Sony Says It Won’t Make Bungie Games Exclusive, But FTC May Not Be Convinced

Sony’s acquisition of Destiny 2’s Bungie studio may have hit a speed bump as The information reports that the US Federal Trade Commission has launched an “in-depth investigation” of the agreement.

The investigation began in late April, according to the report, and is apparently primarily focused on the possibility of Sony making Bungie games, including the Destiny series, exclusive to PlayStation consoles. Bungie said immediately after the acquisition deal was announced that it will essentially continue to operate regardless and “running a unified Bungie community”, a position we found entirely reasonable.

The FTC appears to have doubts, however, and has asked for more input from Sony and Bungie to determine what kind of incentive Sony has to withhold some or all of Bungie’s games and services from other platforms. The process can delay the closing of the deal by up to six months.

The FTC’s increased scrutiny of acquisitions like this one might seem unusual (I don’t recall hearing any regulatory turmoil when Microsoft spent twice as much money to buy Bethesda Softworks, which – with all due respect to Destiny 2 fans out there – was a much bigger deal), but it’s possible that future acquisitions of this magnitude could face similar resistance. In July 2021, US President Joe Biden issued a executive order urging the FTC to enforce antitrust laws “fairly and vigorously”, saying his administration’s policy is “to enforce antitrust laws to address the challenges presented by new industries and technologies”.

The FTC appears to be taking this mandate seriously: in January 2022, it announced a joint public inquiry with the US Department of Justice to strengthen and modernize federal merger guidelines and their enforcement “to better detect and prevent illegal and anti-competitive business in today’s modern markets.”

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Other sectors of the US government have also started to watch out for high-profile acquisitions in the gaming industry. In March, US Senators Elizabeth Warren, Bernie Sanders, Cory Booker and Sheldon Whitehouse sent a letter to FTC Chair Lina Khan, criticizing Activision Blizzard CEO Bobby Kotick’s “golden parachute” and asking the agency to “assess whether the ways in which these companies have failed to protect the rights and dignity of their workers are motivated by monopsony [an economics term, not what happens when Sony buys too many game developers] power or represent anti-competitive harm in our labor market”.

Numerous public interest groups, including the Communications Workers of America – which have supported efforts to establish game development industry unions– sent a open letter on its own in March, asking the FTC to “perform a thorough review of the agreement with the objective of ensuring open, fair and competitive markets”.

An FTC representative declined to comment on the report, including to confirm or deny its occurrence. I’ve reached out to Sony and Bungie for comment and will update if I get a response.

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