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The US will court against Microsoft to stop the company from buying Activision Blizzard, the makers of hit games like Call of Duty.
Regulators said they worried competition would die out, and monopolies would grow. They were worried that if the deal went through, Activision Blizzard games would no longer be available on gaming consoles made by companies other than Microsoft.
The deal to buy Activision would be Microsoft’s biggest deal.
The company said it would work hard to finish the $69 billion (£56 billion) deal.
Brad Smith, the president of Microsoft, said that the company had full confidence and was excited to go to court.
The lawsuit against Microsoft is one of the most well-known legal battles arising from US President Joe Biden’s promise to fight monopolies.
Other countries, like the UK, worry about the deal that was going to happen.
Activision Blizzard owns some of the notable games in the world, like the Call of Duty series and Candy Crush.
FTC warns against Microsoft monopoly
The FTC said that Activision Blizzard was one of only a few top video game companies that made high-quality games for multiple devices.
The deal would give Microsoft “both the means and the motivation to hurt competition.” For example, Microsoft could change prices to make games worse on its competitors’ video game consoles, hurting competition. “Or not sharing content with competitors, which hurts consumers,” the agency said in a press release.
The FTC pointed out that Microsoft bought ZeniMax, which owns Bethesda Softworks, a video game company. Microsoft has said that it will make a few of the studio’s future games on consoles made by Microsoft.
This week, Microsoft said that if the sale went through, Call of Duty would be available on Nintendo for ten years.
Microsoft said that it would add more games to GamePass, its Netflix-style subscription service for games, when it announced the deal. Along with the growing number of people who play games with their phones.
After the takeover, Microsoft will have the third-highest revenue of any gaming company in the world. Behind Tencent in China and Sony in Japan.
A Microsoft and Activision Blizzard could hurt competition
Microsoft’s plan to buy Activision Blizzard could make it much harder for other companies to make consoles, subscription services for multiple games, and game streaming services.
Microsoft wants to pay $68.7bn (£59.2bn) for the company that makes Overwatch, Candy Crush, and Call of Duty.
But the Competition and Markets Authority (CMA) in the UK says it is worried and may now do a more thorough investigation.
Microsoft said it was ready to discuss the next steps with the CMA.
If the deal goes through, it will be the biggest deal the company that makes Xbox has ever made.
Some of the most played games worldwide are made by Activision Blizzard. But it has been accused of allowing a toxic and sexist work culture.
In its decision, the CMA worries that if Microsoft bought Activision Blizzard, it could hurt competitors. By not letting them play Activision Blizzard games or letting them play under much worse conditions.
Microsoft says that it wants to buy Activision Blizzard mainly because of its experience with mobile games.
Phil Spencer, the company’s head of gaming, told Bloomberg that “mobile phones are the biggest gaming platform on the planet,” but Microsoft needs more expertise in this area.
You can now play Activision games on both the Xbox and the rival PlayStation consoles. But the planned takeover has made some people think that more games might only be available on Xbox.
Mr. Smith had previously denied this in an interview with CNBC. He told the network, “Great games like Call of Duty will still be available on the Sony PlayStation.”
He compared it to when the company bought Minecraft in 2014. Then, he said the company had put money into the game and made it available on more platforms.
Purchases from the past
Some people have pointed to past takeovers as proof that the deal could mean that more new Activision Blizzard games will only be available on platforms owned by Microsoft.
Last year, Microsoft bought Bethesda Softworks’ parent company for $7.5 billion (£6.46 billion).
At the time, Mr. Spencer said that some new games would only be available on Xbox and PC.
And Xbox’s Aaron Greenberg confirmed in a tweet that Starfield, Xbox will not release the game on PlayStation.
Some independent game developers also worry that Microsoft’s Game Pass, like Netflix for games, will leave them out. They think that if the deal went through, the company would start giving more attention to its titles.
But Sony, makers of PlayStation, has also been buying studios. It spent $3.7 billion in June to buy Bungie, a game company.