FTC: Xbox Making Starfield and Redfall Exclusive ‘Powerful Evidence’ Against Activision-Blizzard Merger
Microsoft’s actions following its acquisition of ZeniMax and Bethesda is “powerful evidence” in favor of preventing the company’s purchase of Activision Blizzard, the Federal Trade Commission [FTC] said in a new filing ahead of the upcoming showdown over the agency’s request for a preliminary injunction.
Last week, the FTC requested a restraining order temporarily blocking the $68.7 billion deal ahead of a hearing beginning on June 22. Leading up to this week’s hearing, Microsoft, Activision, and the FTC were able to submit opinions on the matter.
In the FTC’s document, the agency pointed to Microsoft’s willingness to make games Xbox exclusive in its argument against the acquisition.
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“Defendants put great stock in Microsoft’s concerns about ‘infuriating gamers’ if it were to foreclose rivals’ access to Activision content… But those same concerns did not stop the ZeniMax decision,” the opinion reads in part.
Microsoft announced plans to acquire ZeniMax and its portfolio of studios in 2020. Following the deal’s closure, we’ve seen Xbox games like last month’s Redfall and the upcoming Starfield become Xbox exclusive. We’ve heard that Microsoft canceled a PlayStation 5 version of Redfall, pivoting instead to Xbox console exclusivity and Game Pass.
This statement from the FTC argues that the precedent set by the Bethesda acquisition means Microsoft could make Activision Blizzard games exclusive to Xbox platforms, despite Microsoft’s persistent attempts to sign 10-year commitments for Call of Duty on other platforms.
The filing goes on to argue that the deal may “substantially lessen competition in high-performance consoles and all consoles.” It also addressed the Switch, arguing that Nintendo’s console should not be compared to the Xbox Series X|S and PS5 while citing an expert who claimed that “even if the Switch were included in the market, the likely anticompetitive effects of the Proposed Acquisition are the same as in the high-performance console market.”
Speaking of Call of Duty, Activison’s juggernaut came up elsewhere in the FTC’s document. The FTC said that Microsoft and Activision Blizzard’s side “badly assert that ‘most PlayStation gamers do not play [Call of Duty] at all”, but the FTC claims it has evidence to contradict that statement. The FTC’s reasoning for disputing the popularity of Call of Duty on PlayStation is redacted from the released version of the document.
Microsoft’s battle to get the Activision Blizzard deal has dragged on for more than a year amid opposition from both the FTC and the UK’s Competition and Markets Authority [CMA]. Microsoft is currently in the process of appealing the CMA’s decision to block the deal.
The Microsoft and Activision Blizzard deal needs to close by July 18, 2023, or the parties will need to renegotiate.
Logan Plant is a freelance writer for IGN covering video game and entertainment news. He has over seven years of experience in the gaming industry with bylines at IGN, Nintendo Wire, Switch Player Magazine, and Lifewire. Find him on Twitter @LoganJPlant.
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