Microsoft has signed a 10-year binding agreement to let Sony keep Activision Blizzard’s blockbuster game Call of Duty on its PlayStation platform.
“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,” said Microsoft’s Head of Xbox Phil Spencer in a tweet on the weekend.
“We look forward to a future where players globally have more choice to play their favourite games,” he said.
The agreement goes some way to addressing the US Federal Trade Commission’s concern that Microsoft’s acquisition of Activision Blizzard would not be in the interest of competition in the games industry, and would lead to a Microsoft/Xbox monopoly.
The agreement came as the FTC lost a last ditch effort to stop the acquisition following last week’s Federal Court ruling which gave the green light to the $US69bn deal. The FTC had sought an injunction pending further court action. That new loss means there is little standing in the way of the acquisition in the US although the UK’s Competitions and Markets Authority (CMA) blocked the deal there.
This new agreement between Microsoft and Sony looks set to pave the way for the CMA to drop its opposition.
However, little is known about the scope of the deal. For example, can Sony make the game available through its PlayStation Plus subscription platform or just as a standalone acquisition? Does the agreement cover other Activision Blizzard games such as World of Warcraft or only Call Of Duty? Does it cover future editions of Call of Duty?
Microsoft’s biggest advantage from its Activision Blizzard acquisition will be the new games developed by the acquired Activision Blizzard going forward, and its intellectual property. Activision Blizzard will probably be supercharged financially as a Microsoft/Xbox entity.
The signing of the deal is acknowledgement by Sony of the inevitability of the Microsoft acquisition and offers some comfort for what is a major loss.
This, and the fact the US courts denied any FTC appear on the weekend, will probably be enough to satisfy the UK regulator. It already softened its stand against the acquisition by narrowing the scope of its investigation. In March, CNBC reported that the CMA no longer regarded the deal as anti-competitive although it retained misgivings about prices and innovation in the games market.
After last week’s judgement in favour of Microsoft, the CMA appears to have softened its stand further, saying it is prepared to resolve any antitrust concerns with Microsoft.
