FTC Could Slow Down Microsoft’s Metaverse Ambitions Following Activision Lawsuit

On November 8th, 2022, the Federal Trade Commission(FTC) filed a lawsuit to block Microsoft from buying Activision Blizzard, developers behind Overwatch franchises, and Call of Duty. FTC claims that if the deal succeeded, it would give Microsoft an unfair advantage over its rivals in the industry, thus creating a monopoly.

Director of the FTC’s Bureau of Competition Holly Vedova says Microsoft has shown that it can withhold content from its gaming competitors in the past years. Therefore, the agency seeks to stop the company from gaining control over a leading independent game studio and using it to harm competition in the fast-growing gaming market.

Microsoft revealed its plan to purchase Activision Blizzard in January this year. The deal is said to be worth around $68 billion. If the lawsuit is successful, it will put a dent in Microsoft’s push into the metaverse. The firm has taken many steps in that direction, like joining Meta and Sony to create an open metaverse.

Blockchain Developers Continue to Show Concerns Over Major Web2 Firms Involvement in the Metaverse

Blockchain developers have constantly expressed concerns about firms like Meta and Microsoft dominating Web3 and building closed ecosystems. Another fear relates to the potential lack of ownership that a metaverse developed by major Web2 firms would have for gamers.

As Microsoft steps into the metaverse, it looks like the firm has no intention of allowing Web3 products like NFTs into its virtual worlds. In July 2022, the tech firm banned NFTs on its game servers. In a news post, Microsoft announced that it had prohibited blockchain technologies from being integrated into its client and server applications.

Activision Leaders Respond to FTC Lawsuit

Activision CEO Bobby Kotick wrote on his Twitter account to respond to the FTC lawsuit. According to him, the allegation that the deal is anti-competitive does not align with the facts, and he believes that the two firms will win the challenge.

Senior Vice president of Litigation, Regulatory, and Public Policy Law at Activision Blizzard, Jeb Boatman, sent an open letter to employees asserting that Microsoft would not make its Call of Duty game an Xbox exclusive. Boatman says that Microsoft has spent several months promising millions of players and global regulators that it won’t do that.

Therefore, Boatman believes Microsoft, one of the most respected brands globally, would not risk its reputation by not keeping its promise. He adds that the backlash would destroy Microsoft’s trust with players, which the firm has spent years building and protecting.

Meanwhile, the metaverse space has struggled this year as the overall crypto market deteriorated. Nevertheless, experts trust the industry is here to stay and boasts the massive potential to transform our lives. You can share your thoughts below.


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