Microsoft's proposed acquisition of Activision Blizzard for $68.7 billion has raised concerns among antitrust regulators – but Microsoft has a potential solution.
Microsoft is a dominant player in the video game industry, and the Activision deal could make them a titan, consolidating its market power exponentially. The deal was announced last January, but it slowed to a crawl as the U.S. Federal Trade Commission (FTC) asked a judge to block the deal. One of the FTC's main concerns is that the acquisition could give Microsoft too much control over the market for PC gaming. Fellow gaming company Sony also wants the deal to be blocked, along with a group of ten gamers who have filed a private consumer antitrust lawsuit against Microsoft. The deal is hotly contested because Activision Blizzard is the owner of several popular games, including World of Warcraft and Call of Duty. The FTC's concern, along with the European Commission, is that these two games could become Xbox exclusives while other consoles from Nintendo or Sony would be excluded.
To address this concern, Microsoft has promised to open its gaming platforms and allow other companies to offer their own games and services on these platforms. Microsoft Chief Executive Officer (CEO) Brad Smith says they're prepared to supply competitors with licensing agreements if the Activision acquisition is approved – Nintendo and NVIDIA have already agreed to these terms. However, he adds that the U.K.'s Competition and Markets Authority's (CMA) suggestion to divest Call of Duty was a substandard settlement. In a statement recently, Smith added that Sony would get same-day releases of all Activision games, which improves upon the current deal Sony has with Activision that's set to expire imminently.
The final decision on the acquisition will ultimately rest with antitrust enforcers in the EU, who will need to determine whether these measures are sufficient to prevent harm to competition in the industry by April 11, 2023.