FTC sues Microsoft in attempt to block Activision acquisition

Daniel Sims

Posts: 752   +28
Staff
What just happened? The drama over Microsoft's $69 billion attempt to purchase Activision Blizzard King has reached a new stage as the FTC has opened the biggest regulatory challenge Microsoft has faced in decades. The deal also faces pushback from British and European Union regulators.

The US Federal Trade Commission (FTC) announced on Thursday that it will sue to block Microsoft's acquisition of Activision. The lawsuit doesn't necessarily kill the deal, as Microsoft plans to fight it and stands a decent chance of winning.

The suit stems from fears that Microsoft might use the acquisition to hurt rivals like Sony by restricting or degrading access to Activision's properties like Call of Duty, World of Warcraft, or Overwatch. As evidence, FTC Bureau of Competition director Holly Vedova cited Microsoft's recent acquisition of Bethesda. Upcoming Bethesda titles like Starfield and Redfall won't have PlayStation versions.

The FTC fears Microsoft would harm competition by worsening the experience of Activision's games on rival platforms, changing their prices, or withdrawing them altogether. The commission's statements echo Sony's objections to the acquisition. Microsoft's primary rival in the console space has repeatedly voiced concerns that it would either degrade Call of Duty on PlayStation or withhold it entirely.

Microsoft continually denies Sony's claims. Earlier this week, Microsoft president and vice-chair Brad Smith said it would be "economically irrational" to stop releasing Call of Duty on PlayStation due to the number of customers who play it there. Smith also confirmed that Microsoft proposed a legally enforceable deal to keep the series available on Sony's console for 10 years.

Microsoft also announced a commitment to bring Call of Duty to Nintendo platforms if the deal succeeded. In response, Sony accused Redmond of diversion tactics and called Nintendo a platform for "younger audiences" (despite the Nintendo Switch featuring many mature-rated titles like Doom and Resident Evil).

Activision CEO Bobby Kotick is confident that Microsoft will defeat the lawsuit. In an internal company email, Kotick said the FTC's case is "focused on ideology and misconceptions about the tech industry."

The acquisition requires approval from regulatory bodies worldwide. So far, only Brazill, Saudi Arabia, and Serbia have consented. The UK and EU are closely scrutinizing the deal due to the same concerns Sony and the FTC expressed. Even if Microsoft prevails against its legal challengers, the proceedings could drag beyond the merger's expected closure date next summer.

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m4a4

Posts: 3,168   +4,247
TechSpot Elite
I'm sure they'll settle something out of court. I just don't know if this actually gives leverage to the FTC in any meaningful way...
Maybe it's for show, maybe they actually think they have something.

But from what I'm seeing, 10 years is a long time to guarantee that MS will be making money off of other platforms with CoD and similar games. At least Sony won't be able to buy more timed exclusives in CoD if the deal goes through lol
 

psycros

Posts: 4,559   +6,867
I'm sure they'll settle something out of court. I just don't know if this actually gives leverage to the FTC in any meaningful way...
Maybe it's for show, maybe they actually think they have something.

But from what I'm seeing, 10 years is a long time to guarantee that MS will be making money off of other platforms with CoD and similar games. At least Sony won't be able to buy more timed exclusives in CoD if the deal goes through lol

Here's the thing that always bugs me: both Microsoft and Sony continue to push the narrative that they make NO MONEY off their console hardware. If that's the case then Microsoft should be trying to get everything they own on every platform with a reasonable number of users, and the same goes for Sony. But instead they base most of their marketing off their exclusives. Either exclusive title lock-in allows them to overcharge for games or their lying about their hardware profits - or possibly both.
 

Shear

Posts: 63   +80
Wonder how much this deal with ACTUALLY cost if it does go through after all the buy off and legal costs for MS.
 

m4a4

Posts: 3,168   +4,247
TechSpot Elite
Here's the thing that always bugs me: both Microsoft and Sony continue to push the narrative that they make NO MONEY off their console hardware. If that's the case then Microsoft should be trying to get everything they own on every platform with a reasonable number of users, and the same goes for Sony. But instead they base most of their marketing off their exclusives. Either exclusive title lock-in allows them to overcharge for games or their lying about their hardware profits - or possibly both.
They do either lose or make little to no money off of hardware. They are definitely using hardware and exclusives to sell their ecosystem. Which, is more sustainable for long-term income. Sony is just more married to the antiquated idea of exclusives (which I definitely see as anti-consumer choice).

But with how little digital distribution costs for software (games) these days, they could definitely make up for it with multi-platform success outside of that ecosystem.
I suspect it doesn't look as good to the shareholders, but I do applaud when they do it anyways.

And then Minecraft comes to mind; instead of doing the bare minimum and making it an exclusive down the line, they expanded to other platforms (which is what they're committing to already with CoD).
 

Theinsanegamer

Posts: 3,947   +6,946
They do either lose or make little to no money off of hardware. They are definitely using hardware and exclusives to sell their ecosystem. Which, is more sustainable for long-term income. Sony is just more married to the antiquated idea of exclusives (which I definitely see as anti-consumer choice).

But with how little digital distribution costs for software (games) these days, they could definitely make up for it with multi-platform success outside of that ecosystem.
I suspect it doesn't look as good to the shareholders, but I do applaud when they do it anyways.

And then Minecraft comes to mind; instead of doing the bare minimum and making it an exclusive down the line, they expanded to other platforms (which is what they're committing to already with CoD).
They also committed to windows 10 being "the last windows".
 

Mr Majestyk

Posts: 1,557   +1,459
Good, as much as I hate crAptivision, we don't need this huge monopoly in the market. M$ will asset strip them and sack everyone anyway ike they always do.
 

