Analyst: U.S. Government Gave Microsoft Roadmap to Circumvent Activision Antitrust Concerns

On the heels of the Federal Trade Commission’s complaint against Microsoft’s $69 billion acquisition of video game publishing giant Activision Blizzard citing antitrust concerns, the government laid out a potential roadmap for Microsoft to appease regulators, according to Wedbush Securities analyst Michael Pachter.

The government, in its complaint, alleged Microsoft, which sells the Xbox video game console, published titles, in addition to branded online gaming platforms, could manipulate Activision’s pricing of its games across the Xbox ecosystem, degrade the quality of Activision games or player experiences offered on competitor consoles, i.e. Sony PlayStation 5, change the terms or timing of access to Activision content, and/or withhold Activision content from other consoles altogether.

Activision video game franchises include some of the biggest ever, including Call of Duty, Crash Bandicoot, Guitar Hero, Tony Hawk’s, Spyro, Skylanders, World of Warcraft, StarCraft, Diablo, Hearthstone, Heroes of the Storm, Overwatch and Candy Crush Saga.

Pachter contends that if Microsoft were to make the aforementioned changes, consumers would be indeed harmed. As a result, the analyst believes the software giant, in a binding legal obligation, could simply agree not alter the competitive landscape going forward.

“If Microsoft enters into a consent decree agreeing to address each of the FTC’s concerns, the case would be considered moot and the judge would be required to dismiss it,” Pachter wrote in a note to investors.