 Hours after the surprise announcement that Microsoft will attempt to purchase Activision Blizzard for an eye-watering $68.7 billion, the FTC announced plans to dramatically overhaul the process by which corporate mergers and buyouts are approved. This wasn't a direct response to the Activision deal, but it wasn't entirely unconnected. Over the past couple of years, a turbulent economy has seen more and more power consolidated among fewer and fewer companies within the tech industry. Even with the law as it currently stands, analyst David Cole thinks that the Activision buyout is a regulatory nightmare. He said, There will be a great deal to work out here and getting it past government regulators will be a major hurdle. This includes not just the US, but around the globe where Activision Blizzard products are sold, including the European Union, China, etc. The approval process is likely to be long and not guaranteed. The reason regulatory bodies are so antsy is because this kind of deal is inherently anti-consumer. It's bad news for everybody. Before we explore this further, we want to make it clear that this isn't an attack on Xbox, quite the opposite in fact. We know that a vocal portion of the Xbox community can be very defensive of these kinds of deals, and if you're just happy that Call of Duty will now be free as part of your Game Pass subscription, that's entirely valid. What we want to focus on instead is the long-term effects that this kind of acquisition can have on the gaming industry as a whole. Historically speaking, these deals come with complications. First things first. Many of you have asked that we simply answer the question, why is the buyout happening in the first place? It's simple. Activision Blizzard is too small. No, really. That's what Activision's CEO and alleged bad guy Bobby Kotick has claimed in interviews. He said, you'd think, oh, we're this big company and have these great resources, but when you're comparing us to, you know, two trillion dollar companies and three trillion dollar companies and trillion dollar companies to five hundred billion dollar companies, you realise we may have been a big company in video gaming, but now when you look at the landscape of who the competitors are, it's a different world today than ever before. This is the problem at the heart of the buyout. Even as one of the biggest companies in gaming, Activision is struggling to compete with increasingly powerful competitors in the tech sector, hence the buyout. The concern is that this only makes the matter worse. If you've ever played the board game Monopoly, you'll understand why its monopolies aren't all that much fun. The first half of the game involves a mad dash to consolidate resources, then the second half of the game is a long, drawn-out slog, as the player with the best stuff slowly gobbles up everyone else. This in essence is the danger before us. For a practical example, let's talk about the movie industry. In the early 20th century, the Hollywood studio system saw the entirety of the American movie industry controlled by just five studios – Paramount, RKO, MGM, Warner Brothers, and Fox. The so-called Big Five controlled more than just movie production. They also owned movie theatres and in some cases even celluloid film manufacturing. Because the Big Five controlled every aspect of movie production and distribution, nobody could challenge them. They set the terms of actor contracts, they decided which films were shown in which cinemas and when. This led to poor working conditions, high ticket prices, and a general lack of innovation and artistic freedom. This is known as vertical integration and it's terrible for everyone except company owners. The studio system was ultimately abolished in 1948, following the United States versus Paramount lawsuit. It was ruled that this level of vertical integration was too poisonous for the industry to be allowed. Microsoft, Nintendo and PlayStation have achieved a similar level of vertical integration. They make games, they own console hardware, and they own storefronts in which these games are sold. At present though, there's still plenty of AAA game studios that remain independent. According to analysts, Call of Duty alone creates antitrust issues. This game series, the most popular console franchise, is played by around 50% of all Xbox and PlayStation owners each year, says David Cole. The big issue is if Call of Duty becomes a Microsoft exclusive. Right now I don't think it will. For one thing, it would be hard to get it past regulators if they want to lock the competition out. If Call of Duty can only be played on Xbox, then the balance of power shifts too far into Microsoft Tans. Fans will be forced to buy Xbox hardware or a game pass subscription, and that means they're forced to accept Microsoft's terms. The concern is that, once in control of a large enough portion of the gaming market, and as the only company offering a substantial game subscription service, Microsoft can then raise prices to whatever they choose. The company already tried this last year, attempting to increase the cost of Xbox Live, so as to strong-armed subscribers into simply switching to the slightly more expensive game pass. The reason these efforts failed was because of Xbox's competitors. Both Sony and Nintendo offer far cheaper online subscription services, so consumers refuse to pay Microsoft's higher price point. As much as the game industry is divided into factions, Xbox, PlayStation, Nintendo, that one guy who's still proud of his Sega for life tattoo, the truth is, multiple platforms are good for everyone. If any one company controls too much of the industry, the result, historically, is always anti-consumer. That's the moral of the story. Diversity makes things better for everyone. The more variety there is across the gaming industry, the more fun everyone can have.