Microsoft completed its approximately $69 billion acquisition of Activision Blizzard on October 13, 2023. The Federal Trade Commission failed to stop the transaction in U.S. federal court, and the Ninth Circuit affirmed that result on May 7, 2025. But “Microsoft won” is an incomplete description: the company made major access commitments and transferred specified cloud-streaming rights outside the European Economic Area to Ubisoft before the deal could close worldwide.
The case established a narrower point. The FTC did not show, on the preliminary-injunction record, a sufficient likelihood that Microsoft would use Activision’s games to substantially lessen competition. That was not a ruling that the merger could never harm consumers or that every future Microsoft decision would be lawful.
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The outcome in one view
- Deal: Microsoft agreed to acquire Activision Blizzard for approximately $69 billion, bringing franchises such as Call of Duty, World of Warcraft, Diablo, Overwatch and Candy Crush into the Xbox owner’s portfolio.
- U.S. district court: The FTC’s request for a preliminary injunction was denied in July 2023.
- Ninth Circuit: The denial of emergency relief was affirmed on May 7, 2025.
- FTC administrative case: The complaint was dismissed and the matter listed as closed on May 22, 2025.
- Closing: Microsoft completed the acquisition on October 13, 2023, after the U.K. Competition and Markets Authority approved a restructured transaction.
See the FTC case record, the Ninth Circuit opinion and Microsoft’s closing announcement.
What the FTC was trying to stop
The FTC described the transaction as a vertical merger: Microsoft operated consoles, PC distribution, Xbox Game Pass and Xbox Cloud Gaming, while Activision supplied valuable game content. Microsoft also owned Bethesda parent ZeniMax, whose franchises include The Elder Scrolls and Fallout. The FTC’s complaint argued that ownership of Activision could let Microsoft disadvantage rivals in three connected areas.
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Console gaming
Call of Duty was the central example. The FTC alleged that Microsoft could make the series exclusive to Xbox, delay or degrade PlayStation versions, or otherwise worsen access. It pointed to Microsoft’s conduct after buying ZeniMax, including exclusivity for some Bethesda releases, as evidence relevant to future incentives.
Multigame subscriptions
The FTC argued that Activision’s catalog could strengthen Xbox Game Pass while weakening competing services. Possible theories included giving Game Pass earlier or better access, charging rival subscriptions more, delaying releases, reducing features or using the catalog to raise rivals’ costs.
Cloud gaming
The agency also alleged that Microsoft could reserve Activision games for Xbox Cloud Gaming or impose unfavorable licensing terms on competing services. Cloud streaming was still developing, making the case an early test of whether it should be treated as a distinct competitive channel or as another way to distribute games. The FTC’s challenge announcement and the district court findings describe these theories.
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A preliminary injunction is not a final judgment on the entire dispute. The FTC had to show a sufficient likelihood of success on its antitrust claim and justify stopping the deal before it could close. The court concluded that the FTC had not met that burden.
Ability was not the same as likely conduct
The court could accept that Microsoft would have the ability to restrict Activision content after the acquisition without accepting that foreclosure was the likely, commercially rational strategy. Microsoft earned substantial revenue from selling Call of Duty and related services to PlayStation users and from licensing content to other distributors. Restricting that audience could sacrifice revenue.
Commitments affected the probability of harm
Microsoft offered or entered agreements intended to preserve access to Call of Duty and other Activision content. The court considered those commitments alongside Microsoft’s commercial incentives and the evidence about subscription and cloud markets.
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Consumer benefits were part of the record
The FTC’s theories had to be weighed against evidence that Game Pass could offer consumers access to a larger catalog and that broad distribution could continue generating sales and engagement. The ruling did not find that these benefits were guaranteed; it found the FTC’s showing insufficient for the extraordinary relief it requested.
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1Fix the driver behind crashes, sound loss and screen glitches2Clear out junk files and repair common Windows errors3Scan for outdated or missing drivers - takes under a minuteThe important distinction is between ability to foreclose, incentive to foreclose and the competitive effect of any foreclosure. The FTC identified a plausible risk, but the court required evidence that the risk was likely and sufficiently harmful under the preliminary-injunction standard.
What the Ninth Circuit affirmed—and what it did not
On May 7, 2025, the Ninth Circuit affirmed the denial of preliminary injunctive relief. It addressed the FTC’s theories concerning console devices, gaming subscriptions and cloud services, but its decision was procedural and evidentiary in scope.
- It upheld the refusal to stop the transaction.
- It did not conduct a post-merger economic audit.
- It did not declare every future Microsoft decision involving Activision content lawful.
- It did not make all platform-content mergers presumptively harmless.
- It decided that the FTC had not met the applicable preliminary-injunction burden on the record before the court.
The separate FTC administrative proceeding was later dismissed on May 22, 2025. That proceeding should not be confused with the federal court action seeking emergency relief. The FTC dismissal timeline records the administrative case’s closure.
Why Microsoft’s rival agreements mattered
Access commitments were central to the courts’ assessment of likely conduct, but they were not equivalent to selling a business or removing Microsoft’s ability to control content.
