Microsoft Edges Closer to $75 Billion Activision Blizzard Deal as Sony Signs License for ‘Call of Duty’
Microsoft has taken a significant step towards finalizing its much-debated $75 billion acquisition of Activision Blizzard. In a surprise move, Sony has signed a license agreement for the highly popular gaming title “Call of Duty” following the completion of the deal. This agreement between the two rival gaming giants comes after an intense 18-month battle that made Sony the primary opponent to the acquisition. Recent regulatory breakthroughs in both the US and the UK have placed Microsoft on the brink of securing victory, as the deal is expected to reshape the gaming industry.
The newly forged pact addresses one of Sony’s major concerns about the acquisition. The Japanese company had been worried that Microsoft would have the power to make “Call of Duty” exclusive to its Xbox game console and other services, hampering competition in the gaming market. However, the agreement reached over the weekend seems to have resolved this issue, leading to a truce between the two companies. Furthermore, the failure of a last-minute legal attempt by US regulators to block the deal on Friday strengthened Microsoft’s position.
Phil Spencer, the head of Microsoft’s Xbox gaming division, took to Twitter to confirm the signing of a binding agreement with Sony, which guarantees that “Call of Duty” will remain available on PlayStation consoles even after the acquisition. While both companies have refrained from providing further details about the agreement, Microsoft has already secured 10-year licenses for Activision games with other companies, including Nintendo, demonstrating its commitment to broad availability.
Earlier in the process, Sony had declined Microsoft’s offer to license Activision’s games, fueling regulatory attempts in the US and the UK to impede the deal. Microsoft argued that Sony’s refusal was motivated by competitive reasons rather than genuine concerns about the impact on gamers. However, in court hearings, Microsoft presented an email from PlayStation chief Jim Ryan, in which he downplayed the likelihood of Activision games becoming Xbox exclusives. Nevertheless, Ryan later admitted that his view changed once he saw the specific terms proposed by Microsoft.
The acquisition faced opposition from the US Federal Trade Commission (FTC) due to concerns about the potential negative impact on competition in the console, subscription, and cloud streaming markets. The FTC’s request for an injunction to prevent the deal from closing was recently rejected by a San Francisco court. In response to the ruling, the UK’s Competition and Markets Authority (CMA) offered to put its opposition on hold, allowing Microsoft an opportunity to address the remaining concerns. Microsoft and Activision Blizzard are scheduled to meet with the CMA in a case management conference on Monday.
As negotiations continue with the CMA, both parties have asked the Competition Appeal Tribunal (CAT) to postpone their respective cases. The CAT’s response to this request is still pending. The continued discussions aim to find ways to resolve the CMA’s concerns and obtain approval for the acquisition.
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The potential acquisition of Activision Blizzard by Microsoft has sparked significant interest and debate within the gaming industry. If the deal is finalized, Microsoft would gain control over some of the most popular gaming franchises, including “Call of Duty,” “World of Warcraft,” and “Candy Crush.” This move could have far-reaching implications for the gaming market, as Microsoft aims to solidify its presence in the industry and expand its gaming portfolio.
Experts have highlighted the potential impact of the acquisition on competition, access to games, and platform exclusivity. While Microsoft has assured regulators of its commitment to maintaining broad availability of Activision games, concerns remain about the long-term consequences of consolidation within the industry. Additionally, rival gaming companies are closely monitoring the outcome of the deal, as it may influence their own strategies and alliances.
Overall, the agreement between Microsoft, Sony, and Activision Blizzard over the licensing of “Call of Duty” represents a significant breakthrough in this contentious acquisition. The resolution of one of Sony’s main concerns paves the way for Microsoft to secure the deal and reshape the gaming industry. As negotiations with regulators continue, the gaming world eagerly awaits the final verdict on this consequential transaction.
