Microsoft President and Vice-Chair Brad Smith asserted in a recent guest post for The Wall Street Journal that the company is attempting to experiment in the gaming industry, much like Netflix did against Blockbuster, and compared Sony’s hostile response to that of the former market leader in video rentals.
In addition, Smith verified the suspected 10-year agreement for Call of Duty to be released on PlayStation on the same day, and he added that Microsoft might agree to the similar arrangement for additional platforms.
Sony has emerged as the loudest objector. It’s as excited about this deal as Blockbuster was about the rise of Netflix. The main supposed potential anticompetitive risk Sony raises is that Microsoft would stop making “Call of Duty” available on the PlayStation. But that would be economically irrational. A vital part of Activision Blizzard’s “Call of Duty” revenue comes from PlayStation game sales. Given the popularity of cross-play, it would also be disastrous to the “Call of Duty” franchise and Xbox itself, alienating millions of gamers.
That’s why we’ve offered Sony a 10-year contract to make each new “Call of Duty” release available on PlayStation the same day it comes to Xbox. We’re open to providing the same commitment to other platforms and making it legally enforceable by regulators in the U.S., U.K., and European Union.
Smith emphasised that Activision Blizzard titles are necessary for Microsoft to make Game Pass more enticing, which, in his opinion, would benefit customers by allowing them to access a huge number of titles for a single fee, similar to Netflix. He added that the acquisition is important to compete in a market that is largely controlled by Apple and Google on mobile and Sony and Nintendo on consoles.
In fact, Microsoft Gaming CEO Phil Spencer has already emphasised that the major goal of the acquisition is to strengthen the company’s presence on mobile platforms.The Microsoft President also made mention of the agreement between the corporation and the Communication Workers of America, whereby the latter pledged to maintain a neutral stance as various employee groups sought to organise. As a result, Microsoft received the CWA’s support for the Activision Blizzard agreement.
Regulators in Saudi Arabia and Brazil have approved the Activision merger, while the UK’s Competition and Markets Authority has opted to conduct a second round of its inquiry. In order to get everyone’s perspectives before making a decision, it is currently seeking public comment on the purchase. The planned merger between Activision and Microsoft has encountered several obstacles as a result of opposition from a number of IT giants and experts. It will be interesting to watch how Microsoft handles this situation.