By Daniel Howley
Microsoft’s acquisition of Activision Blizzard is being challenged by the Federal Trade Commission.
Bloomberg says that the Xbox maker can’t complete the purchase of Activision Blizzard until the FTC finishes its suit against it.
Activision Blizzard acquisition of $69 billion by Microsoft was first contested in December 2020, when the FTC alleged that Microsoft would be able to stifle rivals for its Xbox consoles and subscription-content businesses.
Microsoft is still able to complete its acquisition even if it’s fighting in court with the FTC. Microsoft cannot close its deal until it has won the FTC lawsuit.
In addition to the US, UK Competition and Markets Authority also opposed the deal. They cited fears that Microsoft could have an excessive amount of control over gaming. Microsoft will appeal.
Activision Blizzard’s acquisition would benefit Microsoft’s game business greatly. Microsoft’s Xbox would be able to generate billions of dollar for “Call of Duty,” one of the top video game franchises. In its 10 first days, the video game “Call of Duty: Modern Warfare II”, generated $1 billion.
Microsoft is also allowing gamers to access Activision Blizzard franchises, such as “Call of Duty,” via the Xbox Game Pass subscription. This service allows players to download hundreds of new games each month. Microsoft’s cloud-based gaming service is also included with a monthly $15 subscription to Game Pass. You can stream Xbox One games on devices such as smart TVs and smartphones.
Microsoft hopes that as cloud gaming develops, its beta platform will be the default way users play games. Microsoft’s first mover advantage would be enhanced by building Game Pass.
Microsoft already has a 60-70 percent share in the UK’s cloud gaming market. This is according to UK’s Competition and Markets Authority. Activision Blizzard would make it even more dominant.
Microsoft would have a strong position in the gaming market if it added Activision Blizzard King Mobile Gaming, which contains “Candy Crush Saga”.
Microsoft may still be able to defeat the FTC’s suit, but it’s not going to get any easier.
Microsoft isn’t the only target of regulators. In reports, European Union officials are determined to take on Alphabet adtech’s lucrative business. Bloomberg reports that regulators will file an antitrust lawsuit against Google to contest the legality its business unit. The business is expected generate about 80% the revenue of the company by 2022.
Google’s online ad revenue was $225 billion, which is a small portion of the market of $278.6 Billion. Google has the most advanced technology to sell and buy ads, as well as serve them. This field will bring in $209.5 billion by 2021.
