sales in just 10 days. That was back in early November. Some fear that Microsoft acquiring ABK would lead to Microsoft making future Call of Duty entries exclusive to their platforms and especially their service.
So the US Federal Trade Commission decided now issue a complaint to Microsoft to block the deal after regulators spoke with staff from Microsoft yesterday. FTC Bureau of Competition director Holly Vedova stated while announcing the complaint that, “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.” (via Washington Post)
According to the FTC, Microsoft already has a history of keeping desirable games from other platforms and cites upcoming titles like Starfield and Redfall as examples. Apparently, Microsoft had promised EU regulators that they would not hinder their IPs from coming to other platforms but we could not find a source on that. It is also likely that Sony straight up denied those titles since they would also be available on the Xbox Game Pass on launch day.
Some have also noted that the FTC sounds a lot like the arguments Sony Computer Entertainment has brought forth over the last year. The FTC also has undergone a massive change after tech critic Lina Khan became the commission’s chairwoman. With an aggressive stance towards antitrust enforcement that seeks to bring more of those deals to court. That means the ABK acquisition, which would be the largest acquisition of its kind in 20 years, is a very lucrative target to set an example with.
While it seems that the FTC has good intentions with the deal, the only one who’d stand to benefit from the deal being blocked would be Sony Computer Entertainment. The FTC also did not mention how Microsoft handled Minecraft since its acquisition in 2014, which is a franchise comparable to Call of Duty’s scale and install base. Minecraft, to this day, remains available on all platforms and receives regular updates on all of them. Both Microsoft and ABK have stated on numerous occasions that they intend to keep Call of Duty available on as many platforms as possible, as well as honor the contract Call of Duty currently has with Sony.
If this goes to court and successfully blocks the deal in the US and other countries, this could set a precedent in the games industry as we know it now. While Sony is probably happy about this news, this could potentially lead to the FTC taking a closer look at their business practices as well. It is left to be seen how this whole situation plays out, Microsoft has yet to make a formal response to the lawsuit but we’ll, of course, keep you updated on the situation.
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