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).
FTC sought Microsoft to prevent the acquisition of the gaming giant in order to promote fair competition in high quality gaming consoles and subscription service. Satya Nadella, Microsoft’s CEO and Chairman, 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
FTC has been accused of a recent fraud. 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 matter.
Related: Meta ‘powering through’ with metaverse plans despite doubts — Zuckerberg
Meta shareholders urged the company to reduce its annual investment in October. 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.