FTC is looking into Microsoft's $68.7 billion Activision deal

nanoguy

Posts: 1,206   +20
Staff member
In brief: Microsoft's decision to purchase video game publisher Activision Blizzard came as a big shock, but the deal won't be completed until 2023. In the meantime, regulators are looking into potential antitrust issues just as they're preparing an overhaul of merger guidelines in light of new market realities.

Unlike other tech giants like Apple, Google, Facebook, and Amazon, Microsoft has managed to avoid a lot of regulatory scrutiny, especially when it comes to acquisitions. Last month, the Redmond giant announced it was buying video game publisher Activision Blizzard for $68.7 billion — its largest acquisition to date, and something the FTC is now looking into for its potential to harm competition in the gaming industry.

If it goes through, the deal will transform Microsoft into the third-largest video game company after Tencent and Sony. Previously, the company also acquired Minecraft developer Mojang, Psychonauts 2 maker Double Fine Productions, and Bethesda Softworks. Seeing as Microsoft has been on a buying spree, it’s no surprise this has attracted the attention of regulators, and it appears the Department of Justice is letting FTC do the investigation in this case.

It’s also worth noting the FTC and the DOJ are planning to do a review of merger guidelines to see whether they are overly permissive. The move was announced earlier this month in light of an increasingly concentrated tech industry and a surge in merger filings in 2020 and 2021, with many signs pointing to a continuation of this trend in the coming years.

Microsoft isn’t the only company making strategic acquisitions as of late, with Take-Two Interactive also looking to buy Zynga for $12.7 billion. This week, Sony agreed to purchase Bungie, the developer behind Halo: Combat Evolved and Destiny 2 for $3.6 billion. And while Sony PlayStation CEO Jim Ryan says the acquisition wasn’t a response to other big acquisitions announced this year, it’s hard not to look at this as a rapid consolidation of the video game industry.

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Dimitriid

Posts: 2,206   +4,244
Of course it's accelerating into a monopoly, anyone can see that. The issue here is that Microsoft can quickly just point and Disney and win in a summary judgement because of course they would point the obvious: Why it has been ok for Disney but wouldn't be ok for Microsoft?

Obviously it's not ok for either of them to become unstoppable entities of audiovisual and videogame devourment respectively so preventing Microsoft from buying Acti should mean that a push to break up Disney should be forthcoming, yet it wont be.

I think that unlike the Nvidia-Arm deal this one will pass but hey, it might not: If there's anything we can take for certain is the hypocrisy and ignorance surrounding anything related to videogames.
 

dangh

Posts: 576   +913
I don't think this will be stopped, and I dont think MS is done wuth shopping. They need a solid leverage to shove GP everywhere, so then they will be just collecting money from being middleman and control it from monopolistic position.
There should be some upper limit for company's wealth. You reach it, do the split. Otherwise we will get unmovable corpos more powerful than countries and absolutely nobody will gain on that.
 

Theinsanegamer

Posts: 3,364   +5,590
Of course it's accelerating into a monopoly, anyone can see that. The issue here is that Microsoft can quickly just point and Disney and win in a summary judgement because of course they would point the obvious: Why it has been ok for Disney but wouldn't be ok for Microsoft?

Obviously it's not ok for either of them to become unstoppable entities of audiovisual and videogame devourment respectively so preventing Microsoft from buying Acti should mean that a push to break up Disney should be forthcoming, yet it wont be.

I think that unlike the Nvidia-Arm deal this one will pass but hey, it might not: If there's anything we can take for certain is the hypocrisy and ignorance surrounding anything related to videogames.
Can you explain why microsoft buying one publisher, out of the dozens of AAA publishers and literal thousands of game developers in existence, constitutes a "monopoly"?

*noun: monopoly; plural noun: monopolies; noun: Monopoly

the exclusive possession or control of the supply of or trade in a commodity or service.
"his likely motive was to protect his regional monopoly on furs"8

MS does not have exclusive control of gaming, not even close.
 

passwordistaco

Posts: 207   +501
Can you explain why microsoft buying one publisher, out of the dozens of AAA publishers and literal thousands of game developers in existence, constitutes a "monopoly"?
Dozens of AAA publishers?

EA
Ubisoft
Square Enix
Sony
MIcrosoft
Take Two
???

Probably about 1/2 dozen. Not approaching a monopoly, but quickly moving toward a duopoly or triopoly(?).

