Microsoft’s proposed $69 billion acquisition of Activision Blizzard has hit what appears to be another stumbling block in the form of a federal antitrust lawsuit that was filed in San Francisco today by gamers who believe that the merger would harm the gaming industry, one that could “foreclose rivals, limit output, reduce consumer choice, raise prices, and further inhibit competition.”
“Microsoft already controls one of the industry’s most popular and largest video game ecosystems,” the suit says, as seen by Bloomberg Law. “The proposed acquisition would give Microsoft an unrivaled position in the gaming industry, leaving it with the greatest number of must-have games and iconic franchises.”
“This deal will expand competition and create more opportunities for gamers and game developers as we seek to bring more games to more people,” a Microsoft spokesperson told Bloomberg Law in response, defending the transaction.
According to the complaint, the planned merger would give Microsoft outsized power in the industry’s overlapping product markets, such as console, PC, cloud-based, and mobile gaming. The tech giant would also allegedly gain an edge in markets covering top-tier “AAA” games, subscription services, and consoles themselves.
The merger would also allegedly combine two of the few large companies currently competing for workers with the “specialized talent” to make video games. That would reduce employee mobility and leverage at exactly the wrong time, when Activision is “engulfed in lawsuits” over its toxic culture of gender discrimination and sexual harassment, according to the complaint.
Microsoft revealed that it had agreed to acquire Activision Blizzard on January 18, 2022, with Phil Spencer, CEO of Microsoft Gaming, explaining how the deal would accelerate his company’s plans for cloud gaming, allowing more people in more places around the world to enjoy games on Xbox platforms.
The FTC revealed that it would be suing Microsoft over the deal earlier this month, but Bobby Kotick, Activision Blizzard’s CEO, remains confident that the deal will close.