Microsoft’s acquisition of Activision Blizzard is currently set to be reviewed by the US Federal Trade Commission. The gaming industry is still reeling from the effects of Microsoft’s announcement that it will be purchasing Activision Blizzard for $68.7 billion, and the ramifications of this deal are still being discussed within fan communities and industry professionals, especially considering Microsoft’s previous acquisition of Bethesda Softworks and its parent company ZeniMax the year prior.
Activision Blizzard, the publisher behind Call of Duty, Overwatch, and World of Warcraft to name a few, has been under heavy fire since August 2021 when the company entered a lawsuit with California State agencies regarding its business practices and its derogatory treatment of its employees, particularly women and people of color. The company’s CEO, Bobby Kotick, has been at the epicenter of this controversy due to his alleged negligence of these issues, some of which he is said to also be guilty of.
In an article published by Bloomberg, it was confirmed that the FTC will be overseeing Microsoft’s acquisition of Activision Blizzard to investigate any antitrust issues and whether this deal will harm competition. Both Microsoft and the FTC declined to comment after this news was revealed to the public.
Head of the FTC, Lina Khan, has stated that the FTC has advocated for more forceful approaches to reviewing these types of deals to have a firm grasp of whether these giant tech companies should be allowed to pursue such massive acquisitions. This was what prompted the FTC to block Nvidia from purchasing UK-based chip firm Arm for $40 billion last year.
On the topic of whether this move would harm competition, the FTC is fully within its right to investigate this acquisition, as swallowing an entire publisher is sure to raise concerns of what and how Microsoft will utilize Activision Blizzard’s assets, and to what end. This was a topic previously discussed when The Walt Disney Company bought out 20th Century Fox, the effects of which are still being debated today due to the company's subsequent media dominance.
With news of Sony purchasing Bungie, a former company associated specifically with the Xbox brand, it seems that major acquisitions of giant studios and publishers are slowly becoming the norm for the gaming industry. Whether this will benefit the industry in the long run remains to be seen going forward.
Source: Bloomberg