Microsoft Believes 10 Years is Enough for Sony to Develop Alternatives to Call of Duty Franchise Following Activision Blizzard Acquisition.
In response to concerns raised by the UK’s Competition and Markets Authority (CMA) and other regulators, Microsoft has stated that it considers a 10-year period sufficient for Sony to develop a replacement for the Call of Duty franchise. Microsoft’s acquisition of Activision Blizzard for $69 billion has raised concerns that PlayStation’s ability to compete may be adversely affected.
Microsoft has pledged to make every new Call of Duty game available on PlayStation on the same day it comes to Xbox for a decade, with full content and feature parity, if the acquisition is approved. The company told the CMA in a newly published document that it considers 10 years to be sufficient for Sony, as a leading publisher and console platform, to develop alternative offerings to Call of Duty.
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The CMA inquired if the 10-year duration is adequate during the Remedies Hearing, and if there would be a “cliff edge” for Sony at the end of the period. In response, Microsoft stated that the 10-year term will extend into the next console generation and that 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 backward compatibility).
Sony, on the other hand, has argued that it would be impossible for them to replace Call of Duty if the series were no longer available on PlayStation. According to a 2019 study, Call of Duty is an essential game, a blockbuster, an AAA-type game that has no rival. 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. The study also showed that 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.
Read More: Microsoft assures full feature parity for Call of Duty games on PlayStation consoles.
In its newly published response to the CMA, Microsoft stated that the 10-year term is longer than or equal to previous licensing remedies imposed in other mergers. It claimed that there is no basis for extending the remedy beyond the period proposed by Microsoft, but it is prepared to continue discussing the matter with the CMA constructively. The CMA is due to issue its final report on the Activision Blizzard deal by April 26th.
Microsoft’s acquisition of Activision Blizzard has raised concerns that PlayStation’s ability to compete may be significantly impacted. To address these concerns, Microsoft has pledged to offer Call of Duty on PlayStation for a decade, with full content and feature parity, if the acquisition is approved. Sony has argued that it would be impossible for them to replace Call of Duty if the series were no longer available on PlayStation. However, Microsoft believes that Sony has 10 years to develop an alternative offering to Call of Duty. The CMA is due to issue its final report on the deal by April 26th, and Microsoft is prepared to continue discussing the matter with the CMA constructively.
