Microsoft's acquisition history dates back to July 30, 1987, when it made its
Forethought was a computer software company founded in 1983. The company developed a computer program best known as Microsoft PowerPoint today. Ten years later, Microsoft merged Hotmail into its MSN group of services after purchasing Hotmail.com for
After that, Microsoft went on to acquire over
From acquiring Hotmail.com on December 31, 1997, to moving to buy Activision Blizzard on January 2022, Microsoft seems to always make headlines each year with its buyout of companies, the company has purchased an average of
Between 2005 and 2008, the company acquired more than ten businesses annually, with its 18 acquisitions in 2006 being the biggest in a single year.
Today, Microsoft is on it again. The purchase of Activision is famed to be the biggest deal in video game history, no doubt Microsoft is paying so much for it. But why is the FTC on Microsoft's tail?
“Because of the vote taken by the FTC commissioners earlier today, Microsoft is going to have a much harder time completing the acquisition of Activision Blizzard.”
- Joe Troyer, CEO & Head of Growth, DigitalTriggers
The enforcement of civil antitrust law and the promotion of consumer protection are the main responsibilities of the Federal Trade Commission, an independent agency of the US government. According to information on the organization's
The organization has a reputation for battling Big Tech. Almost the same lawsuit it has with Microsoft now was fought head-on with
The FTC aims to prevent Microsoft's acquisition of Activision, according to the agency, by giving the tech behemoth ownership over Activision's most popular video game properties, the $69 billion merger might stifle Xbox competitors.
The FTC's lawsuit asserts that the Xbox maker would obtain ownership of major video game properties, giving it the ability to hurt competition in high-performance gaming systems and subscription services by limiting or weakening rivals' access to its well-liked content.
“The FTC’s decision not to approve the Microsoft buyout of Activision Blizzard is a significant setback for the company. However, the FTC’s analysis is only one factor that must be considered in any antitrust decision. The key question is whether the proposed acquisition would result in anticompetitive effects. Microsoft has presented a number of arguments in support of the proposed acquisition, and the FTC will now consider these arguments.”
- Rick Costa, Houselectric.com
The FTC claims that some of the most well-known video games in the world are produced by Activision and that Microsoft might raise the cost of these games or make it more difficult, if not impossible, to play them on rival platforms.
“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.”
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Holly Vedova, Director of the FTC’s Bureau of Competition.
However, Microsoft claims that the transaction will improve competition and benefits customers.
https://twitter.com/BradSmi/status/1600939963377254400?embedable=true
The US government agency will go on to give examples of how Microsoft has done in the past with its acquisition of brands and its promises of a better future.
Pointing to Microsoft's history with Bethesda, a video game studio it acquired in
Microsoft has had quite a reputation for making acquisitions and promises, the question is, how much of the FTC concern is justified?
What Has Happened To Each Studio Microsoft Has Purchased?
In 1999,
Remember Halo Wars? It was an offshoot of Microsoft's longest-running video game series, produced by Ensemble. The company was bought by
The list goes on and on.
For game studios, being acquired by Microsoft should be advantageous. Now that they are connected to a significant player in the gaming industry, success seems to be assured, doesn't it? But now we see that a company might experience anything from hugely successful games to total oblivion if the experiences of past game development companies that Microsoft acquired give any hint.
Somehow, it didn't seem like Microsoft was buying Mojang, the maker of Minecraft, for its own platforms when it paid $2.5 billion for the business in 2014. The popular video game Minecraft is playable on all major platforms, including smartphones.
Microsoft has
“Microsoft has entered into a 10-year commitment to bring Call of Duty to __@Nintendo __following the merger of Microsoft and Activision Blizzard King. Microsoft is committed to helping bring more games to more people – however, they choose to play.
@ATVI_AB” -
Phil Spencer, Head of Xbox
But all of a sudden the strategy seems to be focusing on exclusive games. With Bethesda games like Starfield and Elder Scrolls 6
Maybe FTC concerns are justified after all.
“Ultimately the FTC blocked this acquisition because their mandate is to prevent monopolies, and I agree that it would not be ideal. It’s clear that Microsoft was interested in Activision Blizzard as a way to advance their metaverse efforts, however, the whole idea of the metaverse revolves around the concept of decentralization.”
- Colin Fitzpatrick, CEO of Animal Concerts
The most well-known and ambitious games from Activision Blizzard, like Call of Duty and Overwatch, have always been accessible on all major platforms, but that may suddenly change. If it does, that means that the upcoming Call of Duty game will be an Xbox exclusive and may not even be released on the PlayStation 5.
Microsoft has indicated that it would not back out of the agreement and would fight in court to maintain the acquisition, and Bobby Kotick, Activision’s chief executive supports that motive.
“I want to reinforce my confidence that this deal will close, the allegation that this deal is anti-competitive doesn’t align with the facts, and we believe we’ll win this challenge.”
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Bobby Kotick , Vice Chair and President Microsoft.
Lulu Cheng Meservey, executive vice president of corporate affairs and chief communication officer at Activision Blizzard also thinks FTC doesn’t have a business suing Microsoft.
“The FTC’s job is to protect consumers, not competitors, this vote departs from precedent but the law hasn’t changed. Any claim the deal is anticompetitive ignores facts; the deal benefits gamers and the industry, especially given competition from abroad. We look forward to proving our case in court and closing our deal with Microsoft.”
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Lulu Cheng Meservey , CCO, Activision Blizzard.
Eventually, when (and if) the acquisition of Activision Blizzard is completed, we'll finally see how it all turns out. Is it likely that this deal will be successfully completed, or do you believe there may be obstacles or issues that could prevent it from being finalized?