On January 19, 2022, Microsoft announced that they had agreed to purchase the influential video game-producing conglomerate, Activision Blizzard, for a whopping $68.7 billion, the most any company has ever paid to acquire a game company. Activision Blizzard’s reputation and value had deteriorated over time due to its many internal issues ranging from mishandling sexual misconduct cases to mass layoffs of developers. To say the least, the company known for prominent video games such as Overwatch, World of Warcraft, and Call of Duty was in dire need of reform. By purchasing the company, Microsoft has added all games previously held under Activision Blizzard to its catalog of renowned games such as Minecraft, Halo, or Forza, while also inheriting all the issues of Activision Blizzard. However, while this transaction processes, there are important economic issues to consider.

While it is seemingly a miracle for Activision Blizzard, Microsoft’s role in the acquisition raises questions about economic and legality concerns. For context, before the purchase, Activision Blizzard represented one of the largest game development companies in its field, valued at approximately $60 billion. Microsoft is valued at $2.2 trillion and is only rivaled by other tech giants such as Google, Facebook, or Amazon. This acquisition calls into question the role of antitrust legislation and whether the American government will disallow this purchase as monopolistic and uncompetitive.

If this transaction passes through the government, there could be drastic consequences on the industry as a whole. For one, it would destroy competitiveness within the industry, lowering the overall quality of output from Microsoft and prominent video games that millions of people enjoy. But it would also set a dangerous precedent for antitrust law because it condones monopolization in growing industries such as game development. Whatever the decision of the American government, only time will tell whether the game development industry will maintain healthy competition.

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