Microsoft’s $69 billion deal to acquire Activision Blizzard, one of the world’s largest video game publishers, faces antitrust investigations by regulators in as many as 16 countries. The Satya Nadella-led software giant has been working to get approval from regulators in the US and Europe to compete for its January deal to acquire the video game giant. But Sony, perhaps the biggest name in gaming, has objected that it will lose access to the successful Call of Duty franchise if Microsoft acquires Activision Blizzard.
If the $69 billion deal goes through, Microsoft will become the world’s third-largest game publisher by revenue. The move could help Microsoft gain full control of Activision Blizzard’s game library, giving the Xbox maker leverage over Sony’s PlayStation when it comes to releasing games through the lucrative Game Pass subscription service.
Here’s a sneak peek at the latest developments in Microsoft’s ongoing bid to acquire Activision Blizzard.
Sony claims Activision merger would turn “PlayStation into Nintendo.”
In a 22-page response to the UK’s Competition and Markets Authority (CMA), Sony explained that Microsoft’s purchase of Activision Blizzard aims 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 claims the Redmond-based company wants “PlayStation to become like Nintendo,” which will weaken Sony’s position to compete directly with Xbox.
FTC “likely” to file lawsuit to block Microsoft-Activision Blizzard merger
The Federal Trade Commission (FTC), an independent agency of the U.S. federal government that prevents unfair or deceptive trade practices, is “likely” to file an antitrust lawsuit to block Microsoft’s proposed $69 billion acquisition of Activision Blizzard. Though the FTC has yet to make an official announcement, the Politico report said that “a lawsuit against the deal is not guaranteed.” The FTC argues that if Microsoft could buy Activision Blizzard, one of the largest third-party game publishers, it would give the company an unfair advantage in the market. Earlier this month, the European Union launched “a full investigation” into the proposed deal.
Microsoft offered Sony a 10-year deal to keep Call of Duty
Call of Duty is at the center of a corporate dispute between Xbox and PlayStation over Microsoft’s $69 billion deal to acquire Activision Blizzard. according to a New York Times Microsoft reportedly told Sony it would be proposing a 10-year deal to keep Call of Duty on the PlayStation. Sony has yet to say publicly if it even received an offer to license the Call of Duty franchise on PlayStation for 10 years. Previously, PlayStation CEO Jim Ryan announced that Microsoft had only offered to keep Call of Duty on the PlayStation platform for another 3 years. Xbox boss Phil Spencer has repeatedly claimed that Xbox would not remove the Call of Duty franchise from PlayStation. Call of Duty has always been one of the most popular FPS franchises with a huge following generating billions in revenue.
Sony has more “exclusive” games than Xbox
In its bid to persuade the UK’s Competition and Markets Authority (CMA), which is conducting an in-depth review of Microsoft’s proposed purchase of Activision Blizzard, the Redmond-based company said Sony’s first-party games are “better quality.” The argument carries weight because console exclusives are critical to the console’s long-term success. Sony makes more money from console exclusives than Microsoft, but its business model has worked and made PlayStation what it is today. One point Microsoft never made in its argument is that Xbox gamers can access Microsoft’s exclusive deals through the Game Pass subscription service without paying full price for games.
“Sony is not only the dominant console vendor, but also a powerful game publisher,” Microsoft wrote in its response to the CMA. “Sony is about the size of Activision and almost twice the size of Microsoft’s games publishing business.” The company went on to add that “in 2021 there were over 280 first- and third-party exclusive titles on PlayStation, almost five times that as many as on Xbox”.