The Federal Trade Commission (FTC) filed a lawsuit to stop Microsoft from buying Activision Blizzard for $69 billion, which would be the biggest deal in the video game business.
The FTC voted 3-1 on Thursday to sue, saying that the Xbox maker would have the “means and motive” to hurt Activision’s (ATVI) top games like Call of Duty, World of Warcraft, and Overwatch by changing their prices or making them less good. The Federal Trade Commission (FTC) warned that Microsoft (MSFT) could keep content from other systems.
Holly Vedova, who runs the FTC’s Bureau of Competition, said, “Microsoft has already shown that it can and will keep content from its gaming competitors.” “Today, we want to stop Microsoft from taking over a top independent game studio and using it to hurt competition in several fast-growing and dynamic gaming markets.”
The vote was one of the strongest things federal regulators have done in decades to limit the power of big tech companies, which was one of the commission’s main goals during the Biden administration.
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Is the FTC suing Microsoft?
The FTC pointed to Microsoft’s plan to buy Zenimax Media Inc. in 2021. The parent company of game developer Bethesda Softworks is proof that the company has a history of blocking content from competitors. After promising European antitrust authorities that it wouldn’t, Microsoft made several Bethesda games available only through Microsoft.
Activision Blizzard has over 400 million monthly active users (MAU) on different gaming platforms. No matter who made the platform. Microsoft’s Xbox is one of only two high-performance game consoles. And the FTC said that Microsoft would be motivated to take Activision’s games off of the other one, the Playstation.
Microsoft also has Xbox Game Pass, the most popular subscription service for game content at the start of this year, with 25 million users. The FTC was worried that the company could make Activision games available only through Game Pass to get more subscribers. The company hinted at this when it announced that it was buying the video game company.
This past quarter, Microsoft had a net income of $17.6 billion, which was 14% less than last year’s. In the past year, its stock has gone down 26%. Which is better than the 30% drop in the Nasdaq Composite.
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