What you need to know
- Microsoft is trying to purchase Activision-Blizzard for $69 billion dollars.
- Sony is a huge opponent to the deal, traveling to regulators to speak out against the proposals, often using Call of Duty as a bargaining chip.
- Microsoft has said that it offered Sony a 10-year deal for Call of Duty, up from the previous 3-year offer.
- Sony has 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 dollar merger with Activision Blizzard.
Microsoft has been battling with regulators on both sides of the Atlantic to land approval for its megadeal for the creators of Call of Duty, Warcraft, Candy Crush, and various other major games. Microsoft has said that the deal is more about mobile gaming, 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 completely new audience on phones and tablets. The growing mobile gaming segment has become a dominating force in many major economies, and there’s no reason to think it won’t also start to eat into the relatively static console market as well in the coming years. To that end, Microsoft seeks to bring titles like Call of Duty Mobile into the fold, while also supporting its recent subscription service Xbox Game Pass with a bevy of new content, delivering games like Call of Duty Modern Warfare 2 for $10 per month alongside hundreds. Of other games, instead of picking up the game outright for $70, as is the current case.
One big opponent of the deal is Sony, who is Microsoft’s chief competitor in the console space. While most other publishers have generally said little to decry the deal, rival platform holders like PlayStation and Google have quietly (and not so quietly) expressed their “concern” to regulators that Microsoft could end up with too much power in the space should it seek to foreclose games like Call of Duty from their platforms. Microsoft has shot back, stating that it has 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 that was not good enough.
Now, a new report has suggested that Microsoft has conceded not three, but now ten years of Call of Duty access. Microsoft gaming CEO Phil Spencer has also been conducting various interviews to emphasize that there’s no plan to remove or degrade 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 “dominating” industries while claiming gamers’ “choices will disappear,” without explaining exactly what choices they’re referring to.
Analytically, I’ve written before how Sony knows it won’t lose access to the Call of Duty license, given that the game’s business model depends entirely on 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 per month absolutely truncates the $70 you have to pay to get the game on PlayStation right now.
The deal has become a focal point on big tech regulation for commentators across the media and political zeitgeist, as scrutiny over Facebook’s utter dominance in social media and Google’s total dominance in search algorithms has genuinely led to decreased competition and a whole range of problems that both companies have had to pay billions of dollars in fines for. Regulators may seek to draw parallels between those situations and the Microsoft-Activision deal as a result, with Sony exploiting the lack of knowledge on the game industry among legislators.