Newsletter
Microsoft just hit us with some MAJOR news with its announcement that it agreed to acquire Activision Blizzard. To the tune of $68.7 billion, the company is now poised to own some of gaming’s biggest franchises. This includes Call of Duty, Overwatch, World of Warcraft, Candy Crush, and more.
This all seems good from Microsoft’s point of view, but what about the Department of Justice? Microsoft’s acquisition of Activision Blizzard will undoubtedly catch the attention of the DOJ and not for good reasons.
Microsoft buying Activision Blizzard might provoke the DOJ
The US Department of Justice has long been at odds with Microsoft and other large corporations. While companies buy smaller entities from time to time, the Department of Justice draws a line. It steps in when a company buys too many smaller companies. Microsoft has purchased a lot of smaller companies, and the Department of Justice has stepped in before and put a halt to the process.
With the Activision Blizzard acquisition, Microsoft wouldn’t just be buying a small company, it would be buying a fairly significant chunk of the gaming market. Call of Duty, World of Warcraft, Overwatch, Diablo, and Candy Crush are some of the biggest game franchises in the world, and now, they’re under the command of one overarching company.
So, what if the Department of Justice doesn’t like this idea?
The Department of Justice has a stance to keep markets nuanced and open to competition. Because of this, it filed a lawsuit against Microsoft back in 1998. That battle wasn’t as much about Microsoft owning a lot of companies. It was about the company’s grip on the computing market.
So, if the Department of Justice doesn’t like Microsoft owning Activision Blizzard, there might be another legal battle. If the Department of Justice wins said lawsuit, then Microsoft will have some decisions to make.
The company may need to either relinquish Activision Blizzard or develop a workaround to the issue. One common workaround that companies do is develop subsidiaries to own smaller companies. If Microsoft does this, then it might have to split Activision Blizzard up into separate entities. Then, it could put them under different companies under different management.
What if the Department of Justice does approve this acquisition?
If the Department of Justice gives the “Okay”, then it could have a ripple effect. Since Microsoft will own such a large part of the gaming market, it’ll be a dominating force among other companies. This could coax other companies into purchasing game companies just to keep up.
If that were to happen, we could see a snowball effect as companies try to build their own gaming monopolies to gain a market lead. Who’s to say that Epic Games or Tencent won’t spend billions of dollars on a company next month? If buying up gaming companies becomes a trend, then we’ll see big shifts in the way that games are handled.
If the Department of Justice opposes this, it could be a good thing
As companies fight for dominance over their respective markets, consumers seem to be on the casualty list more often than not. Gamers thrive on the nuance that pervades the gaming community. It makes for more competition and pushes companies to make higher-quality games. Also, it keeps all of the games from feeling too similar.
Since Microsoft holds the reins for a company with more than 400 million monthly users, it could potentially have a say over the development and distribution of all games involved. Does this mean that the company is going to change every game into Halo? Of course not, but when it comes to development schedules, distribution, monetization, and other factors, it’s possible that we could see some changes.
Regardless of what benefits this acquisition could bring, it might be for the best that Microsoft not be allowed to own such a large part of the gaming market. As much as the company will try to reassure us that there won’t be any changes, it’ll be hard to take that at face value.
We don’t know exactly what Microsoft plans to do with Activision Blizzard
The ink is still drying on the contracts at this point. As with any deal, we’re going to have to wait months until we see anything come of it, and by that time, Microsoft could already be fighting with the Department of Justice.
As great as it would be getting Activision Blizzard games on Game Pass, it’s more important that the market be open for competition and growth. If one company can own a large part of the gaming market, other companies could try to one-up it.
All in all, the acquisition of Activision Blizzard is big, but it’s only the first stage in a long process. Either the Department of Justice lets this happen or it opposes the whole thing and we become the audience to a long and tedious legal battle. One thing is for sure, we haven’t heard the last of this.