When Microsoft announced its intentions to purchase software development company, Activision Blizzard, it made massive waves across the video game industry. It made sense why, because how can the potential purchase of the producer of Call of Duty, World of Warcraft, and Candy Crush not be seen as a big deal? Especially for a number that was close to $70 billion. If this deal goes through, it would not only be the largest purchase in the history of video games but one of the largest company mergers we have ever seen.
Unsurprisingly, with a purchase this big it was going to get a pretty deep look from the Federal Trade Commission to make sure it wasn’t considered a monopoly or require an antitrust suit. Microsoft has been adamant since the announced purchase that not only should this not be considered a monopoly, but that it would make efforts to ensure that it was being fair to competitors. They’ve already made moves to try and prove that by saying Activision franchises like Call of Duty would remain on PlayStation. For the FTC those assurances have not been enough, because on Thursday the FTC sued Microsoft in an attempt to block the purchase, via The Washington Post.
In a sourced report from the Washington Post, it was explained that the reasons behind the FTC’s lawsuit are not only because of the fairness for current console competitors to Microsoft such as Sony and Nintendo but also in regards to the future of gaming. With Microsoft spending the last few years investing so heavily into non-traditional areas such as the cloud and subscription services, the FTC reportedly sees the purchase of Activision Blizzard as a way to give Microsoft an advantage in those two areas in particular. Both Microsoft and the FTC released statements in response to the lawsuit.
Microsoft President Brad Smith signaled that the company would fight the lawsuit, saying in a statement that the company has “been committed since Day One to addressing competition concerns.” “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,” Smith said.
“Microsoft has already shown that it can and will withhold content from its gaming rivals,” said Holly Vedova, the FTC’s Bureau of Competition director, said in a news 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.”
What’s important to note here is this lawsuit does not ensure the deal is off. All it means is that Microsoft is going to have to come up with a pretty good defense for why their purchase should go through. How well they do that will determine if Activision remains independent or is eventually purchased.