Federal regulators are seeking to block Microsoft’s proposed purchase of video game powerhouse Activision Blizzard, the Federal Trade Commission said Thursday. The $69 billion deal — the largest ever for Microsoft and for the gaming industry as a whole — would undermine competition for the software giant’s Xbox gaming console, the agency said.
“Microsoft has already shown that it can and will withhold content from its gaming rivals,” Holly Vedova, director of the FTC’s Bureau of Competition, said in a statement.
The FTC cited Microsoft’s recent purchase of ZeniMax, parent company of software developer Bethesda Softworks, after which Microsoft decided to make several Bethesda titles, including Starfield and Redfall, exclusive to its consoles.
The FTC voted 3-1 to file a lawsuit to stop the deal, with the three Democratic commissioners voting in favor and the sole Republican voting against. A fifth seat on the panel is vacant after another Republican left earlier this year.
The FTC noted that Activision, maker of bestselling games such as Call of Duty and World of Warcraft, was among “a very small number of top video game developers” that publish titles for multiple devices, including consoles, PCs and mobile. Globally, some 154 million people play the company’s games every month, the FTC said.
With Microsoft in control of Activision, the software maker “would have both the means and incentive” to raise prices, issue lower-quality games or keep content off other platforms altogether, the agency said.
Microsoft defended the transaction, saying in a statement that the deal “will expand competition and create more opportunities for gamers and game developers.”
The Associated Press contributed reporting.