The pieces are falling into place to allow Microsoft to finalize its acquisition of Activision Blizzard following a US court decision to stop the Federal Trade Commission from blocking the merger. In the latest news, Sony with no moves left seems to have relented made an agreement for Call of Duty with Microsoft. In the UK, which remains the sole major resister to the deal, Microsoft may sell its cloud gaming business to appease the Competition and Markets Authority (CMA).
To appease global regulators, Microsoft has committed to keeping Call of Duty on other platforms for at least 10 years. Call of Duty is the goldmine franchise, the jewel in Activision's crown. Of course, the publisher also has other franchises such as Candy Crush, Diablo, and Warcraft. However, it is the availability of Call of Duty across platforms that has been important.
Microsoft has struck 10-year agreements with cloud gaming platforms like Boosteroid, mobile platforms like EE in the UK, and even gaming rival Nintendo. However, Sony has held out on such an agreement, despite Microsoft consistently saying it was willing to collaborate with its rival. In fact, Sony has been the biggest critic of the Microsoft/Activision Blizzard merger.
Sony has been urging regulators to block the deal, even suggesting Microsoft would sabotage Call of Duty on PlayStation. US courts shut down the FTC's bid to block Microsoft from buying Activision, leaving Sony with no room to manoeuvre. With Microsoft now likely to close the acquisition, Sony must either make an agreement or risk losing Call of Duty, a franchise it has admitted is “irreplaceable”.
From Day One of this acquisition, we've been committed to addressing the concerns of regulators, platform and game developers, and consumers. Even after we cross the finish line for this deal's approval, we will remain focused on ensuring that Call of Duty remains available on… https://t.co/hMWjC58wRi
— Brad Smith (@BradSmi) July 16, 2023
Microsoft gaming CEO Phil Spencer took to Twitter to confirm Sony has relented and agreed a deal to keep Call of Duty on PlayStation for 10 years. While the FTC is now appealing the US court decision, an agreement with Sony is likely to appease lawmakers even further and cement the acquisition. Microsoft's Vice Chair and President Brad Smith said the company is committed to openness with Call of Duty:
“From Day One of this acquisition, we've been committed to addressing the concerns of regulators, platform and game developers, and consumers. Even after we cross the finish line for this deal's approval, we will remain focused on ensuring that Call of Duty remains available on more platforms and for more consumers than ever before,” stated Smith.
Microsoft Considers Cloud Gaming Sale to Get UK Approval
While Microsoft now has a green light in most key markets, the UK's Competition and Markets Authority is still holding out. The CMA blocked the deal outright in June, leading Microsoft to suggest it would simply stop offering its cloud gaming, Xbox Game Pass, Xbox Cloud Gaming, and Call of Duty in the country.
The company did not explicitly say that, but did infer the UK was closed for business. At the same time, Microsoft is appealing the CMA's decision. Following the court ruling against the FTC in the US last week, the CMA and Microsoft went back into negotiations. Last week, the regulator said those negotiations could still lead to another investigation before a final decision is made.
Microsoft is reportedly considering selling its cloud gaming rights in the UK in order to get the UK Competition and Markets Authority (CMA) to approve its acquisition of Activision Blizzard. Bloomberg cites unnamed sources, says that Microsoft is considering selling its cloud gaming rights in the UK to a third-party company. It could be offered to a telecommunications company, a gaming publisher, an internet-based business, or even a private equity company.
