Microsoft gets sued by US FTC & Call of Duty gamers over Activision acquisition; Sony boss claims Xbox Game Pass not a competition
Microsoft's acquisition of the Call of Duty maker Activision Blizzard is reportedly against US laws, claims US FTC lawsuit. Here's everything you need to know on the latest on the Microsoft-Activision deal.
After multiple reviews and innumerable debates, the US Federal Trade Commission has finally sued Microsoft for its intentions of acquiring Activision Blizzard. That’s not the end of the woes for this gaming giant, in what could possibly be the biggest deal ever to happen in the industry. In the latest update, gamers are now stepping in, to stop Activision’s acquisition, with the antitrust lawsuits. Here’s more on these latest developments.
Timeline of events in brief
Microsoft announced its plans of buying the gaming giant Activision Blizzard back in January this year sending the entire gaming industry into a frenzy. This included gamers, creators, competitors of Microsoft, and even various governments from across the world, who speculated how this acquisition could make Microsoft the biggest company in the gaming industry.
At present, about 16 governments from across the world continue with their scrutinization of the $68.7 billion acquisition, including those of the UK and the US. After the US Senators appealed to the US Federal Trade Commission in April, the FTC has also been deeply investigating the deal. On 8th December, the US FTC announced in a press release, that they have finally decided to sue Microsoft. The antitrust lawsuit filed the same day mentions that the acquisition violates the US law, more specifically, the FTC Act and the Clayton Act.
In other parts of the world, Brazil and Saudi governments have approved the deal, with Serbia on the verge of doing so according to Microsoft. However, the UK and European regulators continue with their close scrutiny and are yet to announce their verdict.
In the meantime, Sony boss Jim Ryan has expressed significant concerns over the future of its flagship title Call of Duty, in the past few months. In the latest update, a group of 10 Call of Duty gamers filed a lawsuit on 20th December, citing violations of the Clayton Act. The lawsuit has been filed on grounds of lessening competition, thus threatening “loss or damage” to the plaintiffs.
Microsoft hits back
While the US FTC might now pose a huge hurdle for Microsoft to overcome for its acquisition the company continues to defend the deal. Vice Chair and President of Microsoft, Brad Smith, reaffirmed that Microsoft has “been committed since Day One to addressing competition concerns”.
A document has also been published by Microsoft, titled “Get The Facts: How Microsoft is Committed to Growing Gaming Communities”. It highlights facts from the earlier acquisition of ZeniMax from 2021, one of the biggest deals in the history of the gaming industry, which brought Bethesda under the wing of Microsoft. The document also details Microsoft’s commitments to the Call of Duty franchise and maintaining its availability across platforms.
We have been committed since Day One to addressing competition concerns, including by offering earlier this week proposed concessions to the FTC. While we believe in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present it in court.
— Brad Smith (@BradSmi) December 8, 2022
sharing this for overall context. :)https://t.co/ZRY2wxQasr
— Frank X. Shaw (@fxshaw) December 8, 2022
Latest statement from Sony CEO Jim Ryan
In other news, Sony CEO Jim Ryan said in a statement during a Q&A session from earlier this month, that they don’t consider Xbox Game Pass as a threatening competition.
Sony has earlier dropped controversial statements like “Microsoft wants PlayStation to become like Nintendo, so that it would be a less close and effective competitor to Xbox.” However, when it comes to the Call of Duty, they don’t want to back down by even an inch. They’ve even expressed concerns over how “a significant number of PlayStation users would likely switch to Xbox and/or Game Pass” the moment Call of Duty becomes a Microsoft-exclusive IP. That is irrespective of Microsoft repeatedly assuring that is not to happen any time soon.
Ryan's latest statement however counters this. He explains, “When we consider Game Pass, we’ve sold more PS5’s in two years than they have gathered subscribers and they’ve been doing that for 6-7 years”. Ryan further added that “Sony is just shy of 50 million subscribers and they are in the low 20s, but there’s more work to do to grow that number”.
Regardless, both Sony and Microsoft are known to have paid for blocking rights for their various IPs. But as we can see, this acquisition deal of Activision Blizzard seems to be facing some stiff opposition from various parties across the world. Not to mention the various lawsuits and class actions that Activision Blizzard alone faces. However, the end of the fiscal year 2023 is still a few months away, which means Microsoft does has some time before things get too real, too quick. In other words, the game is on.