Khan: Microsoft Activision Buyout ‘Harming Gamers & Devs’ Amid Layoffs & Game Pass Hikes

Recent significant layoffs across Microsoft’s gaming divisions and fresh Game Pass price increases have drawn sharp criticism from former US Federal Trade Commission (FTC) chair Lina Khan. Taking to X (formerly Twitter), Khan asserted that these developments are precisely what the FTC predicted when it vigorously opposed Microsoft’s acquisition of Activision Blizzard in 2023.

FTC’s Warnings Foreshadowed Current Industry Shifts

Lina Khan, who led the FTC during the intense legal battle to block the Microsoft-Activision Blizzard deal, highlighted the direct correlation between market consolidation and negative outcomes for stakeholders. “Microsoft’s acquisition of Activision has been followed by significant price hikes and layoffs, harming both gamers and developers,” Khan wrote. She further elaborated, stating, “As we’ve seen across sectors, increasing market consolidation and increasing prices often go hand-in-hand.”

The FTC’s 2022 lawsuit to prevent the merger cited concerns that the deal was “reasonably likely to substantially lessen competition and/or tend to create a monopoly” within the burgeoning gaming market. Khan’s recent comments echo these original warnings, suggesting that dominant firms can become “too-big-to-care,” leading to adverse conditions for their customers without sufficient accountability.

Broken Promises: Microsoft and Activision’s Pre-Merger Stance

Before the deal’s finalization in October 2023, both Microsoft and Activision Blizzard had painted a different picture. Bobby Kotick, then CEO of Activision Blizzard, publicly stated in July 2023 that the merger would “benefit consumers and workers” and “enable competition” against entrenched market leaders. These assurances now stand in stark contrast to the subsequent events that have unfolded across the industry.

Post-Acquisition Reality: Widespread Layoffs and Cancellations

Despite promises of growth and benefit, the period following the Activision Blizzard acquisition has been marked by substantial workforce reductions and project cancellations:

• Just months after the deal closed, Microsoft laid off approximately 1,900 employees across Activision Blizzard and Xbox, including the cancellation of a highly anticipated survival game.
• Another 650 individuals were reportedly let go in September 2024.
• A further 9,000 employees were affected across Microsoft in July 2025, leading to multiple game cancellations and the closure of studios like The Initiative.

These cuts have prompted concern among employees, with some at ZeniMax describing “hollow” layoff emails and questioning how a “carcass of workers” is expected to “keep shipping award-winning games.”

Game Pass Prices On The Rise

In addition to job losses, gamers have faced escalating costs. The price of Game Pass Ultimate and PC Game Pass recently saw a significant jump, marking the second such increase since the Activision Blizzard acquisition concluded. The FTC had previously expressed strong disapproval regarding an earlier, smaller price hike in July 2024, underscoring persistent concerns over consumer value.

A Validated “I Told You So”

While Lina Khan’s comments on X, made after her replacement as FTC chair in January 2025, no longer carry regulatory weight, her “I told you so” resonates strongly within the gaming community and industry. Her warnings about the potential for harm to both gamers and developers through increased market consolidation appear to have materialized, prompting renewed debate about the long-term impact of such major corporate mergers on competition, innovation, and workforce stability.