Microsoft’s effort to acquire Activision Blizzard – a move originally aimed at building a potential metaverse initiative – has hit a snag following an intervention by the US Federal Trade Commission (FTC).
The FTC was seeking to block Microsoft’s acquisition of the video game giant as a way to promote fair competition in high-performance video game consoles and online subscription services. However, Microsoft CEO and President Satya Nadella previously stated that the acquisition “will play an important role in the growth of the Metaverse platform.”
#Breaking: FTC Microsoft Corp. Activision Blizzard, Inc. seeks to block the acquisition of: https://t.co/ukewjn6MUX /1
— FTC (@FTC) December 8, 2022
In a recent complaint, the FTC argued that Microsoft and Sony already “control” the high-performance video game industry through the XBOX and PlayStation — and that The acquisition of Activision Blizzard would increase Microsoft’s power within the sector.
Holy Vedova, Director of the FTC’s Office of Competition, He pointed to Microsoft’s history of acquiring ZeniMax and limiting the release of popular games like Starfield and Redfall to XBOX consoles:
“Microsoft has already shown that it wants to withhold content from its competitors in the video game industry.”
The complaint speculates on a similar fate for Call of Duty, World of Warcraft, Diablo and Overwatch. Among other games that belong to the Activision ecosystem. However, the FTC’s concerns indirectly affect Microsoft’s Metaverse initiative.
In July, the FTC filed a lawsuit against social media giant Meta, alleging that “its ultimate goal is to own the entire ‘Metaverse.'” “As Meta fully recognises, network effects on digital platforms can make the platform more powerful – and its rivals weaker and less able to compete seriously – as it acquires more users, content and developers. “ the FTC said in the lawsuit.
In October, a Meta shareholder urged the company to reduce its annual investment. According to Brad Gerstner, CEO and founder of technology investment firm Altimeter Capital, Meta’s $10-15 billion per year investment to build the Metaverse could take a decade to bear fruit.
“An estimated investment of more than $100 billion in an unknown future is huge and scary, even by Silicon Valley standards,” Gerstner said.
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