By Daniel Howley
Microsoft is planning to acquire “Call of Duty”, maker of Activision Blizzard, (ATVI), and the Federal Trade Commission will soon file a suit against this acquisition.
Bloomberg reported that until the FTC completes their lawsuit, Xbox cannot close the deal with Activision Blizzard.
The FTC first challenged Activision Blizzard’s $69 billion acquisition in December 2022. They argued that it would allow Microsoft to suppress competitors to Xbox gaming consoles, subscription content and businesses.
Microsoft may still complete the purchase while fighting the FTC at court. Microsoft would not be able to close the acquisition until after the FTC has concluded its own lawsuit if it filed a federal suit.
The UK Competition and Markets Authority, as well as the US government, has objected, saying that Microsoft will have a too strong grip on the market. Microsoft has appealed.
Activision Blizzard would provide a huge boost to Microsoft’s gaming division. Microsoft’s Xbox division would benefit from the “Call of Duty” franchise, which is one of the biggest video games in the industry. In the first 10 days of its release, “Call of Duty: Modern Warfare II”, brought in $1 Billion.
Microsoft’s Xbox Game Pass service will allow gamers to download hundreds of titles every month, in addition to the “Call of Duty” franchise. Microsoft Cloud Gaming is included in a $15 monthly subscription for Game Pass. This service allows you to stream your games from your Xbox console to other devices, such as smartphones and smart TVs.
Microsoft is hoping that cloud gaming will become the standard way for gamers to enjoy games in the future. Microsoft calls its platform a beta. Microsoft would gain an advantage by building up Game Pass.
According to UK Competition and Markets Authority, Microsoft has a 60%-70 % share of the market for cloud gaming. If Activision Blizzard were added, the market would be even more dominant.
Microsoft’s King mobile gaming platform, which includes the “Candy Crush Saga” game from Activision Blizzard, would be a major addition to one of gaming’s fastest growing markets.
Microsoft can still win the FTC lawsuit but the FTC is not looking to ease the situation for Microsoft.
The regulators aren’t only targeting Microsoft. Reports claim that European Union regulators are targeting Alphabet’s profitable ad-tech business. Bloomberg reported that the European Union regulators are expected to lodge an antitrust complaint with Google, disputing its legality. This business unit is estimated to account for 80% of Google’s revenues by 2022.
Google controls the majority of technology used to buy, sell, and serve ads online. Its advertising sales totaled about $225 Billion. The company is expected to earn $209.5 Billion in 2021 from the field.
