The FTC was seeking to block Microsoft’s acquisition of the video game giant as a way to promote fair competition in high-performance video game consoles and online subscription services. However, Microsoft CEO and President Satya Nadella had previously stated that the acquisition would “play a key role in the development of metaverse platforms.”
#BREAKING: FTC seeks to block Microsoft Corp.’s acquisition of Activision Blizzard, Inc.: https://t.co/ukewjn6MUX /1
—FTC (@FTC) December 8, 2022
In a recent complaint, the FTC argued that Microsoft and Sony already “control” the high-performance video game industry – through XBOX and PlayStation – and that the acquisition of Activision Blizzard would increase Microsoft’s power within the sector.
Holly Vedova, Director of the FTC’s Office of Competition, He pointed to Microsoft’s history of acquiring ZeniMax and limiting the release of popular games, such as Starfield and Redfall, to XBOX consoles, adding:
“Microsoft has already shown that it can and wants to withhold content from its rivals in the video game industry.”
The complaint speculates on a similar fate for Call of Duty, World of Warcraft, Diablo and Overwatch, among other games, which belong to the Activision ecosystem. However, the FTC’s concerns indirectly affect Microsoft’s metaverse initiatives.
In July, the FTC filed a lawsuit against social media giant Meta, alleging “its ultimate goal to own the entire ‘metaverse’.” “As Meta fully recognizes, network effects on a digital platform can make the platform more powerful – and its rivals weaker and less able to compete seriously – as it gains more users, content and developers,” the FTC said in the lawsuit.
In October, a Meta shareholder urged the company to reduce its annual investment. According to Brad Gerstner, CEO and founder of technology investment firm Altimeter Capital, Meta’s investments of $10-15 billion a year to build the metaverse may take a decade to bear fruit.
“An estimated investment of more than $100 billion in an unknown future is huge and scary, even by Silicon Valley standards,” Gerstner stated.
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