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Microsoft’s planned acquisition of Activision Blizzard is a massive shift in the gaming industry that would place huge franchises like Call of Duty and World of Warcraft under the Xbox umbrella. The continued consolidation in the industry has raised questions among the community of antitrust violations and if that could impact the deal.
GameSpot spoke with lawyer Richard Hoeg, who said these potential pitfalls are unlikely to scuttle the acquisition altogether. However, the deal will certainly attract the close attention of the United States Federal Trade Commission (FTC) and Department of Justice (DOJ), and regulators could request some changes that make the acquisition look different than initially planned. To start, he said, Microsoft is likely to argue that the overall gaming market is so broad that this level of consolidation doesn’t pose a risk to competition.
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“That said, in the US both the FTC and DOJ have expressed more willingness to evaluate such deals than they have in the recent past (see Facebook and Instagram/WhatsApp), and may be looking carefully at more narrow markets that may be affected outside of ‘all games,'” Hoeg said. “Of particular note, Microsoft has made clear its intentions to use this deal to buoy Game Pass and cloud offerings which, as they stand today, are a much more narrow market that a motivated regulatory body might decide is harmed by acquisitions of this size.”
Hoeg also noted that jurisdictions outside of the US will weigh in on the deal as well, and those may be more likely to exert their own control over the details of the deal. “While I don’t believe the whole deal is likely to be blocked, there can be divestiture or other requests made by such regulatory agencies that make the deal look a bit different from what was announced today.”
The acquisition is expected to be finalized in fiscal year 2023, which gives the companies many months to work out the various details. Hoeg says that time frame is typical to get their respective ducks in a row, but that the timing could also be influenced by the anticipation of regulatory bodies getting involved.
“I strongly suspect that both Microsoft and Activision know that a deal of this size in an industry that has never experienced one like it before will get a closer look by acquisition regulators, which means it will take more time. It doesn’t mean that the deal will get blocked (and indeed Microsoft likely wouldn’t announce it in such a fashion if they anticipated a block), but it also doesn’t mean it won’t.”
For more details on Microsoft’s acquisition plans, check out the stories below.
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