The U.S. Federal Trade Commission is suing Microsoft over its planned $68.7 billion acquisition of Activision Blizzard, saying that the deal “would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.”
In a news release, the FTC said that Microsoft has a record of “acquiring and using valuable gaming content to suppress competition from rival consoles,” pointing to the company’s $7.5 billion acquisition of ZeniMax Media, the parent company of Bethesda Softworks. The FTC noted Microsoft’s plan to keep next year’s Starfield and Redfall as Microsoft exclusives. Those games will be available on Xbox platforms and Windows PC.
“Microsoft has already shown that it can and will withhold content from its gaming rivals,” said Holly Vedova, director of the FTC’s Bureau of Competition, in a news release. “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.”
The FTC points to the Xbox Series S and Series X as “one of only two types of high performance video game consoles” on the market — the other, Sony’s PlayStation 5, is not mentioned in its statement. The commission also points to Microsoft’s Game Pass service as another cornerstone of the company’s gaming business, for which Sony and other console competitors do not have an equivalent.
The commission also notes that Activision Blizzard is “one of only a very small number of top video game developers in the world that create and publish high-quality video games for multiple devices.” The publisher controls a wide number of properties, including Call of Duty, Warcraft, Overwatch, and Diablo.
“With control over Activision’s blockbuster franchises, Microsoft would have both the means and motive to harm competition by manipulating Activision’s pricing, degrading Activision’s game quality or player experience on rival consoles and gaming services, changing the terms and timing of access to Activision’s content, or withholding content from competitors entirely, resulting in harm to consumers,” the FTC said.
Microsoft’s Phil Spencer, head of Xbox, has said that his company plans to keep multiplatform games like Call of Duty on all existing platforms, including PlayStation, after Microsoft’s acquisition of Activision Blizzard would conceivably close. In recent months, Spencer has pointed to the example of Minecraft, which Microsoft acquired in 2014 for $2.5 billion, which remains on a variety of non-Xbox devices. Spencer and Microsoft have committed publicly to bringing Call of Duty specifically to PlayStation and Nintendo devices for at least another 10 years.
But the FTC pointed to Microsoft’s assurances to European antitrust authorities and regulators being in conflict with its decision to bring Bethesda Softworks’ games exclusively to Xbox and PC — and to Game Pass — next year.
Polygon has reached out to Microsoft for comment on the FTC’s lawsuit and will update this story when the company responds.
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