Activision Blizzard, Microsoft’s blockbuster acquisition, is encountering problems left, right, and center. The next headache for Microsoft comes from its home market, just weeks after the European Commission announced that it was looking into the deal because of concerns that it would significantly affect fair competition in the gaming market. According to Politico, the FTC will “likely” file an antitrust lawsuit to prevent the acquisition.
The UK’s Competition and Markets Authority announced its own investigation into the deal in October, citing competition concerns. Microsoft responded to the CMA investigation by claiming that the agency’s concerns were unfounded. The company also claimed that Sony’s PlayStation platform had more than double the user installation base of Xbox.
In addition, Sony recently gained Bungie, a major game studio of its own.
Microsoft claims that Sony’s console has led the console market for nearly two decades and that its clout with game developers is so strong that it has contractually barred Activision from publishing “Call of Duty” titles on the Xbox Game Pass subscription service for several years.
Microsoft also claims that, rather than crying antitrust tears over the deal, Sony can compete by putting more PlayStation titles on its own PlayStation Plus subscription service, which is significantly more expensive than Xbox. Sony also stated that the PlayStation platform has nearly five times as many exclusive titles — both in-house and third-party — as the Xbox platform.
Microsoft’s problems appear to be spreading to its home market. According to the aforementioned report, which cites “three people with knowledge of the matter,” the impending lawsuit plans are not yet set in stone because the agency’s commissioners have yet to vote on the matter, and they have also yet to meet with legal representatives from either company. According to Politico, “the FTC staff reviewing the deal are skeptical of the companies’ arguments,” which does not bode well for Microsoft.
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The FTC is currently investigating the impact of the deal and has already met with Microsoft CEO Satya Nadella and Activision Blizzard’s former CEO Bobby Kotick. Notably, the FTC’s antitrust lawsuit could be filed as early as next month, according to the report. The main worry is that by acquiring a gaming behemoth like Activision Blizzard, Microsoft will gain an unfair advantage in the gaming market.
Rival Sony claims that Microsoft will make popular Activision titles, such as “Call of Duty,” “World of WarCraft,” “Diablo,” and “Overwatch,” exclusive to its Xbox and Windows platforms in the future. In the long run, however, Microsoft’s Xbox division chief Phil Spencer has expressed a willingness to distribute games on as many platforms as possible, including Sony’s PlayStation.