Microsoft CEO Satya Nadella says $69 billion Activision takeover won’t harm the competition

In the gaming world, exclusivity drives sales of both video games and consoles. Microsoft, Sony and Nintendo often lock popular games in exclusive contracts, in the hope that gamers stick to a particular platform. Nintendo’s high-performing games in the Zelda and Super Mario Bros series are exclusive to its Switch console.

Microsoft is outrightly buying big game developers to better compete with Sony in the video games market. (Image credit: Microsoft)

Activision Blizzard CEO Bobby Kotick made similar arguments, ensuring the regulators that Call of Duty would remain on Sony’s PlayStation platform, which is a direct competitor to Microsoft’s Xbox. Call of Duty, one of the most lucrative game franchises in the world, is at the center of a legal battle surrounding Microsoft’s proposed $69 billion acquisition, the purchase of COD owner Activision Blizzard. Recently leaked court documents as part of the trial confirmed that Call of Duty accounted for over $1 billion in sales on PlayStation consoles in 2021.

“It would cause reputation damage to the company,” if Call of Duty was removed from the Sony console, Kotick said. “We’ve always said that we are a multiplatform company and we’d be available on every platform.”

Microsoft has offered Sony a 10-year deal agreement to make Activision’s Call of Duty games available on Sony’s PlayStation consoles the same day they reach Xbox consoles. Sony hasn’t accepted Microsoft’s offer and is opposed to Activision’s takeover by Microsoft.

Microsoft says it has lost the console war against Sony’s PlayStation. (Image credit: Anuj Bhatia/Indian Express)

“I believe this transaction is bad for competition,” said James Ryan, the head of Sony Interactive Entertainment. Ryan’s comments were played in court during this week’s hearing between the Federal Trade Commission and Microsoft.

Microsoft has already made it clear that it wants to bring high-profile AAA games on its subscription-only Game Pass on day one. Sony argues that if Microsoft buys Activision Blizzard, it would control the chain from top to bottom, hurting Sony the most. Microsoft competes with Sony and Nintendo in the video games market, but remains in last place, according to the Redmond giant. With the acquisition, Microsoft will have a better chance to compete with the competition.

The Federal Trade Commission is seeking a preliminary injunction to Microsoft’s proposed acquisition of Activision Blizzard from closing it before the deal’s July 18 deadline. The FTC had already sued Microsoft to block the $69 billion deal. The case is set to go before the administrative law judge in August.