FTC opposes Microsoft’s metaverse-focused Activision Blizzard purchase

Microsoft CEO and chairman Satya Nadella had previously stated that the acquisition of Activision Blizzard would “play a key role in the development of metaverse platforms.”

Microsoft’s attempt to acquire Activision Blizzard — a move originally aimed toward building Metaverse initiatives — hit a roadblock after an intervention by the United States Federal Trade Commission (FTC).

The FTC sought to block Microsoft from acquiring the gaming giant as a way to promote fair competition in high-performance gaming consoles and subscription services. However, Microsoft CEO and chairman Satya Nadella had previously stated that acquisition would “play a key role in the development of metaverse platforms.”

#BREAKING: FTC seeks to block Microsoft Corp.’s acquisition of Activision Blizzard, Inc.: https://t.co/ukewjn6MUX /1

— FTC (@FTC) December 8, 2022

In a recent complaint, FTC argued that Microsoft and Sony already “control” the high-performance gaming industry — via XBOX and Play Station consoles — and acquiring Activision Blizzard would increase Microsoft’s power in the sector.

Holly Vedova, FTC’s Bureau of Competition director, noted Microsoft’s record of acquiring ZeniMax and limiting the publishing of popular games, such as Starfield and Redfall, to XBOX consoles, adding:

“Microsoft has already shown that it can and will withhold content from its gaming rivals.”

The complaint speculates a similar fate for Call of Duty, World of Warcraft, Diablo and Overwatch, among other games, that belong to the Activision ecosystem. However, FTC’s concerns indirectly impact Microsoft’s metaverse initiatives.

In July, FTC filed a lawsuit against social media giant Meta, alleging “its ultimate goal of owning the entire ‘metaverse.’” “As Meta fully recognizes, network effects on a digital platform can cause the platform to become more powerful — and its rivals weaker and less able to seriously compete — as it gains more users, content, and developers,” said FTC in the complaint.

Related: Meta ‘powering through’ with metaverse plans despite doubts — Zuckerberg

In October, a Meta shareholder urged the company to cut down on its yearly investment. According to Brad Gerstner, CEO and founder of technology investment firm Altimeter Capital, Meta’s investments of $10 billion to $15 billion per year into building the metaverse may need a decade to yield returns.

“An estimated $100B+ investment in an unknown future is super-sized and terrifying, even by Silicon Valley standards,” Gerstner stated.