FTC Considers Sony’s Bungie Acquisition As Gaming Merger Oversight Becomes More Aggressive
The Federal Trade Commission is reportedly opening an investigation into Sony’s proposed acquisition of Bungie, marking a notable increase in federal oversight of gaming mergers at a time of major industry consolidation.
According to sources speaking to The Information, last week the FTC began seeking more information about the deal in an investigation that could potentially delay completion by six months or even more. Though no closing date was announced alongside the original announcement, The Information reports that it could be pushed back to early 2023.
The FTC is reportedly focused on concerns that Sony may be motivated to block competing companies and services like Xbox from accessing Bungie’s games like Destiny 2. That means examining how popular Destiny is and whether a possible restriction would significantly harm Sony’s competitors and create antitrust violations. While Sony has publicly committed to keeping Bungie games cross-platform, its ability to restrict both current titles and future releases in the future is an issue of antitrust concern.
This investigation is another sign of the FTC’s recent, more aggressive approach to potential antitrust issues in the gaming industry. While it is customary for the FTC to delve into large deals, the onslaught of large gaming acquisitions in recent years, as well as the growing size of such deals, seems to have prompted closer scrutiny, particularly under Biden-appointed FTC Chairwoman Lina Khan.
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In February, for example, reports indicated that the FTC was similarly investigating Microsoft’s proposed acquisition of Activision Blizzard to determine whether it would harm consumers, partners or competitors. And Khan has spearheaded a planned crackdown on merger policies and has similarly pushed a block on a proposed Nvidia acquisition and reopened an antitrust case against Meta.
The FTC’s investigation doesn’t necessarily mean the acquisition will be significantly affected, especially given the immense legal challenge required to ultimately block a deal. However, the increased scrutiny of the games and technology sector will likely be factored into future acquisitions as more large companies express interest in expanding a growing number of in-house studios and the industry continues to consolidate.
Update 4:08pm PT: In response to a request from IGN, the FTC declined to comment.
Rebekah Valentine is a news reporter for IGN. You can find her on Twitter @duckvalentine.
https://www.ign.com/articles/ftc-probing-sony-bungie-acquisition-oversight-aggressive FTC Considers Sony’s Bungie Acquisition As Gaming Merger Oversight Becomes More Aggressive