Microsoft’s $69 billion deal to acquire Activision Blizzard, one of the biggest video game publishers in the world, is facing an antitrust investigation by regulators in as many as 16 countries. The Satya Nadella-led software behemoth has been working to get approval from regulators in the US and Europe to compete for its January agreement to take over the video gaming giant. But Sony, perhaps the biggest name in the gaming world, has raised objections which it claims will lose access to the hit Call of Duty franchise if Microsoft scoops up Activision Blizzard.
If the $69 billion deal goes through, Microsoft will become the third-largest game publisher in the world by revenue. The move might help Microsoft to have full control over Activision Blizzard’s library of games, giving the Xbox maker leverage over Sony’s PlayStation when it comes to putting out games on the lucrative Game Pass subscription service.
Here’s a sneak peek at the latest developments in Microsoft’s ongoing attempt to acquire Activision Blizzard.
In a 22-page response to UK’s Competition and Market Authority (CMA), Sony stated that Microsoft’s purchase of Activision Blizzard is aimed to make PlayStation similar to Nintendo by taking Call of Duty away from them. Microsoft argues that Nintendo has been successful without Call of Duty but Sony alleges that the Redmond company wants “PlayStation to become like Nintendo,” which will weaken Sony’s position to directly compete with Xbox.
The Federal Trade Commission (FTC), an independent agency of the US federal government that prevents unfair or deceptive trade practices, will ‘likely’ file an antitrust lawsuit to block Microsoft’s proposed $69 billion takeover of Activision Blizzard. Although the FTC has made no official announcement yet, the Politico report says “a lawsuit challenging the deal is not guaranteed.” The FTC argues that if Microsoft is able to purchase Activision Blizzard, one of the biggest third-party game publishers, would give the company an unfair advantage in the marketplace. Earlier this month, the European Union “opened a full-scale investigation” into the proposed deal.
Call of Duty is at the centre of a corporate battle between Xbox and PlayStation over Microsoft’s $69 billion deal to acquire Activision Blizzard. According to a New York Times report, Microsoft told Sony that it would propose a 10-year deal to keep Call of Duty on the PlayStation. Sony is yet to publicly make a comment on whether it has even received an offer to license the Call of Duty franchise for 10 years on PlayStation. Previously, PlayStation CEO Jim Ryan revealed that Microsoft had only offered to provide additional 3 years of Call of Duty on the PlayStation platform. Xbox head honcho Phil Spencer has repeatedly made claims that Xbox would not pull the Call of Duty franchise away from PlayStation. Call of Duty has consistently been one of the most popular FPS franchises with a massive fan following, generating billions in revenue.
In its attempt to convince the UK’s Competition and Markets Authority (CMA), which is conducting an in-depth review of Microsoft’s planned purchase of Activision Blizzard, the Redmond company said Sony’s first-party games “are better quality.” The argument has weight to it because console exclusives are critical to the success of the console in the long run. Sony makes more money from console exclusives than Microsoft, but its business model has worked and made PlayStation what it is today. A point Microsoft never touched upon while making its argument is that Xbox gamers can access Microsoft’s exclusives through the Game Pass subscription service without paying full price for games.
“In addition to being the dominant console provider, Sony is also a powerful game publisher,” Microsoft wrote in its response to the CMA. “Sony is roughly equivalent in size to Activision and nearly double the size of Microsoft’s game publishing business.” The company further added that “there were over 280 exclusive first- and third-party titles on PlayStation in 2021, nearly five times as many as on Xbox.”