To be sure, a huge paradigm change is underway in the gaming world. This week, the Federal Trade Commission (FTC) has officially dropped its challenge against Microsoft’s $68.7 billion acquisition of Activision Blizzard, the gaming colossus behind blockbuster franchises like the wildly popular “Call of Duty.” This decision comes on the heels of the FTC’s widely reported concerns about the deal’s potential anti-competitive effects.
The FTC’s first move was to stop the merger. Originally, these folks were worried this would give Microsoft a way to kill competition to its Xbox gaming console business. The FTC then issued an order closing the matter that dismissed its underlying complaint. As such, Microsoft has cleared its path to proceed with the acquisition.
The FTC’s decision followed its defeat in its most recent appeal to overturn a court decision allowing the purchase to go through. In fact, a judge had already ruled against blocking Microsoft’s acquisition in a similar ruling made earlier this month.
Gamescom Highlights Mobile Gaming
Organizationally, this announcement comes at a unique moment in the gaming industry. Coinciding beautifully with the Gamescom video game fair, happening in nearby Cologne from August 24th to August 28th, 2022. The fair included around 1,100 exhibitors from a whopping 53 countries. It attracted a cross-sectional audience eager to learn more about the cutting-edge developments in gaming.
At the fair, one of the areas attendees were most surprised with was the opportunity to experience “Call of Duty” on mobile devices at the Samsung mobile booth. This mobile tour served as a reminder of the rapidly-growing popularity of mobile gaming. Just look at how companies like Activision are pouring money into this space.
FTC’s Concerns Addressed
Before throwing out its challenge, the FTC brought significant concerns about the acquisition’s effects on competition. They claimed that Microsoft’s control over Activision would give them unchecked power to institute anti-competitive practices. Such practices would severely hamper their would-be competitors in the gaming market.
“The Commission has determined that the public interest is best served by dismissing the administrative litigation in this case.” – FTC
The FTC’s concerns about the merger were grave. They stated that Microsoft could leverage its control over popular content to raise prices, lower quality, or block access entirely for competing platforms. These moves would do more long-term damage to consumers by reducing their options and diminishing their gaming experience.
“With control over Activision’s blockbuster franchises, Microsoft would have both the means and motive to harm competition by manipulating Activision’s pricing, degrading Activision’s game quality or player experience on rival consoles and gaming services.” – FTC
Looking Ahead
As Microsoft moves ever closer to finalizing its acquisition of Activision Blizzard, all eyes and ears are on the gaming community. By successfully integrating Activision’s immensely popular franchises into Microsoft’s already robust portfolio, the merger stands to significantly reshape the competitive landscape of the gaming industry.
This acquisition represents Microsoft’s determined desire to expand its gaming market share. It raises troubling questions about future federal requirements for the industry, as well as the level of competition in the market. With the FTC’s recent ruling, it certainly sounds like Microsoft is set up to make some major improvements to what they offer.
