Microsoft promises to keep Call of Duty on PlayStation for next decade. Sony believes it
Redmond one step closer to $69B Activision Blizzard merger
Microsoft and Sony have signed a pact to keep Call of Duty games available for PlayStation consoles for the next ten years, clearing a major roadblock to Microsoft closing its $69 billion acquisition of Activision Blizzard.
The US Federal Trade Commission (FTC) and the UK Competition and Markets Authority (CMA) have attempted to overrule Microsoft's takeover of Activision, citing concerns that Microsoft would make the studio's games exclusive to the Windows giant's Xbox. The watchdogs argued that if Microsoft limited the availability of hugely popular Activision Blizzard titles like Call of Duty, it would slash the amount of choice for gamers and make it more difficult for rivals like Sony to compete fairly.
Microsoft, however, disagreed and claimed the acquisition would give players more choice and make gaming more affordable. In a bid to push the deal though, Microsoft previously attempted to negotiate with Sony, offering a ten-year vow to keep Call of Duty on the PlayStation. At the time, Sony declined the offer and doubled down to block the acquisition.
Now, the Japanese console giant has changed its mind, which presumably means Sony dropping its opposition to Redmond gobbling up another video game developer.
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"We are pleased to announce that Microsoft and PlayStation have signed a binding agreement to keep Call of Duty on PlayStation following the acquisition of Activision Blizzard," Phil Spencer, CEO of Microsoft Gaming, announced on Sunday. "We look forward to a future where players globally have more choice to play their favorite games."
The move comes just after a federal judge in northern California rejected the FTC's request for a temporary injunction blocking the Microsoft-Activision merger while the regulator scrutinized the deal further to build a legal case against the takeover.
"The court finds the FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition," the judge in that case ruled. "To the contrary, the evidence points to more consumer access to Call of Duty and other Activision content. The motion for a preliminary injunction is therefore denied."
The FTC appealed that decision, and was swiftly denied again by the Ninth Circuit. That means the US watchdog can't right now stop the takeover moving ahead. It's a race against time as Microsoft and Activision Blizzard are close to sealing their deal, and the FTC had hoped to start an administrative case against the acquisition next month.
It's worth pointing out that during the FTC's pursuit of its temporary injunction, it was revealed Sony gaming exec Jim Ryan had indicated in an email that he didn't see the exclusivity of titles to certain consoles as anti-competitive, and that he expected Call of Duty to appear on PlayStation for "many years to come."
Over in the UK, the CMA is in a tricky position. Officials opposed Microsoft's absorption of Activision back in April, and said the merger "could make Microsoft even stronger in cloud gaming, stifling competition in this growing market." Last week, the CMA extended its investigation into the acquisition, promising to conclude the probe by August 29 rather than July 18 as previously expected.
The watchdog signaled it hoped the situation could be discussed and worked out without litigation. On Monday, a tribunal in London paused Microsoft's appeal against the CMA's blockade of the deal for two months, giving both sides more time to figure out a resolution.
What isn't clear yet is if the takeover deal includes promises for other Activision Blizzard games for Sony's console line. Microsoft's history of leveraging its market dominance to lock out competition in the past has, no doubt, been on regulators' minds and while Call of Duty is massively popular and headline-grabbing, there are other ways Microsoft could potentially get an edge over rivals.
For instance, some might say Microsoft could promise to keep Activision Blizzard titles on PlayStation but quietly ensure they are optimized primarily for Xbox. We wouldn't dare dream of accusing Redmond of doing that; it probably wouldn't want the bad reviews, press, or lawsuits anyway, should that ever happen.
The Register has asked Sony for further comment. ®