FTC Aims to Block $69B Microsoft-Activision Blizzard Deal

The Federal Trade Commission (FTC) is moving to block Microsoft’s acquisition of Activision Blizzard.

The agency said in a Thursday (Dec. 8) press release that the Xbox maker’s purchase of the video game developer’s franchises would harm competition in both gaming consoles and subscription services.

The $69 billion deal would enable Microsoft to limit its rivals’ access to Call of Duty, World of Warcraft, Diablo, Overwatch and other top video game franchises, the FTC said.

The agency noted that Microsoft did this when it acquired ZeniMax, the parent company of game developer Bethesda Softworks, and then made several of Bethesda’s titles Microsoft exclusives.

“Microsoft has already shown that it can and will withhold content from its gaming rivals,” FTC Bureau of Competition Director Holly Vedova said. “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.”

Microsoft did not immediately reply to PYMNTS’ request for comment.

Activision Blizzard CEO Bobby Kotick said in a letter to employees posted on the company’s website that the allegation that the deal is anti-competitive is false, that he believes the company and Microsoft will win the challenge and that he is confident the deal will close.

He added that a combined Microsoft-Activision Blizzard “will be good for players, good for employees, good for competition and good for the industry.”

“Our players want choice, and this gives them exactly that,” Kotick said in the letter.

He pointed to an internal email to Activision Blizzard staff, posted on the company’s website, that said Microsoft has promised not to make Call of Duty exclusive to Xbox, that doing so doesn’t make good business sense, that Call of Duty faces more competition every day and that Activision Blizzard employees are excited about partnering with Microsoft.

“We believe these arguments will win despite a regulatory environment focused on ideology and misconceptions about the tech industry,” Kotick said in the Thursday letter.

As PYMNTS reported in September, the Microsoft-Activision Blizzard deal would be the largest ever for both gaming and Microsoft and would make Microsoft the third-biggest gaming company in the world.