Call of Duty access
Microsoft made arrangements involving Sony, Nintendo and Nvidia, among others. The Sony agreement, signed July 15, 2023, covered continued Call of Duty availability on PlayStation and PlayStation Plus, according to an FTC filing.
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A contract can reduce the probability of immediate foreclosure, but its duration, scope, enforcement provisions and covered products matter. A Call of Duty promise does not automatically settle questions about other Activision franchises, Game Pass pricing, cloud licensing, quality degradation or future business models.
Cloud-provider arrangements
Microsoft also reached arrangements with cloud-gaming providers. These agreements gave the courts evidence about Microsoft’s expected conduct, while leaving open the practical question of how terms would operate over time.
Why the United Kingdom required a different solution
The CMA initially blocked the transaction, focusing on the risk that Microsoft would use Activision content to strengthen an already significant position in cloud gaming and weaken current or future rivals. Its merger inquiry record shows that the transaction was later restructured rather than simply approved on its original terms.
Under the remedy, Ubisoft received control of specified Activision cloud-streaming rights outside the European Economic Area for current games and future games released during the following 15 years. Ubisoft, not Microsoft, controls licensing of those rights; it cannot grant Microsoft or its affiliates an exclusive license, and Microsoft cannot receive materially preferential pricing or treatment. Microsoft must provide Ubisoft versions materially equivalent to the non-streaming games. The details are described in an FTC filing.
This was materially different from promising to keep Call of Duty on PlayStation. The Ubisoft arrangement transferred control over a defined cloud-rights package, addressing the CMA’s concern about Microsoft controlling both the content and the distribution channel.
How the three jurisdictions differed
| Jurisdiction | Core concern | Outcome or remedy |
|---|---|---|
| United States | Possible foreclosure in consoles, subscriptions and cloud gaming | Preliminary injunction denied; Ninth Circuit affirmed; administrative complaint dismissed in May 2025 |
| United Kingdom | Cloud-gaming foreclosure | Initial prohibition, followed by approval after the Ubisoft cloud-rights restructuring |
| European Union | Access and competition in cloud gaming | Commitments allowing consumers in the EEA to stream Activision PC and console games through eligible cloud services of their choice |
The European Commission’s approach is summarized in Microsoft’s European cloud-commitments explanation. These outcomes should not be treated as contradictory verdicts under one identical test. The regulators used different institutions, market definitions, evidence and remedies.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Five lessons for future technology mergers
1. Vertical integration is not automatically safe
Owning content and a distribution platform creates genuine antitrust exposure, even when the businesses operate at different levels of the supply chain.
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Random freezes, missing sound and display glitches usually trace back to one bad driver. Find and replace yours safely.Free scan · under a minute2. The government must prove likely foreclosure
The existence of a theoretical ability to withhold content is not enough. Agencies must connect that ability to likely incentives and a material effect on competition.
3. Incentives can cut both ways
A platform owner may gain by favoring its own service, but it may also lose sales, licensing revenue and audience reach by restricting rivals. Courts examine both sides.
4. Remedies can determine whether a deal closes
Microsoft prevailed in the U.S. emergency litigation, yet long-term access commitments and a major cloud-rights transfer were important to completing the transaction globally. Behavioral promises and structural remedies are not interchangeable; effectiveness depends on scope, duration, monitoring and enforcement.
5. Global approval is not a single process
A U.S. court’s refusal to issue an injunction does not resolve a U.K. regulator’s cloud-market concern. Future mergers involving app stores, streaming services, software ecosystems, artificial intelligence or digital marketplaces will face similarly jurisdiction-specific analysis.
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What this means for consumers and investors
Keeping Call of Duty available on competing consoles can preserve consumer choice, but it does not answer every business question. Pricing, subscription bundles, game quality, access to other franchises and cloud-service licensing can still affect competition. Likewise, the case does not prove that the completed merger produced no harm; it establishes that the FTC did not obtain the relief needed to stop it and later closed its administrative complaint.
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For executives evaluating a platform-content acquisition, the practical warning is clear: regulators will examine the merged firm’s ability, incentives and likely effects separately. For investors, regulatory clearance may depend not only on whether a deal survives litigation, but also on whether concessions change the economics and control rights of the transaction.
Frequently Asked Questions
Did the Ninth Circuit rule that Microsoft’s acquisition was fully lawful?
No. It affirmed the denial of the FTC’s preliminary injunction, not a universal declaration that every aspect of the merger or future conduct is lawful.
Did Ubisoft acquire Activision’s games?
No. Ubisoft received specified cloud-streaming rights outside the EEA for current Activision games and qualifying future releases, not ownership of the games themselves.
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Why did the FTC administrative case remain separate?
The federal court action sought emergency relief before closing. The FTC’s internal administrative proceeding followed a separate procedural track and was dismissed on May 22, 2025.
The Bottom Line
Microsoft won the immediate U.S. court battle, but the transaction was not an unconditional regulatory victory. The FTC’s theory exposed real risks when a platform owner buys valuable content; the courts simply found that likely foreclosure was not proved strongly enough for a preliminary injunction. The CMA’s Ubisoft remedy showed why a deal can survive in the United States yet require a structural change elsewhere.
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