Microsoft says it has offered Sony a 10-year contract to make new “Call of Duty” games available on PlayStation at the same time as their release on Xbox if the Redmond company completes its proposed acquisition of Activision Blizzard.
Brad Smith, Microsoft president and vice chair, revealed the offer in a Wall Street Journal op-ed Monday. He said a reported plan by the Federal Trade Commission to block Microsoft’s $68.7 billion Activision deal “would be a huge mistake” that would “hurt competition, consumers and thousands of game developers.”
Sony has previously called Microsoft’s pledges about the blockbuster franchise “inadequate on many levels.”
Sony “is as excited about this deal as Blockbuster was about the rise of Netflix,” Smith wrote in his new piece, seeking to illustrate what Microsoft considers its gaming rival’s ulterior motive for objecting to the deal.
Politico reported Nov. 23 that the FTC was preparing to file an antitrust lawsuit to block the proposed deal, citing three people familiar with the matter. Over the weekend, however, the New York Post reported that FTC commissioners are increasingly divided over the question of whether to block the deal.
Smith, in his WSJ op-ed, used language that no Xbox exec would ever utter on stage: “Microsoft faces huge challenges in the gaming industry. Our Xbox remains in third place in console gaming, stuck behind Sony’s dominant PlayStation and the Nintendo Switch. We have no meaningful presence in the mobile game industry.”
All of this is true, but Microsoft does have a dominant presence in PC operating systems, the platform of choice for many gamers. It’s also one of the industry leaders in general cloud technology and subscription-based gaming.
The UK Competition & Markets Authority, in its initial take on the deal, expressed concern that combining Activision’s content with Xbox Game Pass “could raise barriers to entry, entrench Microsoft’s position as the leading provider of multi-game subscription services, and substantially reduce existing and potential competition.”
Sony agreed with that assessment in its response.
In his WSJ piece, Smith contended that Sony’s concerns about “Call of Duty” exclusivity don’t make sense.
“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,” he wrote. “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.”
The timing of the piece, seeking to build public support for Microsoft’s position, could indicate that the company believes FTC action in the case is imminent, or that the agency has reached a pivotal point in its deliberations.
