After 10 months, the deal has yet to go through. As the New York Times writes, as many as 16 countries are checking whether they can allow the merger. She is opposed by Sony, which claims that Microsoft would gain too much market power. It’s interesting that even if the American companies merge, they will still be “only” the third force on the gaming market – behind Tencent and behind … Sony.
Microsoft wanted to push the merger by offering a 10-year deal for Call of Duty
Activison Blizzard owns one of the most profitable gaming brands in history – Call of Duty. According to Sony, Microsoft will try to take over console users after the merger, who will have to move to Xbox to continue playing Activision’s production – .
However, Microsoft has denied that this is their goal.
The first thing I did after the deal was announced was I called Sony’s CEO and said, “Hey, we’re going to keep Call of Duty on your console.”
– said Phil Spencer, head of the Xbox division at Microsoft.
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In the documents Sony submitted in Brazil, the company stated that Call of Duty is such a big brand that it could use it to harm rivals. Call of Duty is the third highest-grossing franchise in history behind Mario and Pokemon. Sony even hired a consulting firm to lobby for this.
According to Microsoft, it misleads regulators by “overestimating the importance of Call of Duty to their profitability”. Phil Spencer also added that “maintaining Call of Duty’s current business model (releasing it on computers and consoles from various companies – ed.) is crucial to the transaction.”
Jim Ryan, executive director at Sony Interactive Entertainment, said in turn that it is not true that they misled regulators. He added that Microsoft “as a tech giant has a long history of industry dominance” and “probably the choice that gamers have today will disappear once the merger goes through.” Ryan thus suggested that players wanting to play Call of Duty will not have the option and will have to buy Xbox.
Microsoft decided to convince Sony to stop blocking the transaction and offered a deal that also protects the interests of the Japanese. So on November 11, they made an offer to keep Call of Duty on PlayStation for another 10 years. Sony declined to comment on the matter.
What next for the acquisition of Activision Blizzard?
16 countries decided to take a look at the merger. So far, only Saudi Arabia and Brazil have agreed to it. Microsoft expects that Serbia will also give its consent soon.
The UK, on the other hand, said it needed to look deeper into the matter. The problem is, among other things, the issue of streaming. In September, the British expressed concern that the combined game libraries of Microsoft and Activision Blizzard would give the company an “unparalleled advantage” over competitors in the streaming market. Microsoft, however, refutes these arguments and claims that nothing will be gained from the merger in this regard, since Activision Blizzard’s streaming does not support their cloud technology, Azure.
Microsoft itself complains that the takeover is much more difficult than four years ago, when – in their opinion – no one would scrutinize the transaction so thoroughly. In the case of LinkedIn’s acquisition in 2016, the consent of not 16, but only six governments was needed. If the merger fails, Microsoft will have to pay Activision Blizzard $3 billion. Both companies, however, have an interest in closing the transaction. Microsoft wants to become an even bigger player in the market, and Activision wants to get rid of the reputational scratch that appeared last year when