Microsoft’s massive deal to acquire Activision Blizzard could face a difficult review process. The Federal Trade Commission will review the deal, rather than the Justice Department, according to a report from Bloomberg.
The deal, which Microsoft expects to close by the end of fiscal Q4 2023, will see Microsoft gain control of major franchises like Call of Duty, Warcraft, Starcraft, Diablo, and Overwatch. Microsoft has stated that it plans to keep releasing many of these games on Sony’s PlayStation platform, at least as long as current contract agreements are in place, but the potential remains for Xbox to shut its competitor out of some of the biggest franchises in the world should the deal go through.
While both of these US regulatory bodies are in charge of reviewing acquisitions, one generally takes the lead, and in this case that will be the FTC, headed up by Lina Khan. Both the FTC and the Justice Department have promised to be harsher on big tech, but Khan has been particularly outspoken in her opposition to potential monopolies.
Microsoft closed a similar, but smaller, deal to acquire Bethesda early last year, but that deal’s process started under the previous administration’s regulatory bodies and concluded before Khan and her stricter stance arrived at the FTC.
Microsoft’s deal isn’t the only gaming acquisition announcement in the last couple of weeks either. On Monday, Sony announced that it is acquiring Bungie, the studio behind Destiny, in a $3.6 billion deal that will be subject to government approval — though the process is likely to be a little less complicated because the deal is so much smaller.
Large-scale acquisitions of this type have typically been safe on the entertainment side, with moves like Discovery's acquisition of Warner Media expected to go through, but Microsoft’s involvement, and the frequent use of terms like metaverse, could turn this into a tech issue, which could prompt closer scrutiny from Khan’s FTC.
While all of these factors are likely to make the acquisition more difficult and questionable for Microsoft, we likely won’t know whether or not the Activision Blizzard deal will go through until several months from now, if not next year.