Microsoft Rebuttal Fires Back At FTC's Activision Deal Lawsuit

Back in January of 2022, Microsoft confirmed rumors that had been floating around. It was acquiring Activision Blizzard for $69 billion, furthering its quest to swallow up as many gaming studios as possible to expand its offerings for Xbox and PC. Previous notable Microsoft Acquisitions include Obsidian Entertainment, the makers of "Outer Worlds" and "Grounded," and Compulsion Games, which brought us "We Happy Few." 

Microsoft's latest conquest — Activision Blizzard — is arguably one of its most important. With 9,800 employees as of 2020, according to Macrotrends, and more than a few major gaming properties, including "Crash Bandicoot," "Call of Duty," the "Diablo" franchise, "Spyro," and "Overwatch," as well as the mobile portfolio from King, the maker of Candy Crush, under its purview. Adding Activision Blizzard to its ranks would give Microsoft some serious clout when it comes to game development.  

While the news of the acquisition was met by some positive reactions — mostly by PC gamers hopeful to get better console ports and more PC diversity and by those who hope the acquisition will reshuffle management and start to correct recent scandals that Activision Blizzard has been involved in — there have been concerns of monopolistic intentions, both from gamers and regulators. On December 8, 2022, the U.S. Federal Trade Commission (FTC) announced a lawsuit to stop the acquisition due to concerns that Microsoft would try to suppress competition in the industry. 

According to The Wall Street Journal, on Dec. 22, 2022, Microsoft filed a response to the FTC's lawsuit that denies the possibility of any monopolistic practices, and argues that the acquisition will bring more competition to the industry. Microsoft's argument partially hinges on claims that it is not the biggest console maker or game developer, and that by expanding its game library and bringing more offerings to mobile, Xbox and PC, it will be more competitive with bigger console manufacturers and game developers. According to statistics compiled by VGChartz, both the Nintendo Switch and PlayStation 5 have outsold the Xbox Series X and S consoles by a significant margin in the first 107 weeks of the availability of each. Between the Xbox Series X and S, Microsoft sold 19,687,577 units, while the PlayStation 5 and Nintendo Switch sold 27,565,306 and 32,287,523 units respectively.

Microsoft isn't the biggest console manufacturer, but Microsoft using its ownership of popular console titles is a valid concern. According to Newzoo, three of the top 10 most popular PlayStation 5 games in November 2022 were Activision Blizzard properties. In Microsoft's response, it said that Xbox wants to grow its presence in mobile gaming because more than a third of Activision's revenue is in mobile gaming. Before the lawsuit, Microsoft offered a 10-year deal for "Call of Duty" games to Nintendo, and promised to bring the game to the Nintendo Switch for the first time, according to CBS News.