Microsoft still needs to get approval from more than 10 regulators across the globe to close the acquisition of Activision Blizzard. The company is now also trying to reach an agreement with PlayStation regarding the future of Call of Duty.

Microsoft offered Sony a 10-year deal to keep Call of Duty on PlayStation

On November 11, Microsoft offered Sony a 10-year deal to keep Call of Duty on PlayStation, the company told the New York Times. Sony, however, declined to comment on the matter.

It is unclear why the Japanese company rejected another proposal from Xbox. But it is safe to say that Sony will continue to oppose the $68.7 billion deal, citing potential harm to its customers and market competition in general as the main reasons.

“If this deal had happened four years ago, this would hardly be of any interest,” Microsoft president Brad Smith told the publication. “If one cannot do something easy, then we’ll all know you can’t do something hard.”

Tension between Microsoft and Sony over Call of Duty

  • In January, Microsoft promised to keep Call of Duty on PlayStation “for at least several more years” beyond Sony’s current agreement with Activision.
  • In February, Microsoft wrote in a blog post that it will continue to “make Call of Duty and other popular Activision Blizzard titles available on PlayStation through the term of any existing agreement with Activision” and beyond.
  • Sony later told the Brazilian regulator that Call of Duty is such a unique IP that it is almost impossible to compete with. That’s why it strongly opposed Microsoft’s acquisition of Activision Blizzard.
  • In September, Sony Interactive Entertainment CEO Jim Ryan called Xbox’s proposal about the future of Call of Duty “inadequate on many levels.”
  • Sony then argued that the $68.7 billion deal “would have major negative implications for gamers and the future of the gaming industry.”
  • Last month, Microsoft Gaming head Phil Spencer said the company will continue to ship Call of Duty on PlayStation “as long as there’s a PlayStation out there to ship to.”

Regulatory pressure is rising

  • After announcing its intent to buy Activision Blizzard, Microsoft faced investigations from regulators in 16 countries. As pointed out by the New York Times, only Brazil and Saudi Arabia have approved the deal so far.
  • Microsoft believes that Serbia will also clear the transaction soon, but it will still have to persuade other governments to approve it.
  • Right now, the three key regulators — UK’s Competition and Markets Authority (CMA), the US Federal Trade Commission (FTC), and the European Commission — remain skeptical of the acquisition.
  • The CMA is now conducting an in-depth investigation (expected to end by March 1, 2023), believing that the transaction could harm Sony and other Microsoft rivals.
  • The European Commission also recently opened an in-depth probe, worrying that Microsoft could make Activision Blizzard games exclusive to the Xbox ecosystem.
  • According to the New York Times, more than 10 people at the FTC are now reviewing the deal. The regulator has serious concerns about it. It is worth noting that the Commission’s chair Lina Khan openly opposes the market dominance of big tech companies.

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