The American Fair Trade Commission (FTC) last week blocked Microsoft’s attempt to acquire Activision Blizzard, claiming that the USD$69 billion (£56.2 billion) deal would enable the tech giant to stifle its rivals.
According to the FTC’s complaint, Microsoft used previous acquisitions, including ZeniMax Media, to make several high-profile upcoming titles exclusive to devices powered by its software, including the space exploration game Starfield and the vampire shooting game Redfall.
However, Microsoft has frequently stated that if the purchase is completed, it will not be the world’s leading gaming company, and it has committed to distributing popular “Call of Duty” titles on gaming platforms other than those owned by Microsoft (Xbox).
As a result, the business has recently been compelled to make certain compromises in order to win over regulators because its proposed acquisition of Activision Blizzard is currently encountering a number of obstacles.
Sony Avoided The Offer Twice!
Microsoft came back with a far better offer when Sony complained in public that its previous proposal to retain ‘Call of Duty on the PlayStation for three years was “inadequate in many aspects.”
Sony’s decline of the 3-year offer was countered by Microsoft with a 10-year proposal last month, which to date, is denied by Sony again. The proposal was intended to assist Microsoft in avoiding scrutiny from authorities who are opposed to the deal, like the FTC.
As a reason for the decline, Sony went on to state that the deal would have significant “negative implications” on gamers and the future of the gaming industry by giving Microsoft control of Activision games like Call of Duty.
Sony and regulators have already raised the potential risk of Microsoft making Xbox Game Pass the only subscription service with access to Call of Duty games.
In the second quarter of 2022, Sony’s PlayStation Plus game subscription service had 45.4 million subscribers, making it one of the top competitors.
However, contrary to such claims, Microsoft stated in October that PlayStation’s user base would remain “significantly larger” than Xbox even if every COD player abandoned Sony, while in August it stated that making Call of Duty exclusive to Xbox “would simply not be profitable” for the company.
If data on the mainstream media are correct, Microsoft including subscription service rights in its Call of Duty offer to Sony virtually eliminates the risk of the company giving preferential treatment to its own Xbox Game Pass service.
Microsoft intends to offer future Call of Duty games and other Activision Blizzard titles on Xbox Game Pass from the start, but Sony is reportedly free to offer Call of Duty games to PlayStation Plus subscribers as well.
.Microsoft earlier this month revealed it had also reached a 10-year agreement to bring Call of Duty to Nintendo if its buyout of Activision Blizzard is successful, in addition to the mentioned offer to Sony.
Sony and regulators will need to come up with another justification for why Microsoft’s acquisition of Activision Blizzard will harm competition and gamers if the company isn’t going to treat Call of Duty differently.
A move like this by a federal regulator could cause the Microsoft deal to fail, even though the FTC’s action does not mean that their game is over. The Department of Justice sued AT&T in 2011 when the company tried to combine with T-Mobile in a $39 billion deal. Later that year, AT&T canceled the agreement.
Microsoft Blizzard Deal
Microsoft wants to pay $69 billion for the merger, but if the deal goes through, it will become the owner of several popular video games, including Candy Crush, Overwatch, World of Warcraft, and Call of Duty.
These video games are among the most widely played in the entire world, with millions of users spending billions on subscriptions and in-game purchases.
In short, if the purchase is approved, it will be the largest takeover of a company by another in gaming history.