Microsoft responds to FTC: Activision Blizzard job cuts would've happened regardless of merger; pre-planned

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Key notes

  • Job cuts at Activision Blizzard were pre-planned, not merger-related.
  • Microsoft assures the court of potential divestitures if required.

Microsoft has formally responded to the Federal Trade Commission’s (FTC) antitrust concerns regarding its acquisition of Activision Blizzard. The FTC previously challenged the deal, questioning why Microsoft laid off 1,900 employees shortly after the merger, given earlier assurances of Activision Blizzard’s independent operation.

In its response, Microsoft maintains that the job cuts were unrelated to the merger and were part of plans already formulated by Activision Blizzard before the acquisition. The company emphasizes its commitment to operating Activision Blizzard as an independent entity and highlights several points to support its claims:

Microsoft states that the post-merger structure allows for “ready divestiture” of any or all Activision Blizzard businesses if mandated by the court. This suggests they are prepared to comply with potential divestiture orders.

To address concerns about game exclusivity, Microsoft points to a multi-platform agreement with Sony, ensuring Call of Duty remains accessible on PlayStation consoles. Additionally, Activision titles on cloud-gaming platforms like Nvidia showcase their commitment to an open ecosystem.

Despite Microsoft’s arguments, the FTC remains unconvinced. Their core concern is that the merger could harm competition within the video game industry, potentially limiting access to popular titles like Call of Duty. The FTC believes further investigation is necessary to assess the deal’s potential impact on the market.

It’s crucial to remember that this is an ongoing legal battle, and the final verdict could take some time. While Microsoft presents its defense and the FTC maintains its concerns, the court will meticulously evaluate the presented evidence before making a final decision.

This case adds to the broader conversation surrounding consolidation within the tech industry and its potential impact on various sectors, including gaming.