Microsoft's $69B Activision Deal Voted Down By FTC — But Video Game Firm's CEO Confident 'Deal Will Close'

The U.S. Federal Trade Commission says it is seeking to block Microsoft Corporation’s MSFT  $69 billion acquisition of Activision Blizzard, Inc ATVI.

What Happened: FTC alleged that the deal — which is Microsoft’s largest ever and the largest in the video gaming industry — would enable the Satya Nadella-led company to “suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.”

The Commission voted 3 to 1 in favor of a complaint against the deal which will now go before the agency’s administrative law judge. 

See Also: Best Video Game Stocks Right Now 

Activision CEO Bobby Kotick on Thursday said in a letter to employees that FTC’s decision to challenge the deal could sound “alarming” to them.

“I want to reinforce my confidence that this deal will close. The allegation that this deal is anti-competitive doesn't align with the facts, and we believe we'll win this challenge.”

Microsoft Vice Chair and President Brad Smith responded, “While we believed in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present our case in court,” CNBC reported.

Why It Matters: FTC noted that Activision was “one of only a very small number of top video game developers” that create and publish high-quality video games such as “Call of Duty,” “World of Warcraft,” “Diablo,” and “Overwatch.”

The agency said that Activision’s current strategy is offering its games on many devices regardless of producer.

“That could change if the deal is allowed to proceed. With [Microsoft] control over Activision’s blockbuster franchises,” said FTC. 

On Wednesday, Microsoft announced a 10-year deal to bring Call of Duty to Nintendo’s consoles following its acquisition of Activision.

Read Next: Apple Bolsters iCloud Security With 3 New Features To Thwart Sophisticated Hackers