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The FTC is reviewing Microsoft’s Activision Blizzard deal

By DeAngelo Epps February 1, 2022

Microsoft’s plan to acquire Activision Blizzard may be hitting a roadblock soon. According to a report from Bloomberg, the Federal Trade Commission (FTC) will review this landmark games’ industry deal.

This $68.7 billion acquisition of the now controversial makers of Call of Duty, World of Warcraft, Overwatch, and more has resulted in many questions being asked by fans of the gaming industry. One of the biggest of those inquiries is whether or not it’s even legal under monopolistic and anti-trust laws. That question will be answered by the FTC before Microsoft’s deal clears by the end of fiscal Q4 2023.

Heading the FTC in this ruling is Linda Khan, who is reportedly very opposed to potential monopolies. She, partnered with the FTC and Justice Department wanting to be harder on big tech, even when it’s “flexing some big muscle,” is a great potential hurdle for Microsoft and its plan to own so many pieces of the AAA western gaming market.

This isn’t the first, nor last big acquisition conducted by Microsoft or any other large body in gaming. Last year Microsoft made a similar move with its purchase of games developer Bethesda for $7.5 billion. Even more recently, Sony fired shots back at Microsoft’s acquisition spree by moving to purchase the creators of the iconic Halo franchise, Bungie, for $3.6 billion, kicking off what some are calling the “Purchase Wars.”

While there are many factors pointing towards whether Microsoft’s deal will go through, no one will know for sure for quite some time until the FTC reports finally come into play.

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De'Angelo Epps is a gaming writer passionate about the culture, communities, and industry surrounding gaming. His work ranges…

Gaming

Microsoft’s Activision Blizzard acquisition blocked in the U.K. over cloud concerns

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The U.K.'s Competition and Markets Authority (CMA) has blocked Microsoft's attempt to acquire Activision Blizzard because of its potential negative impact on cloud gaming.
Since January 2022, Xbox parent company Microsoft has been trying to acquire Activision Blizzard, the video game publisher behind franchises like Call of Duty, Diablo, Warcraft, and Overwatch. The companies have run into lots of regulatory hurdles, though, especially from the CMA and FTC, the latter of which is currently suing Microsoft. While it seemed like the CMA was inching towards approving the deal, the U.K. regulator ultimately decided to block it due to its potential impact on the fledgling cloud gaming market.

"Microsoft has a strong position in cloud gaming services and the evidence available to the CMA showed that Microsoft would find it commercially beneficial to make Activision’s games exclusive to its own cloud gaming service," a press release from the CMA explains. " Allowing Microsoft to take such a strong position in the cloud gaming market just as it begins to grow rapidly would risk undermining the innovation that is crucial to the development of these opportunities."
Over the past couple of months, Microsoft has attempted to ease these cloud gaming concerns by making deals with companies like Nvidia and EE. The CMA did not think these remedies were enough, though, saying that Microsoft's efforts didn't account for enough potential business models, cloud gaming services that don't use Windows, and how the deal could take "the dynamism and creativity of competition" away from the U.K.'s cloud gaming market.
Obviously, Activision Blizzard and Microsoft aren't too happy about this decision. Activision Blizzard directly attacks the CMA in a statement provided to Digital Trends, saying that the "report contradicts the ambitions of the U.K. to become an attractive country to build technology businesses," before calling the country's economic prospects "dire" and threatening that it will reconsider its plans for growth in that country.
Microsoft's statement from Vice Chair and President Brad Smith is a bit more measured, saying that Microsoft is "fully committed to this acquisition and will appeal." Citing the deals the company has already made to bring Call of Duty to more platforms, Smith says that the decision shows "a flawed understanding of this market and the way the relevant cloud technology actually works."
https://twitter.com/BradSmi/status/1651182266406584320
Microsoft has a lot of work cut out for itself if it still wants to force this deal through after pressure from the FTC and CMA. As the appeals process could take up to nine months or more, it seems unlikely that the acquisition meets its original June 2023 deadline; it's probable we'll be following this fight to acquire Activision Blizzard for the rest of the year.

Gaming

Microsoft pledges to bring Xbox PC games to Nvidia GeForce Now

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Microsoft has announced a 10-year partnership with Nvidia aimed at bringing Xbox PC games to its cloud gaming service competitor Nvidia GeForce Now as part of its ongoing efforts to win over companies skeptical of its potebtial Activision Blizzard acquisition.
This means that players can use Nvidia GeForce Now to play the Steam, Epic Games Store, or Windows versions of titles like Halo Infinite, Redfall, and eventually, Call of Duty through the cloud on GeForce Now. Third-party publishers with games on the Windows Store can also now grant streaming rights to Nvidia. This announcement came during a European Commission hearing where Microsoft tried to convince regulators that its impending acquisition should bne allowed.
Microsoft has been under a lot of regulatory scrutiny even since it announced its intent to acquire Activision Blizzard in January 2022. It's trying to win over industry peers with deals like this one with Nvidia. This week, the Communications Workers of America voiced its approval of the deal, and Microsoft has signed a binding agreement to bring Call of Duty to Nintendo platforms as well. Previously, Nvidia had raised concerns about Microsoft's Activision Blizzard acquisition, but the press release announcing this agreement states that the deal "resolves Nvidia's concerns," and that Nvidia now gives "full support for regulatory approval of the acquisition."
Regulatory bodies in the U.S., U.K., and Europe are worried that Microsoft acquiring Activision Blizzard will hurt the game industry and sabotage Microsoft's competitors in both console and cloud gaming. Nvidia GeForce Now is seen as one of the biggest competitors to Xbox Game Pass Ultimate's cloud service offerings, which makes it surprising that it reached an agreement with Nvidia. However, this deal also demonstrates how Microsoft is willing to make concessions so that its acquisition of Activision Blizzard is approved.

Gaming

U.K. wants Call of Duty removed from Microsoft’s Activision acquisition

Call of Duty Modern Warfare 2.

Microsoft has hit a major roadblock in its attempt to acquire Activision Blizzard, as the UK's Competition and Markets Authority (CMA) has determined that the deal "could harm U.K. gamers." For the deal to go through, the CWA is suggesting some major concessions, like Activision Blizzard divesting in the Call of Duty or Activision segments of its business ahead of the acquisition.
A notice of possible remedies document asks Activision Blizzard to do one of the following three things if it doesn't want the acquisition to be potentially prohibited.

"Divestiture of the business associated with Call of Duty."
"Divestiture of the Activision segment of Activision Blizzard, Inc., which would include the business associated with Call of Duty."
"Divestiture of the Activision segment and the Blizzard segment of Activision Blizzard Inc., which would include the business associated with Call of Duty and World of Warcraft, among other titles."