The United States Federal Trade Commission (FTC) seeks to block Microsoft Corp.’s acquisition of Activision Blizzard, Inc.
Earlier this year, Satya Nadella, Chairman and CEO, Microsoft stated over its acquisition of Activision Blizzard that “Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms.”
FTC “Halt” Microsoft’s Metaverse Deal
In its press releases published on Dec. 8, 2022, FTC announced that it is halting the acquisition of leading video game developer, Activision Blizzard, Inc., along its world-famous gaming franchises like Call of Duty.
Holly Vedova, Director of the FTC’s Bureau of Competition, said “Microsoft has already shown that it can and will withhold content from its gaming rivals. 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.”
FTC alleges that the deal would enable tech giant to suppress competitors to its Xbox gaming consoles. Also, in its rapid growing subscription content and cloud-gaming business. However, this deal was of $69 Billion that is Microsoft’s and even the largest-ever deal in the video-game industry, till date.
FTC pointed in its complaint that Microsoft’s record of acquiring and using valuable gaming content to suppress competition from its rivals consoles, including the acquisition of ZeniMax, the parent firm of Bethesda Softworks. The tech giant then decided to make several of Bethesda’s titles including Starfied and Redfall Microsoft exclusives.
Meanwhile, FTC alleges MIcrosoft could also change the terms and timing of access to Activision’s content, or withhold content from competitors entirely, resulting in harm to consumers. However, the FTC’s concern indirectly impacted Microsoft’s metaverse initiatives.
It must be noted that in July, FTC filed a lawsuit against Meta, the social media giant. The Commision added in its complaints that “As Meta fully recognizes, network effects on a digital platform can cause the platform to become more powerful — and its rivals weaker and less able to seriously compete — as it gains more users, content, and developers.”
Later on, in October, a Meta shareholder requested the firm to cut down on its yearly investment. Brad Gerstner, CEO and founder of technology investment firm Altimeter Capital, stated that Meta’s investments of $10 Billion to $15 Billion per year into building the metaverse may need a decade to yield returns.
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Source: https://www.thecoinrepublic.com/2022/12/15/game-over-ftc-seeks-to-halt-microsofts-metaverse-centered-purchase/