Microsoft says Activision Blizzard merger not viable without Call of Duty

[Shawn Knight]

The big picture: Microsoft has made it clear that it isn't interested in acquiring Activision Blizzard unless the Call of Duty franchise is part of the deal. Earlier this month, UK regulators expressed concerns about Microsoft's proposed acquisition of Activision Blizzard. One potential avenue to ease anxiety would be for Activision Blizzard to sell off the highly successful Call of Duty franchise, but Microsoft isn't keen on the detour.

Following a closed door meeting with European Union regulators on Tuesday, Microsoft President Brad Smith was asked if losing the Call of Duty franchise would compromise the deal. Smith said they "don't think it's feasible or realistic to think one game or one slice can be carved out from the rest."

Pressed on the matter, Smith said he believes the Competition and Markets Authority (CMA) will need to make a decision.

"Do you want to kill a deal and cement Sony's position in its 80 percent share in the EU, or say 70 percent share globally, in a market where it's been a super dominant company for 20 years?

"Or do you want to let the future go forward with behavioral guardrails and remedies, and bring this title to 150 million more people? I think that's the fundamental choice that most regulators are going to need to address around the world."

Smith's figures are in reference to Microsoft's insistence that Sony's PlayStation console has a much larger market share than its own Xbox.

Opponents of the Microsoft / Activision Blizzard merger, including Sony, worry that Microsoft could make titles like Call of Duty exclusive to the Xbox and effectively thwart competition. A survey conducted by the CMA found that 24 percent of PlayStation CoD players would switch consoles if the franchise became an Xbox exclusive.

Microsoft is not sitting by idly. Already this week, Microsoft struck a 10-year agreement with Nintendo to bring Xbox games to Nintendo platforms. A separate deal with Nvidia, meanwhile, would allow GeForce Now players to stream Xbox PC games.

Back in December, the FTC filed a complaint to block Microsoft's $69 billion acquisition.

In a related report, sources told GamesIndustry.biz that Sony continues to push back against Microsoft's proposed acquisition. The two sides apparently are not close to coming to a mutual agreement on the merger, people familiar with the matter said.

Image credit: lalesh aldarwish

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https://www.techspot.com/news/97698-microsoft-activision-blizzard-merger-not-viable-without-call.html

 

[Edster]

Again, this speaks volume of the lack of courage in the gaming world these days. Microsoft just wants to devour a big developer so they can earn directly from this cash cow that is CoD, because screw trying to make a better selling franchise. Sony just wants to block it because it has no confidence it can make a FPS compete directly with it and the best way for them to grow is to stop MS growing. Is just pathetic all round.

The dishonesty on Smith's end is a little jarring. Now that it is convenient, Xbox vs PS market share is important. Whereas is clear as day that this generation of consoles, MS is more concerned about overall market share of game sales rather than console sales; with the lack of Xbox only exclusives. You can't go crying about something after not actually caring about it.

 

[Kashim]

"Do you want to kill a deal and cement Sony's position in its 80 percent share in the EU, or say 70 percent share globally, in a market where it's been a super dominant company for 20 years?"

This. I'm no fan of Microsoft, but I have grown tired of Sony's shenanigans. They try to lock out the competition every chance they get. Be it signing exclusivity deals or refusing to allow interoperability with other consoles they seem to think all this behavior is fine, but if someone else does it then it's a crime against humanity.

 

[NintPlayBox]

Sony's deal with Activision expires next year, and judging by the fact that Activision's CEO Kotick has been trashing Sony for interfering in his merger with Microsoft, I would say Sony better not be counting on the renewed of their deal as I can perfectly see now Kotick uniting forces with Microsoft from that point forward regardless.

 

[psycros]

"Do you want to kill a deal and cement Sony's position in its 80 percent share in the EU, or say 70 percent share globally, in a market where it's been a super dominant company for 20 years?"

This. I'm no fan of Microsoft, but I have grown tired of Sony's shenanigans. They try to lock out the competition every chance they get. Be it signing exclusivity deals or refusing to allow interoperability with other consoles they seem to think all this behavior is fine, but if someone else does it then it's a crime against humanity.

You could say the same of Microsoft, Nintendo, Apple or literally any other company that wants to snatch up content and lock it inside their walled garden. Which is all of them. Its only been the power of big publishers like Activision that have prevented any one hardware maker from demanding an even bigger cut of game sales. Most developers hate the idea of platform exclusives, too. Now we have a console maker buying a major publisher. Nothing good can come of this for Sony and Nintendo fans, or even PC gamers for that matter.

 

[dangh]

"Do you want to kill a deal and cement Sony's position in its 80 percent share in the EU, or say 70 percent share globally, in a market where it's been a super dominant company for 20 years?"

This. I'm no fan of Microsoft, but I have grown tired of Sony's shenanigans. They try to lock out the competition every chance they get. Be it signing exclusivity deals or refusing to allow interoperability with other consoles they seem to think all this behavior is fine, but if someone else does it then it's a crime against humanity.

That makes no sense. Ms have more than twice Sony's internal studios. And many times more resources to throw at them. If ms can't produce games as good as Sony's do with so many more people and cash there is no point to give them just more IP. If they need to buy bethesda and activision and many smaller studios just to be relevant then maybe they should stop?

If ms simply can't create good games then just consuming established IPs won't do any good.

And sorry, but this is a lie about 80pct gaming market in EU being Sony. It is steam and pc gaming, which already relies greatly on ms Windows who have largest market share in eu. Eu is not shooter focused as us is, so it is not surprising that xbox is less popular anyway. But it is only ms doing. Xbox 360 with wider choice of interesting titles was actually very popular. But for reason unknown with Xbox one release ms simply stopped nearly any new ip development. Look at all great xb 360 titles and innovation there. And look at last 10 years at what they did. If you see the difference then you will understand why customers they won with x360 simply had to go away.

 

[Watzupken]

I feel all these talks about "fairness" and "openness" is just a facade. It is true that COD is a big deal due to the revenue it generates. But for anyone or regulator to say that it will hurt competition, when others are happily acquiring other game studios to create exclusive game titles pretty much contradicts this. It is also a case where EPIC says they want to play fair, but mainly the one creating exclusive agreements with game developers to lock in a title on their platform. Essentially their actions don't tie in with their politically correct words.

 

[loki1944]

People's Glorious Socialist Platform of Windows.

 

[rsmith222]

Again, this speaks volume of the lack of courage in the gaming world these days. Microsoft just wants to devour a big developer so they can earn directly from this cash cow that is CoD, because screw trying to make a better selling franchise. Sony just wants to block it because it has no confidence it can make a FPS compete directly with it and the best way for them to grow is to stop MS growing. Is just pathetic all round.

If only Disney could make a better mouse...

Franchise cash cows are a big deal. Look at Mario. Am I very tired of Mario? Absolutely. Will that stop Nintendo from milking it?

The original hand-drawn illustration of the Simpson's family was far and away superior to the lifeless soulless computer animation the concept became. And yet, how many seasons of that have we seen?