Microsoft made a bold move when it agreed to acquire Activision Blizzard for the monumental sum of $68.7 billion earlier this year, but the deal has been facing many challenges since then.
For one, Sony – Microsoft’s main competitor in the gaming console space – has been making efforts to complicate the deal as much as possible. Microsoft has made attempts to appease the situation by making compromises with their plans for the IPs they’d be acquiring, but now the FTC (U.S. Federal Trade Commission) is suing Microsoft for the acquisition.
This doesn’t mean the deal cannot go through, as it still must go through a judge that will determine if the lawsuit is valid, but it can become a major hurdle if it does.
According to the FTC, the acquisition of Activision Blizzard would give Microsoft too much power over renowned gaming IPs, which they could limit to their own gaming platforms (which encompasses the XBOX and Windows ecosystem) and unfairly hurt competitors.
And the catalog of IPs that would come with Activision Blizzard is gigantic: Call of Duty, Diablo, and World of Warcraft, to name a few. It also includes King, the creators of Candy Crush, and a number of other similar mobile games. The latest entry in the Call of Duty series, Modern Warfare 2, was released on October 28th and has already raked in more than $1 billion in sales.
Sony has been hammering Call of Duty as a point of contempt. The first-person shooter that’s now almost 20 years old has a number of critically-acclaimed and highly successful entries but has recently found huge success with the free-to-play model in Warzone, the series takes on the battle royale genre, and the soft-reboot of the “Modern Warfare” series.
Call of Duty Modern Warfare was originally released in 2008 and marked a major leap in the series with its modern-day combat, as opposed to the World War II theming that the series started with. In 2019, the Modern Warfare title was rebooted with the same name and marked a new high for the series. Call of Duty has typically been available across all platforms – PC, Playstation, and XBOX (plus a mobile entry).
Sony is concerned that with the acquisition, Microsoft would make Call of Duty console-exclusive to XBOX, which would prevent a large portion of the game’s player base rooted in Playstation from experiencing the series – and of course taking all the revenue with them.
This is a pretty interesting discussion because Sony has made a name for itself by having high-quality exclusives to encourage console sales – and only recently they’ve started porting some of those exclusives to PC.
Microsoft has never been known for its exclusives, with a few notable exceptions such as Halo and Gears of War making some ripples, but Sony has always had the advantage in this regard. Playstation is often celebrated for titles such as God of War, The Last of Us, Horizon, Bloodborne, and Uncharted. Even the highly-anticipated Final Fantasy XVI set to release June 2023 will be a timed PlayStation exclusive for a few months before becoming available on other platforms (this is because the Final Fantasy IP is owned by Square Enix, not Sony, but Sony has an exclusivity deal with Square Enix). Likely also why the biggest MMO in the world right now, Final Fantasy XIV, is only available on Playstation and PC.
Microsoft certainly seems interested in securing some exclusives of their own though, because very recently they acquired Bethesda, who published/developed games like Skyrim, Fallout 3 and 4, DOOM Eternal, Dishonored, and Deathloop. All of these titles and more have been made available on Game Pass, Microsoft’s subscription service for XBOX that offers a catalog of games for download.
Notably, Bethesda Studios’ new IP and highly anticipated project, Starfield, has already been confirmed to be an XBOX/PC exclusive. It’s not crazy to assume that after spending almost $69 billion in the acquisition of Activision/Blizzard, some of their IPs, if not all, would be turned into exclusives.
But Phil Spencer, the head of XBOX, has made public that he doesn’t want to prevent Call of Duty from being available on Playstation. Microsoft has already made public that they offered to keep Call of Duty on PlayStation for 10 more years, and even more recently, Phil Spencer made clear that Sony would be allowed to offer Call of Duty titles on their own subscription service, Playstation Plus, just as they would on Game Pass for XBOX.
The 10-year deal has apparently been declined by Sony.
Considering the monumental scale of this acquisition, there’s still a lot to unfold before the deal goes through. It remains to be seen if the FTC’s lawsuit will stand, but even so, it doesn’t seem like Microsoft is done running this obstacle course.