Redmond, Washington – Microsoft has reached a settlement in the antitrust lawsuit initiated by a collective of gamers opposed to its $69 billion acquisition of gaming giant Activision Blizzard. The terms of the settlement remain confidential, and the case has been dismissed with prejudice, which prevents any possibility of refiling in the future. Both parties have agreed to cover their own legal expenses.
The lawsuit, originally filed in California in 2022, was initiated by gamers from various states who were concerned about the potential monopolistic effects of Microsoft’s acquisition. They feared it would enable Microsoft to control a significant portion of the gaming market, potentially favoring Xbox gamers and altering the dynamics of popular game franchises like Call of Duty, World of Warcraft, and Candy Crush.
The gamers’ lawsuit highlighted worries that Microsoft’s control over these titles could lead to preferential treatment for Xbox console releases, increased gaming costs, and the potential discontinuation of certain games. Concerns were particularly pointed towards the impact on subscribers to Microsoft’s Game Pass service.
Following the acquisition, significant changes have been observed in the Game Pass offerings. Notably, Game Pass has begun incorporating Activision Blizzard games, with Black Ops 6 slated as the first mainline Call of Duty game to debut on the service on its launch day. This addition is part of broader adjustments to the Game Pass structure, where the basic service tier no longer includes day-one game releases. More high-profile games like Diablo 4 and Starfield have been reserved for the pricier Game Pass Ultimate or PC Game Pass tiers.
Amidst these changes, Microsoft also raised the price for its Game Pass subscription. As of July, the cost for Xbox Game Pass Ultimate ascended from $16.99 to $19.99 per month. Financial analysts have described these increases as inevitable, with speculations that Game Pass might even introduce advertising as it seeks to recover the hefty investment in Activision Blizzard.
The Federal Trade Commission (FTC) has criticized these developments. After the price hikes, the FTC labeled the new Xbox Game Pass Standard tier as a “degraded product.” It accused Microsoft of leveraging its enhanced market position to implement unpopular changes post-merger.
In defense, Microsoft refuted the FTC’s assertions, maintaining their pricing strategy was justified and challenged the notion that the new standard Game Pass was inferior, highlighting that it still includes multiplayer features.
Beyond the pricing and service structure controversies, Microsoft’s workforce adjustments post-acquisition have also drawn criticism. Since finalizing the deal, Microsoft has slashed 2,550 jobs within its gaming sector, including at multiple game development studios. This contradicts Microsoft’s earlier assurances that Activision would maintain a significant degree of operational independence. The FTC pointed this out in February, noting the layoffs included 1,900 gaming division employees just a month prior. Microsoft responded, insisting the layoffs had been planned by Activision Blizzard before the acquisition was finalized.
The series of changes enacted by Microsoft post-acquisition points to a strategic overhaul aimed at capitalizing on its investments, although not without significant backlash from regulatory bodies and the gaming community, underscoring the contentious nature of mega mergers in the high-stakes tech and entertainment industries. As the company presses forward, the gaming landscape remains vigilantly observant of Microsoft’s next moves in managing its expanded portfolio.