Microsoft Settles Players’ Activision Blizzard Acquisition Lawsuit

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Key Takeaways

  • Microsoft has settled an antitrust lawsuit filed in 2022.
  • The lawsuit was filed by players hoping to block the company’s $69 billion acquisition of Activision Blizzard.
  • Though details of the settlement were not disclosed, the deal struck means the lawsuit cannot be refiled.

An antitrust lawsuit filed by gamers from multiple US states against Microsoft and Activision Blizzard in 2022 has been settled, with lawyers agreeing that each party would “bear their own costs and fees” according to The Hollywood Reporter.

The lawsuit, which was signed off on the date of the acquisition, October 13th, 2023, reached its one year anniversary this week before it was settled on Monday.

Gamers were unhappy over the prospect that Microsoft would gain a monopoly following the acquisition of Activision Blizzard. They expressed concerns that some games may be canceled and that the company would prioritize Xbox versions of multiplatform games. 

There were also questions raised about the acquisition’s impact on Game Pass subscribers and whether prices would be raised for subscriptions and games.

At the time, Microsoft responded to the lawsuit, saying it made “unsupported and implausible claims.”

Yesterday the lawsuit was dismissed “with prejudice,” meaning it can’t be refiled.

Microsoft’s Post-Acquisition Mass Layoffs Raise Concerns

Microsoft has implemented various changes since the acquisition, most notably mass layoffs of around 1,900 Activision Blizzard employees in January 2024.

In a new letter filed to a US federal appeals court in March, the Federal Trade Commission (FTC) argued that this contradicted claims Microsoft made during the acquisition. In response, the company insisted that Activision Blizzard already had plans in place for the layoffs, whether or not the acquisition proceeded.

In total, Microsoft has cut 2,250 staff from its gaming business since it acquired Activision Blizzard, also closing numerous studios.

Key members of staff have left the business, with Activision Blizzard CEO Bobby Kotick departing in December 2023 and Blizzard president Mike Ybarra leaving at the start of 2024. Blizzard’s previously announced survival game was also canceled.

FTC Filing Slams Game Pass Tier Changes and Price Hikes

Though Microsoft decided to release Call of Duty: Black Ops 6 across PlayStation, Xbox, and PC, it has made substantial changes to Game Pass, as players feared.

These include adding Activision Blizzard games, removing day-one releases from the new basic tier, and ensuring major releases such as Call of Duty and Diablo 4 are only available to Game Pass Ultimate and PC Game Pass subscribers.

It has also raised the price of Game Pass Ultimate in the US by $3 per month, from $16.99 to $19.99, likely in a bid to claw back some of its $69 billion investment in the acquisition.

An FTC filing on July 9th slammed the price rises and new tiers, calling the standard tier “a degraded product” for removing day-one releases while introducing a price increase. From the filing:

“Product degradation – removing the most valuable games from Microsoft’s new service – combined with price increases for existing users is exactly the sort of consumer harm from the merger the FTC has alleged.”

In response Microsoft argued that the new basic tier of Game Pass now offers multiplayer functionality, and that Game Pass Ultimate now offers many new games available “day-and-date.”