Microsoft says 10 years is ‘sufficient for Sony to develop Call of Duty alternatives’
Xbox tells UK regulator “there is no basis” for offering Sony a longer licensing agreement
Microsoft has said it believes 10 years is long enough for Sony to develop rival offerings to the Call of Duty franchise.
Regulators including the UK’s Competition and Markets Authority (CMA) have expressed concerns that Microsoft’s $69 billion acquisition of Activision Blizzard could significantly reduce PlayStation’s ability to compete given that it would see Microsoft gain ownership of the Call of Duty series, which Sony has called “irreplaceable”.
In a bid to gain approval for the deal, Microsoft has told regulators it’s willing to make each new Call of Duty game available on PlayStation the same day it comes to Xbox for a 10-year period, with full content and feature parity.
And in a newly published document, the company has told the CMA that it believes a decade is long enough for Sony to create alternatives to Call of Duty.
“At the Remedies Hearing the CMA asked Microsoft if the 10-year duration is sufficient and whether there would be a ‘cliff edge’ for Sony at the end of this period. The 10- year period is [redacted],” Microsoft wrote.
“Microsoft considers that a period of 10 years is sufficient for Sony, as a leading publisher and console platform, to develop alternatives to CoD.
“The 10- year term will extend into the next console generation [redacted]. Moreover, the practical effect of the remedy will go beyond the 10-year period, since games downloaded in the final year of the remedy can continue to be played for the lifetime of that console (and beyond, with backwards compatibility).”
In its dealings with regulators, Sony has argued that it would be impossible for it to replace Call of Duty if the series was no longer available on PlayStation.
In response to questions submitted by Brazil’s Administrative Council for Economic Defense, which subsequently approved the deal, Sony labelled Call of Duty “an essential game: a blockbuster, an AAA-type game that has no rival.”
It wrote: “According to a 2019 study, ‘The importance of Call of Duty to entertainment, in general, is indescribable’. The brand was the only video game IP to break into the top 10 of all entertainment brands among fans, joining powerhouses such as Star Wars, Game of Thrones, Harry Potter and Lord of the Rings.
“Call of Duty is so popular that it influences users’ choice of console, and its community of loyal users is entrenched enough that even if a competitor had the budget to develop a similar product, it would not be able to rival it.”
In Microsoft’s newly published response to the CMA, it noted that the 10-year term is longer than or equal to previous licensing remedies imposed in other mergers.
“While Microsoft is prepared to continue to discuss this constructively with the CMA, there is no basis for extending the remedy beyond the period proposed by Microsoft,” it claimed.
The CMA’s final report ruling on the Activision Blizzard deal is due by April 26.