Microsoft: Layoffs Planned Before Activision Takeover, FTC Complaint

In the gaming industry, Microsoft has issued a statement in response to the Federal Trade Commission (FTC)'s recent complaint about layoffs at their company. The FTC had filed a complaint related to the job cuts happening at Microsoft, which now includes Activision Blizzard following their acquisition. This followed an earlier attempt by the FTC to block the acquisition through a lawsuit, which was unsuccessful. Microsoft's lawyers have claimed that Activision Blizzard had already planned significant layoffs prior to the acquisition, suggesting the current job cuts are not entirely due to the merger.

Microsoft further states that the FTC's continued opposition to the deal fails to recognize the significant changes made to the transaction. After losing the lawsuit in July, Microsoft was instructed by the UK Competition and Markets Authority to restructure the acquisition globally. Consequently, Microsoft does not hold cloud streaming rights for Activision Blizzard games in the United States. Additionally, a deal was cemented between Sony and Microsoft to keep Call of Duty on PlayStation platforms under better terms than previously established.

The dispute highlights regulatory and operational challenges surrounding major acquisitions in the gaming industry. Despite the layoffs and the FTC's concerns, the agreements made between Microsoft and Sony, along with Microsoft's restructuring efforts, seem to support a continued multiplatform presence for Activision Blizzard games, including popular titles like Call of Duty. This suggests that while corporate structures might change, the availability of games across platforms, at least for key franchises, may remain consistent for the foreseeable future.

Background Information: Activision Blizzard is one of the largest game developers and publishers in the gaming industry, known for blockbuster franchises such as Call of Duty, World of Warcraft, and Overwatch. The acquisition of Activision Blizzard by Microsoft, a deal valued at around $68.7 billion, is one of the biggest in the history of the technology and gaming sectors. The move is part of Microsoft's larger strategy to strengthen its gaming and cloud streaming services, as well as to bolster the library of games available on its Xbox Game Pass subscription service. This acquisition, once finalized, will significantly shift the gaming landscape by bringing a major publisher under the direct control of one of the big players in the console hardware market.