What do you want to know
- Microsoft is trying to buy Activision-Blizzard for $69 billion.
- Sony is a huge opponent of the deal, going to regulators to denounce the proposals, often using Call of Duty as a bargaining chip.
- Microsoft said it offered Sony a 10-year contract for Call of Duty, up from the previous 3-year offer.
- Sony declined to comment.
A new report in the New York Times has given us an update on the ensuing drama between Microsoft and regulators over its $69 billion merger with Activision Blizzard.
Microsoft has battled with regulators on both sides of the Atlantic to get approval for its mega-deal for the creators of Call of Duty, Warcraft, Candy Crush and various other major games. Microsoft said that the deal is more about mobile games, where Microsoft’s footprint is relatively small in an industry dominated by Chinese giants like Tencent.
Merging with Activision would give Microsoft the tools it needs to bring Xbox games and Xbox developers to a whole new audience on phones and tablets. The growing mobile games segment has become a dominant force in many major economies, and there’s no reason to think it won’t also start to eat away at the relatively static console market in the years to come. To that end, Microsoft is looking to integrate titles like Call of Duty Mobile, while supporting its fledgling subscription service. Xbox Game Pass with a slew of new content, offering games like Call of Duty Modern Warfare 2 for $10 a month alongside hundreds of other games, instead of picking up the game for $70 like it is now.
One of the main opponents of the deal is Sony, which is Microsoft’s biggest console competitor. While most other publishers generally haven’t said much to decry the deal, rival platform owners like PlayStation and Google have quietly (and not so quietly) expressed “concern” to regulators that Microsoft could end up with too much power in space if it seeks to exclude games like Call of Duty from their platforms. Microsoft hit back, saying it had no plans to remove Call of Duty from PlayStation at least, initially offering Sony a 3-year contract that would guarantee access to the game. Playstation previously said it wasn’t good enough.
Now a new report suggested Microsoft didn’t concede three, but now Ten years of access to Call of Duty. Microsoft Gaming CEO Phil Spencer has also conducted various interviews to stress that there are no plans to remove or downgrade Call of Duty on PlayStation, despite Sony’s claims to the contrary. Sony declined to comment on the 10-year licensing deal report while claiming that Microsoft has a “history” of “dominant” industries while claiming that “gamer choices will disappear”, without explaining exactly which choices they refer.
Analytically, I have already written how Sony knows it won’t lose access to the Call of Duty license, given that the game’s business model is entirely dependent on it being available literally anywhere and everywhere. Sony is more concerned about losing a bargaining chip and value proposition since Call of Duty in Xbox Game Pass for $10 a month absolutely exceeds the $70 you have to pay to get the game on PlayStation in this moment.
The deal has become a big tech regulatory focal point for media commentators and political zeitgeist as scrutiny of Facebook’s total dominance in social media and Google’s total dominance in search algorithms has truly led to less competition and a whole host of issues that both companies have had to shell out billions of dollars to fines for. Regulators may seek to draw parallels between these situations and the Microsoft-Activision deal as a result, with Sony exploiting the lack of gaming industry knowledge among lawmakers.