Microsoft’s efforts to purchase Activision Blizzard just took a major hit with the Federal Trade Communications (FTC) filing a lawsuit to block it.

Microsoft announced a $68.7 billion deal in early 2022 to purchase Activision Blizzard, one of the biggest game studios in the industry. The deal sparked immediate concerns from rivals, especially Sony, that owning Activision could give Microsoft too much power in the game console market.

Regulators on both sides of the Atlantic launched investigations, with the UK’s Competition Authority launching a challenge to the deal. The FTC has followed suit, filing a lawsuit to prevent the deal from moving forward.

“Microsoft has already shown that it can and will withhold content from its gaming rivals,” said Holly Vedova, Director of the FTC’s Bureau of Competition. “Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.”

The FTC makes the case that Activision is part of a very small group of top-tier game publishers that produce games for multiple platforms. The FTC is concerned that Microsoft could alter that dynamic, ending development for multiple platforms in favor of its own Xbox.

Only time will tell if the FTC will prevail, but the odds of Microsoft’s deal moving forward just got much slimmer.