FTC Abandons Fight Against Microsoft’s $69B Activision Blizzard Deal

The U.S. Federal Trade Commission (FTC) has dropped its legal challenge to Microsoft’s $69 billion acquisition of Activision Blizzard, the maker of blockbuster video game “Call of Duty,” citing that pursuing the case against the already-closed deal is not in the public interest.

The decision, announced Thursday, marks a significant shift under new FTC Chairman Andrew Ferguson, who is aligning the agency’s priorities with President Donald Trump’s agenda.

The move follows the FTC’s loss in a May 7 appeal to reverse a judge’s ruling that declined to block the deal, which finalized in 2023. Microsoft hailed the decision as a win for gamers and regulatory clarity, while the FTC’s pivot signals a broader reevaluation of its antitrust efforts, including abandoning a separate case against PepsiCo for alleged price discrimination.

Strategic Shift at the FTC

Under Chairman Ferguson, appointed in early 2025, the FTC is redirecting resources toward cases that align with the current administration’s goals. This includes a new probe into whether advertisers colluded to reduce spending on the X platform, a case that has gained traction amid concerns over digital market fairness.

Ferguson is moving away from some of the aggressive antitrust actions pursued by his predecessor, Lina Khan, who had targeted high-profile mergers like Microsoft’s acquisition of Activision Blizzard.

The FTC’s decision to drop the case reflects a pragmatic approach, as unwinding a completed merger is a rare and complex process. Real-time data shows Microsoft’s stock (MSFT) rose 0.51% to $451.23 on Thursday, reflecting investor confidence in the resolution.

Microsoft’s Victory and Market Impact

The Activision Blizzard deal, the largest in video game industry history, was initially challenged by the FTC over concerns it would stifle competition in the console, subscription, and cloud gaming markets.

The agency argued that Microsoft could leverage the acquisition to dominate rivals to its Xbox platform and Game Pass service.

However, a federal judge’s ruling in 2023 allowed the deal to proceed, and the FTC’s subsequent appeal failed. Microsoft President Brad Smith celebrated the FTC’s decision, stating it benefits “players across the country and common sense in Washington, D.C.”

Since the acquisition, Microsoft has expanded Activision titles like “Call of Duty: Black Ops 6” to Game Pass, boosting subscriber growth to an estimated 34 million as of Q1 2025, a 13% increase year-over-year.

Did You Know?
The $69 billion Microsoft-Activision deal, finalized in 2023, was the largest acquisition in gaming history, surpassing Take-Two Interactive’s $12.7 billion purchase of Zynga in 2022.

Broader Implications for Antitrust Enforcement

The FTC’s decision not to pursue a July trial to unwind the merger highlights the challenges of post-closing antitrust actions. Typically, the FTC aims to prevent mergers from closing, as temporary halts often lead to their abandonment.

The Microsoft-Activision case, however, proceeded despite initial resistance, setting a precedent for future mega-mergers. The FTC’s shift comes amid other dropped cases, such as one against PepsiCo for alleged price discrimination favoring Walmart, signaling a recalibration of enforcement priorities.

Industry analysts suggest the FTC may now focus on emerging issues like AI and digital advertising, with the X probe indicating a new frontier in antitrust scrutiny.

Gaming Industry’s Evolving Landscape

The Microsoft-Activision deal has reshaped the gaming industry, strengthening Microsoft’s position against competitors like Sony and Nintendo.

Post-acquisition, Microsoft has integrated Activision’s portfolio, including “World of Warcraft” and “Diablo,” into its ecosystem, driving cloud gaming adoption.

Market data indicates global gaming revenue reached $223 billion in 2024, with Microsoft capturing a 12% share, up from 9% pre-acquisition.

The FTC’s withdrawal may embolden further consolidation, though consumer groups warn of potential price hikes and reduced innovation.

For now, gamers benefit from expanded access to titles, but the long-term impact on competition remains uncertain.