Microsoft-Activision Merger Foretold Troubles, Former FTC Chair Lina Khan Argues
Teh actions taken by Microsoft as completing its acquisition of Activision Blizzard in October 2023 – including critically important job cuts and price increases – are unfolding exactly as the US Federal Trade Commission (FTC) warned, according to former FTC chair Lina Khan. khan, who lead the FTC’s challenge to the deal, voiced her concerns on X, stating that increased market consolidation frequently enough leads to higher prices for consumers.
The FTC initially filed a lawsuit in 2022 to block the acquisition, fearing it would “substantially lessen competition and/or tend to create a monopoly” within the gaming industry. Despite the ongoing legal battle, Microsoft finalized the deal in October 2023. since then, a series of unfavorable outcomes have emerged, lending credence to the FTC’s initial concerns.
“Microsoft’s acquisition of Activision has been followed by significant price hikes and layoffs, harming both gamers and developers,” Khan wrote on X on October 3, 2025. “As we’ve seen across sectors, increasing market consolidation and increasing prices often go hand-in-hand.” She further cautioned that “as dominant firms become too-big-to-care, they can make things worse for their customers without having to worry about the consequences.”
Microsoft and Activision Blizzard previously maintained that the merger would benefit both consumers and employees. Bobby Kotick, then CEO of Activision Blizzard, stated in July 2023 that the merger would “enable competition rather than allow entrenched market leaders to continue to dominate our rapidly growing industry.” However, the reality following the acquisition has painted a different picture.
Just months after the deal closed, Microsoft initiated a wave of layoffs, impacting 1,900 workers at Activision Blizzard and Xbox. The company also cancelled a highly anticipated survival game. Further workforce reductions followed in September 2024, with another 650 employees losing their jobs. In July 2025, Microsoft announced a broader restructuring, eliminating 9,000 positions across the company, shuttering The Initiative studio, and cancelling additional game projects – even as Xbox boss Phil Spencer asserted the company’s gaming business “never looked stronger.”
Adding to the concerns, microsoft has implemented multiple price increases for its gaming subscription services. The cost of Game Pass Ultimate and PC game Pass has risen significantly this week, marking the second price hike since the Activision Blizzard acquisition. The FTC had previously criticized an earlier, smaller price increase in July 2024.
Khan’s current comments,while pointed,do not carry official regulatory weight. She was replaced as FTC chair in January 2025 with the inauguration of President Donald Trump. Still, many observers believe her assessment to be a justified “I-told-you-so,” given the sequence of events following the merger.
Why did this happen? The FTC, under Lina Khan, feared the acquisition would create a monopoly in the gaming industry, leading to higher prices and less innovation. microsoft argued the merger would increase competition.
Who was involved? Key players included Microsoft, Activision Blizzard, Lina Khan (former FTC chair), Bobby Kotick (former Activision Blizzard CEO), and Phil Spencer (Xbox boss).
What occurred? Microsoft acquired Activision Blizzard in October 2023. Afterward,layoffs,game cancellations,and price increases followed.
How did it end? While the merger went through, former FTC chair Khan argues the outcome validates the FTC’s initial concerns about reduced competition and increased costs for consumers. The situation continues to unfold, with ongoing scrutiny of Microsoft’s actions.
