Microsoft has sought long-term agreements with a variety of stakeholders in the gaming industry in order to gain regulatory favor; similarly, they also intended to acquire Activision Blizzard. However, Sony raised concerns about the Activision Blizzard deal and opposed it on legal grounds.
Sony raised concerns that the acquisition of Activision Blizzard will provide Microsoft with control of the industry and irreparably harm competition. Therefore, Microsoft offered Sony a ten-year agreement in December 2023 to ensure that Call of Duty would continue to be released on PlayStation.
However, the agreement was not signed because Sony was concerned that the PlayStation 5 and PlayStation 4 versions of the game would be compromised. They had reservations that the PlayStation version would be more expensive and would lack key features such as multiplayer and cross-play and also feared that future entries would be exclusive to Xbox Game Pass.
Now after months of discussion and negotiations, Xbox head Phil Spencer announced today that Microsoft has finally signed a binding agreement with Sony to keep Call of Duty on PlayStation. This news came off as a surprise amid the FTC’s efforts to halt the Activision Blizzard deal and Microsoft’s aggressive push to complete the acquisition.
The specific terms of the agreement have not been revealed, but it is likely to be similar to Microsoft’s previous 10-year agreements with companies such as Nintendo, Nvidia, and Ubitus. Since the two gaming giants clashed over the acquisition, it is safe to assume that the Xbox included some exclusive commitments to Sony.
It should be noted, however, that one regulator continues to oppose Activision Blizzard’s acquisition. The acquisition was blocked by the UK’s Competition and Markets Authority, and Microsoft and Activision Blizzard filed an appeal in the hopes of overturning the decision.
Afterward the FTC ruling, CMA and Microsoft agreed to put their legal battles on hold in order to reach an agreement. Now both parties are scheduled to meet in a case management conference at the UK’s Competition Appeal Tribunal. Therefore now the CMA is the sole opponent of the Activision Blizzard acquisition.
If this acquisition goes through, it will be one of the biggest in gaming history, costing Microsoft a whopping $70 billion, nearly ten times what it paid for Starfield and Fallout developer Bethesda back in 2021.
