The US government will try to block Microsoft's deal to acquire game developer and Xbox maker Activision Blizzard amidst concerns it may suppress competitors, the Federal Trade Commission (FTC) said on Thursday.
"Microsoft has already shown that it can and will withhold content from its gaming rivals," said Holly Vedova, Director of the FTC's Bureau of Competition," FTC Competition Bureau Director Holly Vedova said in a statement.
"Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets," Vedova added.
The USD 69 billion deal to acquire Activision Blizzard also includes the acquisition of its major war video game franchise, Call of Duty. The FTC said that if the purchase goes forward, it would be the biggest in the gaming industry and Microsoft's largest transaction ever.
In a complaint, the FTC pointed to Microsoft's record of acquiring and using valuable gaming content to suppress competition from rival consoles, including its acquisition of ZeniMax, the parent company of Bethesda Softworks. Microsoft decided to make several of Bethesda's titles including Starfield and Redfall Microsoft exclusives despite assurances it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles, the trade commission added.
According to FTC, Microsoft's purchase of Activision would allow it to manipulate pricing, degrade the game quality and player experience on rival consoles, harming consumers. Microsoft's Xbox Series S and Series X are one of only two types of high-performance video game consoles. Importantly, Microsoft also offers a leading video game content subscription service called Xbox Game Pass, as well as a cutting-edge cloud-based video game streaming service, according to the complaint.
Activision is one of only a very small number of top video game developers in the world that create and publish high-quality video games for multiple devices, including video game consoles, PCs, and mobile devices. It produces some of the most iconic and popular video game titles, including Call of Duty, and has millions of monthly active users around the world, according to the FTC's complaint.
Activision currently has a strategy of offering its games on many devices regardless of producer. But that could change if the deal is allowed to proceed. The complaint said that with control over Activision's blockbuster franchises, Microsoft would have both the means and motive to harm.
Image courtesy: Activision Blizzard Twitter