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Microsoft has taken a significant step toward finalizing its controversial $75 billion acquisition of Activision Blizzard. In an announcement on Sunday, it was revealed that rival company Sony has signed a license agreement for the highly popular game, Call of Duty, to be included in the deal once completed.
This agreement marks a truce between the two gaming behemoths, following a grueling 18-month battle where Sony positioned itself as the primary opponent to the acquisition. Microsoft made significant progress in gaining regulatory clearance on both sides of the Atlantic last week, putting it on the verge of securing victory for a deal that is expected to reshape the gaming industry.
The agreement appears to address Sony’s main concern about the acquisition, which was its belief that Microsoft would make Call of Duty exclusive to its Xbox game console and other services, thereby damaging competition. The weekend agreement came after a failed legal attempt by US regulators to block the deal on Friday.
Phil Spencer, head of Microsoft’s Xbox gaming division, confirmed the binding agreement on Twitter, stating that Call of Duty will remain on PlayStation following the acquisition. Sony later confirmed the new license, but specific details were not disclosed. Microsoft has already secured 10-year licenses for Activision games with other companies, such as Nintendo, demonstrating its commitment to ensuring broad availability of Activision’s games.
Prior to the agreement, Sony had rejected a licensing offer from Microsoft, fueling regulatory efforts in the US and UK to thwart the deal. Microsoft claimed that Sony’s refusal was driven by competitive reasons rather than genuine concerns for the well-being of gamers.
During the court battle with the Federal Trade Commission (FTC), Microsoft presented an email from PlayStation chief Jim Ryan assuring a colleague that Activision games would not become Xbox exclusives. However, Ryan later changed his stance after examining the details of Microsoft’s proposed terms.
The FTC argued that the acquisition would harm competition in the console, subscription, and cloud streaming markets. While Sony does not have a dedicated streaming service, its PlayStation Plus subscription includes a streaming feature, potentially encompassing all the markets of concern to US regulators.
A San Francisco court recently rejected the FTC’s request to block the deal, and subsequent appeals against the ruling were also denied. Additionally, the UK’s Competition and Markets Authority (CMA) has offered to suspend its opposition to the deal, allowing Microsoft an opportunity to address remaining concerns.
To resolve the UK regulator’s concerns, Microsoft and Activision Blizzard will meet with the CMA before the Competition Appeal Tribunal. Microsoft had previously appealed the CMA’s decision to block the acquisition, but both parties have now requested a postponement of the case as negotiations resume. The CAT’s response to this request is still pending.
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