Microsoft and Sony signed an agreement to bring the Call of Duty game to the PlayStation console. As a reminder, Microsoft is offering to acquire Activision Blizzard for $69 billion. However, 18 months after the announcement, the acquisition has yet to close as some competition regulators fear the ramifications in the gaming market.
That’s why today’s deal between Sony and Microsoft is a significant milestone in this M&A saga. “We are pleased to announce that Microsoft and @PlayStation have signed a binding agreement to keep Call of Duty on PlayStation following its acquisition of Activision Blizzard. We look forward to a future where players globally have more choices to play their favorite games,” Microsoft Gaming CEO Phil Spencer write in twitter.
“Since Day One of this acquisition, we have been committed to addressing the concerns of regulators, platform and game developers, and consumers. Even after we cross the finish line for approval of this deal, we will remain focused on ensuring that Call of Duty remains available on more platforms and to more consumers than ever before,” said Microsoft Vice Chairman and President Brad Smith. write in twitter.
Regulators are concerned that Microsoft will only release Activision Blizzard titles on Xbox consoles (and possibly PC) after the merger. In February, Microsoft signed a 10 year contract with Nintendo to bring Xbox games to Nintendo consoles, including Call of Duty games.
Shortly after, the company also announced 10-year agreements with cloud gaming services, such as GeForce Now and Boosteroids. While the European Commission approved the merger, the UK Competition and Markets Authority (CMA) blocked the acquisition due to concerns for the cloud gaming market as Microsoft also maintains Windows, the leading desktop operating system, and operates a “significant cloud infrastructure”.
But now, Sony has finally agreed to sign a deal with Microsoft to bring some of Microsoft’s games to Sony consoles. Unlike other agreements with Nintendo and cloud gaming services, Microsoft only mentions Call of Duty titles. Threshold confirmed with Microsoft that it’s a 10 year commitment.
Sony was reluctant to sign a deal with Microsoft because the PlayStation maker hoped authorities would block its Activision Blizzard acquisition altogether.
Last week, a federal judge denied a preliminary injunction request from the Federal Trade Commission (FTC). If Microsoft can find some form of settlement with CMA, the court order will likely pave the way for the acquisition.
That’s probably why Sony changed its stance on the Call of Duty deal. There should be more news from Microsoft, the FTC and CMA in the coming days.