The Federal Trade Commission is suing to block Microsoft’s acquisition of Activision Blizzard. The pending $68.7 billion deal would be the largest in video game history and see Microsoft take control of some of the most popular video game franchises on the planet, including Warcraft and Call of Duty.
Over the past five years, Microsoft has used its vast cash reserves to buy its way into a more competitive spot in the video game market. It bought Mojang, makers of Minecraft, in 2014 for more than $2 billion. It purchased Elder Scrolls, Doom, and Quake franchise publishers ZeniMax Media in 2021 for more than $7 billion. In January, it announced its intention to purchase Activision Blizzard but has yet to finalize the deal.
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The Call of Duty franchise seems to be one of the deal’s sticking points. Microsoft wants to build out Game Pass and to make it an attractive subscription service for gamers, and to do that it needs exclusive titles. The upcoming Bethesda RPG Starfield, for example, will appear on PC and Xbox consoles, but not rival PlayStation 5. The massive cross-platform Call of Duty franchise, though, is on another level entirely.
Microsoft has tried to alleviate regulators’ monopoly fears by promising it would keep Call of Duty available on rival platforms, for now. Earlier this week, Microsoft Vice Chairman Brad Smith published an op-ed in The Wall Street Journal claiming that the acquisition would be good for gamers and that the company had offered Sony a promise to keep Call of Duty on the PlayStation for the next 10 years. It said it would cut similar deals for Valve’s steam platform and the Nintendo Switch. The last promise seemed especially bizarre and desperate, because Nintendo is famously averse to violent games and its Switch hardware would no doubt have serious trouble running Call of Duty.
The FTC isn’t buying it. “Microsoft has already shown that it can and will withhold content from its gaming rivals,” Holly Vedova, the director of the FTC’s Bureau of Competition said in a press release. “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.”
For now, Microsoft’s plans are on hold while the lawsuit works its way through the legal system. “We continue to believe that our deal to acquire Activision Blizzard will expand competition and create more opportunities for gamers and game developers,” Smith said on Twitter in response to the lawsuit. “We have been committed since Day One to addressing competition concerns, including by offering earlier this week proposed concessions to the FTC. While we believe in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present it in court.”
