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

Sony’s acquisition of Destiny 2 studio Bungie may have hit a downturn, as The Information reports that the US Federal Trade Commission has launched a “thorough investigation” into the deal.

The investigation began in late April, according to the report, and is apparently primarily focused on the possibility that Sony could make Bungie games, including the Destiny series, exclusive to PlayStation consoles. Bungie said immediately after the acquisition deal was announced that it would continue to operate primarily independently and “lead a unified Bungie community,” a stance we found to be entirely reasonable.

The FTC seems to have questions, however, and has reportedly requested more information from Sony and Bungie to determine what kind of inducement Sony should withhold some or all of Bungie’s games and services on other platforms. The process could delay closing the deal for up to six months.

The FTC’s scrutiny of acquisitions like this may seem unusual (I don’t recall hearing such regulatory heckling when Microsoft spent twice as much money buying Bethesda Softworks, which – with all due respect to Destiny 2 fans out there – was a much bigger deal), but it’s possible that future buyouts of this magnitude will face similar resistance. In July 2021, US President Joe Biden issued an executive order calling on the FTC to enforce antitrust laws “fairly and vigorously,” saying his administration’s policy is “to enforce antitrust laws to meet the challenges posed by new industry and technology”.

The FTC appears to be taking this mandate seriously: in January 2022, it announced a joint public inquiry with the U.S. Department of Justice aimed at strengthening and modernizing federal merger guidelines and enforcement “to better detect and prevent mergers.” illegal and anti-competitive agreements in today’s modern markets”. .”

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Other parts of the US government have also become wary of large-scale acquisitions in the video game 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 calling on the agency to “evaluate whether the means by which these companies have failed to protect the rights and dignity of their workers are driven by monopsony [an economics term, not what happens when Sony buys too many game developers] power or amount to anti-competitive harm in our labor market. »

Many public interest groups, including the Communications Workers of America – which has supported efforts to establish unions in the game development industry – sent their own open letter in March, asking the FTC “to ‘to undertake a careful review of the agreement with an eye to ensuring open, fair and competitive markets.’

A representative for the FTC declined to comment on the report, including confirming or denying its completion. I’ve reached out to Sony and Bungie for comment and will update if I get a response.

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