Can someone explain why FTC is trying to stop the deal? Isn’t it good for the US for MS to be propped up in the gaming business, when Sony is basically the single major player.. ?
Microsoft already owns a large number of successful studios and IP, such as Halo, Minecraft, and Bethesda, developers of The Elder Scrolls Series (Skyrim) and the upcoming Starfield. They don't need a helping hand from the government to prevent them being squished out. Starfield was confirmed to have been going on Playstation until they were acquired by Microsoft; now the only way to play it will be on Xbox or Windows.
If Microsoft buys Activision/Blizzard, it's safe to assume that future A/B games will go the same way, and only be available on Xbox or Windows. This is problematic because Activision's IP portfolio is massive (including huge console annuals like Call of Duty), and Blizzard games are still extremely popular. If a normal game studio acquisition is like a comet colliding and adding its mass to the Earth, this would be like the moon crashing into the Earth.
Sony has way more exclusives than MS— why would it be catastrophic to even that particular playing field? This just sounds like Sony fans pissed that a few games are going to get taken away.
No one is having issues understanding the scale of the acquisition—a $70 billion dollar price tag kinda makes that obvious to everyone.
The question that myself and others in the thread have been asking without getting a clear answer is how could this acquisition make Microsoft a monopoly in the gaming space?
Even with the scale there doesn’t seem to be any legitimate path to Microsoft becoming a monopoly: video games is a $200b a year industry. Activision Blizzard’s 2022 revenue was $7.5b and combining that with Xbox’s $15b revenue still doesn’t even surpass PlayStation’s $24b. Is that a monopoly? I don’t see it.
Activision Blizzard is already a US company. If the US is worried about the health of the video game platform market (which is to say, if it ignores PC and Switch), then it can use the exact same antitrust argument to force Sony to allow sideloading on consoles and break their stranglehold on the hardware.
The real answer is that the FTC is pursuing the currently canonical Democrat party regulatory agenda of trying to stop big companies from getting bigger (search terms “Neo-Brandeisian” and “market power”). This goes along with the general optics / narrative that regulators “failed” to stop big acquisitions that, in hindsight, made Big Tech more competitive (the most common examples are Google acquiring DoubleClick and YouTube, and Facebook acquiring WhatsApp and Instagram). This deal had a large headline price ($70B / “biggest gaming acquisition ever”), so the FTC opposed it knee-jerk and has tried to justify it post-hoc.
Most of the comments here are uninformed on the law and the underlying market dynamics. My job involves analyzing the games market and there is no reasonable support to the claim that this deal will significantly harm competition in itself. Various parties might not like it for various reasons, but it would be pretty bog-standard, business-as-usual in video games. Activision is big but its portfolio isn’t big enough to single-handedly sew up the market for long. Huge swings happen every decade and no content or IP is guaranteed to keep its influence for very long. Xbox is in a distant third among consoles and MS would lose more money by pulling their biggest titles from the biggest console platform (PlayStation) than they’d gain by muscling more device share. They’d also degrade the value of the product because cross-platform play is basically table stakes and gamers would move towards games they can play together. MS is proving all this by offering all other platforms access to said content (which Nintendo and most others have accepted, but Sony has performatively refused). Some smaller content will be held exclusive, but that’s the running standard in the industry and has been for all time.
So, the FTC really doesn’t have shit here. They’re going to lose the ongoing injunction case and by all likelihood MS will close the deal before the July 18th deadline.
The UK’s Competitive Markets Authority is also holding it up (but notably, no other major regulator has objected, including the EU which has the most regulatory credibility). Playstation has a huge corporate presence and its European HQ in the UK, so the CMA is likely driven by local lobbying strength combined with similar political motivations (further bolstered by pressure from the current FTC commissioners, which has been reported). The CMA’s objection is (amazingly) even more poorly constructed, based on the argument that this will make future “cloud gaming” markets uncompetitive. I’ll spare you the details, but that is even more comically ridiculous than the FTC case. Once the FTC loses this injunction, the CMA will have to fold or else they will be embarrassed as a regulatory body by Microsoft closing the deal over their objections and showing them to have no teeth (and no clue).
> big acquisitions that, in hindsight, made Big Tech more competitive (the most common examples are Google acquiring DoubleClick and YouTube, and Facebook acquiring WhatsApp and Instagram).
How did these acquisitions make big tech more competitive?
I’m saying it made those companies more competitive (as in “better equipped to compete”), not that it made the various markets more competitive (as in “characterized by competition by multiple actors”).
“Big Tech” tends to refer to the companies.
Edit: To clarify further, I’m not casting those claims about older Big Tech acquisitions as wrong or misinformed. Nor am I trying to make any specific argument about the Democrats’ strategy / Neo-Brandeisian thought here. Just directly answering the question I replied to. I’m quite confident that this particular case against Microsoft, as argued by the regulators, is quite weak and that the political tail is wagging the dog here.
