The US Federal Trade Commission is ramping up efforts to block Microsoft's $69 billion acquisition of Activision Blizzard, which was announced in January 2022..
According to the FTC, which filed an antitrust lawsuit against Microsoft, the deal would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.
The lawsuit comes at a time when the UK and European European Commission are still evaluating the deal under which Microsoft would acquire the Call of Duty publisher.
Meanwhile, Microsoft's gaming rival Sony, which makes PlayStation, has also been actively working to get the Activision deal overturned.
Biggest Gaming Industry Deal
The Microsoft offer for Activision was the biggest gaming industry deal in history. The deal would have been the largest all-cash acquisition on record, breaching the likes of $63.9 billion deal offered by Bayer for Monsanto and the $60.4 billion offer made by InBev for Anheuser-Busch.
Microsoft intended to increase its firepower in the fast expanding videogaming market and take on rivals like Tencent and Sony through the deal. Activision's large user base of 400 million monthly active users as a big factor that prompted Microsoft to chase the game maker.
"Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms," Microsoft Chief Executive Satya Nadella said when the deal was announced.
Microsoft offered $95 per share, a 45 percent premium to Activision's close on the day when the deal was announced. If the deal to buy the maker of games such as Overwatch and Candy Crush had gone ahead, Microsoft would have become the world's third largest gaming company.
According to data analytics firm Newzoo, the global gaming market is expected to generate $218.8 billion in revenues by 2024. The firm has said Microsoft's gaming market share was a paltry 6.5 percent in 2020. By acquiring Activision Blizzard, this share would go up to 10.7 percent.
Microsoft rival Sony says that the Activision deal could result in Microsoft making Call of Duty an Xbox or PC exclusive. According to Yahoo Finance, the sales of Call of Duty: Modern Warfare topped $1 billion in revenues. Microsoft has refuted the charges of Sony, saying it will make Call of Duty available on Sony's PlayStation.