about 1 year ago • 2 mins
The Federal Trade Commission (FTC) announced plans to sue to block Microsoft’s mega acquisition of Activision late last week.
What does this mean?
Back in dark, damp January, Microsoft dropped a bombshell, announcing a $70 billion deal to acquire Activision Blizzard – the biggest ever acquisition for the old-school tech titan, which would see it become the third-biggest gaming company in the world by revenue. But as the deal made waves, regulators began to take notice: see, Activision is one of the few game developers that publishes top games – like Call of Duty and World of Warcraft – across multiple devices and consoles. So this deal would give Microsoft the power to crush competition by manipulating prices, lowering quality on competing consoles, or even withholding content from competitors. And the FTC has a point: Microsoft already made two upcoming Bethesda titles exclusive to its own platforms, despite promising EU regulators it wouldn't.
Why should I care?
Zooming in: Obstacles in spades.
Microsoft has been trying to work its way into regulators’ good books, signing a 10-year deal last week to bring Call of Duty to Nintendo for the first time in a decade. Given the game’s $30 billion lifetime sales, that’s a big step, but it hasn't been enough to satisfy regulators. And with UK and EU authorities side-eyeing the acquisition too, Microsoft could be in for a tough fight. After all, the FTC objected to Nvidia's purchase of ARM this time last year, and we all know how that turned out.
The bigger picture: The FTC means business.
The FTC is coming in hot, having promised to take on Big Tech's market power in a bid to root out anti-competitive practices in the US. The regulator has already nixed the merger between Lockheed Martin and Aerojet Rocketdyne Holdings this year, plus the Nvidia deal, and it’s heading to court this week to stop Meta buying a virtual reality startup.
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