Regulators have been against the Microsoft-Activision takeover deal because of concerns that Microsoft will pull popular games like Call of Duty out of PlayStation. However, it appears that fear will be put to rest following Microsoft’s signing of a binding agreement that will keep the Call of Duty video game franchise on Sony’s PlayStation after the Microsoft-Activision takeover.
Microsoft made the disclosure on Sunday, July 16, 2023, further easing the tension that existed between the Xbox maker, the Federal Trade Commission (FTC), and Sony’s PlayStation.
“We are pleased to announce that Microsoft and PlayStation have signed a binding agreement to keep Call of Duty on PlayStation following the acquisition of Activision Blizzard,” Microsoft Gaming’s CEO, Phil Spencer, shared in a tweet. “We look forward to a future where players globally have more choice to play their favorite games.”
The $69 billion Microsoft-Activision takeover deal has suffered a series of setbacks but on July 11, a federal judge failed to block the deal, a decision that didn’t go down well with the FTC. The FTC argued that, if the Microsoft-Activision takeover was allowed to continue, it would hurt consumers, regardless of the platform they play because Microsoft may shut out players on its rival PlayStation platform.
In the July 11 ruling, Judge Jacqueline Scott Corley said “The FTC has not shown it is likely to succeed on its assertion the combined firm will pull Call of Duty from PlayStation, or that its ownership of Activision content will substantially lessen competition in the video game library subscription and cloud gaming markets”.
Microsoft will license Call of Duty to Nintendo for 10 years
On Sunday, Microsoft signed an agreement to license Call of Duty to rivals. With Nintendo, the Xbox maker signed a 10-year contract—if the Microsoft-Activision takeover deal becomes a success. Although the company also signed a licensing deal with Sony, the duration of the license was not disclosed.
“From day one of this acquisition, we’ve been committed to addressing the concerns of regulators, platform and game developers, and consumers,” tweeted Microsoft’s president, Brad Smith. “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.”
Microsoft is racing to beat the July 18 deadline for the completion of the deal to acquire Activision—although both companies could extend the deadline. However, the longer it takes to seal the deal, the more Activision may lose motivation to keep going.
Although EU regulators gave the nod for the deal to proceed, Microsoft met roadblocks with UK and US regulators who argued that it would give the Xbox maker an unfair advantage in the cloud gaming market. However, the Competition and Markets Authority said it was willing to negotiate with Microsoft—and it appears the negotiation is already yielding some success.
On Monday, July 17, Microsoft’s appeal was formally paused by a London tribunal to give the parties more time to reach a resolution. Microsoft and the CMA had already asked for a two-month stay of the case. Consequently, the Competition Appeal Tribunal (CAT) ruled on Monday that the full hearing of Microsoft’s appeal earlier scheduled for July 28 should be adjourned.
Microsoft’s big wins at the U.S. courts
Hopes for the successful completion of the Microsoft-Activision takeover deal reignited last week after Microsoft recorded strings of successes at the federal district court and a U.S. appeal court. Following Corley’s ruling, the FTC approached a U.S. appeal court which also declined to temporarily block the acquisition.
The FTC argued that a preliminary injunction was vital to forestall harm to video game consumers since Microsoft could withhold Call of Duty and other popular titles from cloud gaming services or competing consoles. However, Corley said Microsoft will not have the incentive to do so.
Corley argued that the Xbox maker would benefit more from licensing its games to other consoles and making them as widely available as possible. It’s already July 18 and we are eager to know what happens next.
Follow all the development on the Microsoft-Activision takeover deal here.
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