It has been Too bad year so far for dead, the company formerly known as Facebook, in very unique ways for being one of the largest technology companies in the world. Despite continuing to rack up $7 billion in profits in recent months, TikTok is eating its lunch, the stock price is in shambles, and even Kardashian got angry. Meta is now being sued by the Federal Trade Commission for its monopoly on VR . technology. It’s a shocking case that could have consequences for other big gaming acquisitions.
Recorded on the same day as Meta Latest bad earnings reportis FTC petition for injunction Against the company’s bid to acquire Inside, a virtual reality startup with a successful workout app It’s called supernatural. The agency literally called it an “illegal takeover of expansion.” [Meta’s] virtual reality empire In her press release,. Meta responded, claiming in a statement that the FTC’s argument is based on ideology rather than evidence, and will harm future developments in virtual reality.
“It’s a much more serious issue, but there’s one that they think is worth bringing in because if they succeed in that, it will help bring enforcement limits abroad,” said William Kovacic, former chair of the Federal Trade Commission. Tell New York times Wednesday. The case will be split in the coming weeks and months in California’s Northern District Court.
Why the FTC’s Meta lawsuit came as a surprise
Looking inside, it barely registers as an approximation over the billions Meta invests annually in VR development, it seems like an odd deal for the FTC to wind up in beast mode. But for antitrust advocates, it’s a perfect target for turning back the clock on years of lax law enforcement. After allowing Meta to beat competitor after competitor (the most famous of which are Instagram and WhatsApp), the FTC has to start somewhere.
Ron Knox, an anti-domestic self-help researcher, wrote, in yesterday’s topic. “[FTC Chair] No more, said Lina Khan, in this lawsuit against internal merging.
In 2020, Meta . has been controlled 62% of the market for VR headsets. In the first quarter of 2021, Oculus headphone shipments were formed 75% of the market (And only this week it announced that it will do so Increase the price by $100). This directs users to the Oculus Store for virtual reality apps. One of them is Supernatural, a very popular immersive fitness experience that allows you to meditate and practice yoga in virtual reality. Meta, like other big tech companies, has always had a philosophy of “if you can’t beat things, buy m”, and its work in virtual reality is the clearest example of this.
The headset technology, the Oculus Rift, was developed by Doom lead designer John Carmack and others, and was paid for in part by crowdfunding on Kickstarter. In 2014, Meta bought it for $2 billion. One of the most popular VR games ever was Saber won. It was bought by Meta in 2019. The company has since been hijacked A bunch of other virtual reality studios.
“If Meta is allowed to buy ‘in’, this competitive pressure will slow,” the Federal Trade Commission wrote in its announcement yesterday. “Reducing competition violates antitrust laws.” The agency continues to say that the same trend discourages other creators to innovate in this field.
What can it mean for games
It’s hard not to see some similarities with Microsoft’s current attempt Buy Activision Blizzard. The company has been on its own spending spree, devouring studios to feed endless content The oven that is Game Pass. In some ways, strategy comes back to buying Maine Craft in 2014. But the acquisition of Obsidian, InXile, Ninja Theory, and others in recent years shows that buying content rather than making its own was not a one-off. with BethesdaI got hits like DropsAnd the Sheikh manuscriptsAnd the the death. With Activision Blizzard you will get it Call of dutyAnd the DiabloAnd the candy crush.
One major difference is that Microsoft doesn’t have the same stranglehold on gaming hardware that the Meta has on VR. The Xbox maker has also gone out of its way to Try to reassure the FTC That nothing you do breaks the competition. In February, Microsoft committed to the App Store Opening Principles list and notified by the Federal Trade Commission that it will not make games like Call of duty And the Note and watch exclusive platform. In June she pledged to remain neutral regarding union activism, and persuaded US telecom workers to do so Express its support for the acquisition offer.
Notably, Sony’s acquisition of Bungie just went through without a hitch. That may be due to the FTC’s focus on traditional tech deals at companies like Apple and Google (the agency is currently investigating Amazon). At the same time, if Activision Blizzard were acquired, it would be the largest acquisition in the history of technology. Weirdly, Microsoft agreed to pay $95 a share, but Activision Blizzard stock is still trading at just $79. The deal is expected to expire by June 2023, and Microsoft has done it It said She already shared all the information the FTC was looking for. Once Activision Blizzard does the same, the agency will have 30 days to complete its review.