Is Microsoft building a gaming monopoly?
Yesterday morning, Microsoft announced plans to acquire Activision Blizzard, publisher of games ranging from the Call of Duty series to Candy Crush Saga, for $68.7 billion. Microsoft says the move would make it the third-largest gaming company by revenue, following Tencent and Sony. The company, already a giant in the market, would gain even more leverage over how games are made and distributed. That’s assuming regulators approve it — something that’s not guaranteed amid a new push for scrutiny of potential tech monopolies.
After a damaging antitrust case in the 1990s, Microsoft has mostly escaped the more recent antitrust criticism directed at tech companies like Apple, Meta, and Amazon. But the company has been steadily building its power in the games world for the past few years. In 2021, it closed an acquisition of ZeniMax Media, giving it ownership of subsidiaries like Fallout maker Bethesda Softworks for a total of 23 first-party game studios. Meanwhile, Microsoft has built its Xbox brand into a gaming service that spans both consoles and PCs. The company recently revealed that its Xbox Game Pass subscription service had grown to 25 million subscribers after launching in 2017. With the Activision Blizzard acquisition, it would integrate a massive game publisher into that system.
That new market power could raise eyebrows at the US Justice Department and Federal Trade Commission, which will have to approve the merger. While neither agency has commented on the recent announcement, they’ve committed to more carefully examining tech industry consolidation — launching a joint process yesterday to start overhauling the approval process. Expecting resistance, Microsoft has budgeted an extended timeline for the process,
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