This Is Why The FTC Blocked Microsoft

FTC has explained in their own administrative complaint blocking the sale of Activision Blizzard King to Microsoft why they did not take the company’s word.

In multiple communications to the public and to regulators, Microsoft claimed that their acquisition would be good for competition. With Call of Duty being the key point of contention that Sony and critics have jumped on, Microsoft have also made assertions that they offered Call of Duty to Sony for a decade, and have already made this commitment to Nintendo and Steam. And, that commitment could extend even beyond the ten year period, which Phil Spencer explains is a mere formality.

However, the FTC is looking at another company that Microsoft has already acquired, and their conduct in relation to that. That company is Zenimax, the parent company of both Bethesda Softworks and id Software, two of the industry’s most venerable and important game studios.

This is the wording the FTC used to explain their distrust of Microsoft:

“Moreover, Microsoft’s past conduct is telling.

Despite statements by Microsoft to European regulators disavowing the incentive to make ZeniMax content exclusive post-close, after the EC cleared the transaction, Microsoft plans for three of the newly acquired titles to become exclusive to  icrosoft’s Xbox consoles and Xbox Game Pass subscription services.

For example, although previous titles in ZeniMax’s franchise were released on PlayStation, Microsoft has confirmed that the upcoming will be available only on Xbox consoles, Windows PCs, and Xbox Game Pass subscription services.

Microsoft has also stated that Starfield and Redfall, two of the highly anticipated new games in development at the time of Microsoft’s purchase of ZeniMax, will also become Xbox console and Xbox Game Pass exclusives upon release.”

While the FTC does have a point that Microsoft was quick to clamp down on exclusivity for upcoming Bethesda action RPG Starfield, Bethesda head Todd Howard has another perspective on this situation. As Todd pointed out in his interview with Lex Fridman two weeks ago, Xbox was always the lead platform for their open world games, and where they found the most success. In fact, games like The Elder Scrolls 5 Skyrim coming later to consoles like PlayStation and the Nintendo Switch were an afterthought years after they proved their success on Xbox and Windows.

The point here being that the video game studios themselves, including third party studios, will voluntarily make their own games console exclusive, depending on what is best for them and their project. It’s true that the needle has moved for gamers to expect most games to be multiplatform, and nearly all console games are expected to come to PC (This has even happened to the Nintendo Switch, with the PC release of their former exclusive Daemon X Machina).

Nonetheless, there are still plenty of projects, like Lost Soul Aside, where the circumstances call for platform exclusivity. The FTC should be taking this into account and not just accepting Sony’s argument wholesale that console exclusivity of any one game, even one as big as Call of Duty, will have such a devastating effect on a massive industry, where Call of Duty has many competitors.

The next few months will be interesting to watch, not just for the final outcome of these regulatory actions, but to see what else the game companies and regulators reveal about the industry and themselves along the way.

Source: FTC