ZedRM

Posts: 1,404   +980
Microsoft is about to get a smack down they will not enjoy. But it WILL be entertaining to watch!

@ Microsoft
Better stock up on some Vaseline. You gonna get bent over in a bad way!
 

nnguy2

Posts: 646   +1,479
Sony: it's anti-competitive for Microsoft to have exclusive titles!
Microsoft: What about your exclusives Sony?
Sony:
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Fearghast

Posts: 594   +541
Personally, I would like to see MicroSludge take a butt whipping on this one .....
TBH, as I really do not like Microsoft and Sony, it would be nice if FTC was like: "Well boys, that was your last merger, I hope you enjoyed it while it lasted."
 

MrJelly

Posts: 25   +21
I guess most of the anit-MS comments here are PS owners who would be against any attempt to force Sony to release their exclusives on Xbox. How is telling others to buy a PS to play new GoW or TLoU different from telling yourself in the future to buy an Xbox to play CoD? Don't you want to own the "better" console? XD And we still don't know which AB games and when would be Xbox/PC exclusive. Definitely not all of them. CoD maybe only when it's not relevant anymore or Sony tries to go all in with PS+. I think it will be the opposite, AB games popping up on Game Pass day one giving people more reasons to go with Xbox/PC instead of PS.
 

Burty117

Posts: 4,684   +3,035
I'm against it because it feels like the long term goal is to get everyone into a subscription model.

I'm against a video game subscription model, I only buy a few games a year now if that, and usually when they're on sale.

To me, this isn't about exclusives, this is about Microsoft owning all the biggest franchises to later down the line pay wall it all and remove the option to buy their games outright.
 

dangh

Posts: 848   +1,441
Sony: it's anti-competitive for Microsoft to have exclusive titles!
Microsoft: What about your exclusives Sony?
I just wonder if you simply not understand the issue, or you're this guy from picture?:)
No one have issue with exclusivity. Issue is with a large number of huge multiplatform IP's becoming exclusive.
MS even before acquiring bethesda had more studios than Sony, with exclusive games, and that's perfectly fine. Taking over games who sold better on competing platforms and made their position thanks to them in order to gain market advantage is an issue here.
 

dangh

Posts: 848   +1,441
I guess most of the anit-MS comments here are PS owners who would be against any attempt to force Sony to release their exclusives on Xbox. How is telling others to buy a PS to play new GoW or TLoU different from telling yourself in the future to buy an Xbox to play CoD? Don't you want to own the "better" console? XD And we still don't know which AB games and when would be Xbox/PC exclusive. Definitely not all of them. CoD maybe only when it's not relevant anymore or Sony tries to go all in with PS+. I think it will be the opposite, AB games popping up on Game Pass day one giving people more reasons to go with Xbox/PC instead of PS.

That's stupid. I'm against Tencent buying everything they can as well. No consumer needs a single entities dictating prices and reducing innovation.
And do not confuse separate topics. Having exclusive games is normal thing, MS have Forza, GeoW, Halo and more. But buying whole publishers with IPs which were successful mostly on competing platforms in order to hindered other platforms development is simply attempt to become monopoly. And MS do not care about profit - he can put his gaming division on red as long as needed, moving money from other part of the business as long as this will allow them get a dominant position after some years. Not by their own innovation, their own good games people looking after, but by allowing those games getting big on other platforms, let the rip, and then take both titles and a user base.
 

MrJelly

Posts: 25   +21
That's stupid. I'm against Tencent buying everything they can as well. No consumer needs a single entities dictating prices and reducing innovation.
And do not confuse separate topics. Having exclusive games is normal thing, MS have Forza, GeoW, Halo and more. But buying whole publishers with IPs which were successful mostly on competing platforms in order to hindered other platforms development is simply attempt to become monopoly. And MS do not care about profit - he can put his gaming division on red as long as needed, moving money from other part of the business as long as this will allow them get a dominant position after some years. Not by their own innovation, their own good games people looking after, but by allowing those games getting big on other platforms, let the rip, and then take both titles and a user base.
MS had pretty god track record in the last years and I believe it will stay that way and we will benefit from AB being under their control. But I agree that it's possible for them to go back to their old ways when they see an opportunity to crush the competition. Xbox is the more consumer-friendly platform only because of the botched Xbox One launch.
 

Slappy McPhee

Posts: 257   +162
So let me understand this....how would the tables look if it were Sony buying AB? Would there be as much outcry? As much butthurt? I personally don't use an Xbox nor a PS, but I do know how terribly mismanaged AB has been the last decade + and say what you will, but I think that MS would actually do it some good.
 

nnguy2

Posts: 646   +1,479
I just wonder if you simply not understand the issue, or you're this guy from picture?:)
No one have issue with exclusivity. Issue is with a large number of huge multiplatform IP's becoming exclusive.
MS even before acquiring bethesda had more studios than Sony, with exclusive games, and that's perfectly fine. Taking over games who sold better on competing platforms and made their position thanks to them in order to gain market advantage is an issue here.
Nice try. The FTC and another regulatory bodies has no problem with companies buying up movie studios to pad their streaming services so this is an extreme over reach. Unless you're Sony troll face 😊
 
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Sir Sparkles

Posts: 144   +70
So let me understand this....how would the tables look if it were Sony buying AB? Would there be as much outcry? As much butthurt? I personally don't use an Xbox nor a PS, but I do know how terribly mismanaged AB has been the last decade + and say what you will, but I think that MS would actually do it some good.
Yes government entities would still be taking that very seriously and behaving in the same way. Despite the silly internet whining (from whichever side about every single topic) anti-competitive behaviour within technology industries is a public financial concern, not an individual emotional one.