"Looking into" usually means the palms that need to be greased are quietly making contact with the companies involved.
 
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Theinsanegamer

Posts: 3,364   +5,590
Dozens of AAA publishers?

EA
Ubisoft
Square Enix
Sony
MIcrosoft
Take Two
???

Probably about 1/2 dozen. Not approaching a monopoly, but quickly moving toward a duopoly or triopoly(?).

"Looking into" usually means the palms that need to be greased are quietly making contact with the companies involved.
atlus publishing
aspyr
acquire
THQ nordic
from software
gearbox
GoG
maximum games
warner bros
namco bandai
capcom
EPIC
tencent

All of these have published big games in the last 10 years and are still active.

In the age of digital distribuiton, the need for a "publisher" has been greatly diminished. Physical releases no longer need to be bankrolled, or at all. Marketing can be done by terminally online zoomers on youtube and tiktok. Crowdfunding eliminated the need for up front capital.

Crying about MS buying one of the old guard is liek whining about big coal buying up one of the old peat moss providers. It's an industry where the big players are increasingly irrelevant to the newer generations, they only thing the old guard is putting out is sludge. Let them eat each other.
 

Lew Zealand

Posts: 2,147   +2,587
TechSpot Elite
Disney has already blazed an IP purchasing trail for all others to follow. In addition to their copyright law trailblazing, of course. Those guys know how to business and they're showing everyone else how to do it.

MS-ActiBliz is a done deal.
 

seeprime

Posts: 677   +886
Of course it's accelerating into a monopoly, anyone can see that. The issue here is that Microsoft can quickly just point and Disney and win in a summary judgement because of course they would point the obvious: Why it has been ok for Disney but wouldn't be ok for Microsoft?

Obviously it's not ok for either of them to become unstoppable entities of audiovisual and videogame devourment respectively so preventing Microsoft from buying Acti should mean that a push to break up Disney should be forthcoming, yet it wont be.

I think that unlike the Nvidia-Arm deal this one will pass but hey, it might not: If there's anything we can take for certain is the hypocrisy and ignorance surrounding anything related to videogames.
I don't think pointing at Disney will help MSFT obtain a favorable summary judgment. Disney has nothing to do with the potential for Microsoft to take advantage of their upcoming position, if it is allowed. It could be a tough sell. We'll see what compromises are made.
 

BigRedPDX

Posts: 271   +191
The FTC isn't going to stop this. Microsoft has been sued at least once for monopolizing the market. They have been well known for this. We'll see how this merger plays out.
 

Lounds

Posts: 1,120   +1,020
If anything is proven it's that US politicians and governing body's can be bought an influenced.

I'm just glad the Nvidia Arm deal fell through.
 

toxicfiend

Posts: 53   +17
Just like Rock and Roll died in the late 60's and no one knew, gaming is dead
Really gaming is dead huh $180.3 billion last financial year and it will continue as people love games its a part of our existence be it board games physical games like hide and seek football cricket tennis you name it people love to play and video games and no you are wrong about rock and roll it never died out.
 

RudyBob

Posts: 561   +521
Really gaming is dead huh $180.3 billion last financial year and it will continue as people love games its a part of our existence be it board games physical games like hide and seek football cricket tennis you name it people love to play and video games and no you are wrong about rock and roll it never died out.
And the sales of music is through the roof and more ways to buy it then ever. You didn't "get it".
 

ZedRM

Posts: 1,027   +720
Any such deal requires regulatory clearance. An investigation doesn't point one way or the other.
Not true. Deals of anti-trust concerns and values above a certain level require investigation and clearance. In this case it is the anti-trust concerns as Microsoft is a trillion dollar company and such a deal presents a very serious concern of monopoly, or near-monopoly, market conditions.
 

BigRedPDX

Posts: 271   +191
Not true. Deals of anti-trust concerns and values above a certain level require investigation and clearance. In this case it is the anti-trust concerns as Microsoft is a trillion dollar company and such a deal presents a very serious concern of monopoly, or near-monopoly, market conditions.
However that doesn't mean it's actually "shut down." They still need to investigate and come up with a verdict. It's just an investigation.
 

ZedRM

Posts: 1,027   +720
Really would you have the opinion if Sony had bought them I hope Microsoft deal does go through and improve Activision work ethics and treat people properly.
Of course. Activision/Blizzard needs to stay an independent company.
 

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