US watchdog may call ‘game over’ on Microsoft takeover

THE US competition watchdog has moved to block Microsoft’s $69bn (£56bn) takeover of Activision Blizzard, owner of games such as Call of Duty and Candy Crush, over fears the tech giant will have too much power.

The Federal Trade Commission (FTC) said the deal threatened competition in the sector, alleging that Microsoft had a “record of acquiring and using valuable gaming content to suppress competition from rival consoles”.

Last year, it bought another rival, Bethesda, and made several games exclusive to its own platform, “despite assurances it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles”, the FTC said in its complaint. The agency is suing to block the deal.

The purchase of Activision Blizzard by Microsoft would be its biggest ever. The Washington State-based PC maker is moving more into entertainment to ease its dependence on work-related software such its ubiquitous Word and Powerpoint programs.

Microsoft faces a similar challenge in the UK. In September, the deal was referred for a so-called Phase 2 investigation by the Competition and Markets Authority (CMA), raising the prospect that it could be blocked completely. Microsoft makes Xbox game consoles and the CMA was concerned that its acquisition of Activision Blizzard’s brands would unfairly harm rival Sony, maker of the Playstation. It would hand Microsoft control of the Call of Duty series, one of the best selling franchises of all time, generating $30bn in total revenues and selling 425m copies.

Sony has warned regulators that it would be impossible for it to develop a competitor to Call of Duty if it was cut off. In a filing with regulators in Brazil, Sony said: “Call of Duty has been the top-selling game for nearly every year over the past decade, and for its genre, it’s overwhelmingly the best-selling game. It is synonymous with first-person shooters and essentially defines that category.”

Brad Smith, Microsoft’s chief executive, said of the UK investigation: “We’re ready to work with the CMA on next steps and address any of its concerns.”

Last month the EU opened an inquiry into the merger, citing similar concerns.