When Lina Khan’s Federal Trade Commission sued to block Microsoft’s $69 billion acquisition of Activision Blizzard, critics called it overreach. Now, two years after the deal closed, the fallout looks eerily familiar to the warnings Khan laid out in court filings, interviews, and public statements. Price hikes, layoffs, and diminished consumer choice have followed the merger, and Khan is making it clear that she saw it coming.
Lina Khan and the FTC were correct to challenge Microsoft’s proposed acquisition of Activision Blizzard because the merger posed real risks of consolidation that could reshape competition across consoles, subscription libraries, and cloud gaming. Khan’s theory of harm centered on vertical integration enabling Microsoft to leverage Activision content to disadvantage rivals, a concern that anticipated price, access, and investment distortions in downstream markets.
The FTC’s legal campaign, however, leaned heavily on a narrower, Sony-driven framing of the threat—one focused on the one-way risk that Microsoft would withhold or degrade Call of Duty on PlayStation—rather than fully developing broader, structural arguments about future consolidation and gatekeeper power. Courts found that the evidence submitted fell short of showing likely foreclosure or substantial lessening of competition, noting the remedial deals Microsoft struck and the limited evidentiary showing on the key foreclosure theories.
In a recent post on X (formerly Twitter), Khan wrote, “Microsoft’s acquisition of Activision has been followed by significant price hikes and layoffs, harming both gamers and developers.” She shared a chart showing Game Pass Ultimate’s price doubling since the merger was finalized, now reaching $30 per month. That’s a 50% increase in less than two years, despite Microsoft’s earlier assurances that the deal would not lead to higher costs for consumers.
Back in 2023, Microsoft told regulators that Game Pass prices would remain stable and that the addition of Activision titles would offer “substantial benefits.” But as Ethan Gach reported in Kotaku, the opposite has happened. Call of Duty titles are now part of Game Pass, but the subscription cost has ballooned, and players still pay $70 for à la carte access on console and PC. The UK’s Competition and Markets Authority also raised concerns about pricing during the merger review, which now appear prescient.
Khan’s critique goes beyond pricing. She’s pointed to widespread layoffs across Microsoft’s gaming division, including cuts at Activision Blizzard, as evidence of post-merger consolidation harming workers. In a February 2024 FTC letter, the agency cited Microsoft’s “reduced investments in output and product quality via employee layoffs” as hallmarks of a firm exercising market power.
This isn’t just a gaming issue, it’s a broader antitrust concern. Khan has repeatedly argued that when dominant firms consolidate, they often become “too-big-to-care,” prioritizing shareholder returns over consumer welfare and innovation. Microsoft’s recent decisions, including scaling back certain Game Pass features and centralizing control under its CoreAI division, reflect that pattern.
The FTC ultimately lost its legal battle to block the merger, and Microsoft closed the deal in October 2023. But Khan’s warnings have gained renewed traction as the consequences unfold. In interviews and public commentary, she’s emphasized that antitrust enforcement isn’t just about winning cases, it’s about setting expectations and documenting harm.
As Push Square noted in its coverage, Khan is “having the last laugh” as Microsoft’s post-merger behavior validates her concerns. The company’s pursuit of profitability has led to service degradation, higher prices, and reduced competition—exactly what the FTC feared.
Khan’s stance is part of a larger reckoning around tech consolidation. Whether it’s gaming, cloud infrastructure, or AI, regulators are increasingly scrutinizing how mergers reshape markets. Microsoft’s acquisition of Activision Blizzard may have passed legal muster, but the public and political fallout is far from over.
For gamers, developers, and industry observers, the lesson is clear: consolidation comes at a cost. And Lina Khan was one of the few willing to say so before the bill came due.
This consolidation renews scrutiny of Microsoft’s current and future gaming decisions and has likely eaten through much of the goodwill the company accumulated in prior years. The Game Pass price hike risks producing the opposite outcome from the service’s original intent by forcing many players to be more selective about what they play and where they play as economic headwinds influence household spending.
With a significantly reduced proprietary console base to anchor player habits, Microsoft is vulnerable if subscribers trim libraries or abandon cloud-first play. Sony could benefit from that shift through a more stable installed base, a larger social network of active players, and a catalog that feels more immediately playable. The merger’s short-term gains for Microsoft may therefore come at the cost of long-term ecosystem influence and consumer trust.
