Microsoft Tells UK It Will Licence Call Of Duty To Sony For A Decade

Microsoft is seeking to ease competition concerns from the British regulator, over its Activision Blizzard acquisition.

Last month the UK’s Competition and Markets Authority (CMA) announced it had provisionally concluded that Microsoft’s $68.7 billion acquisition of Activision Blizzard, announced in January 2022, raises competition concerns.

The CMA was the first competition agency in the world to signal its concerns about the deal in July 2022. It was followed months in November by European competition regulators.

Provisional findings

Then in December 2022 the US Federal Trade Commission (FTC), which enforces antitrust law in America, announced it was also seeking to block the deal.

Microsoft has sought to offset regulatory sanction for the deal by offering Sony and Nintendo a 10-year contract for the same ‘Call Of Duty’ release dates on their respective platforms, as on its Xbox platform, the CMA has concluded the Activision Blizzard acquisition could harm UK gamers.

Indeed, the CMA has provisionally concluded that Microsoft’s proposed acquisition of Activision could result in higher prices, fewer choices, or less innovation for UK gamers.

The CMA said its investigation currently indicates that Microsoft would find it commercially beneficial to make Activision’s games exclusive to its own cloud gaming service (or only available on other services under materially worse conditions).

The CMA provisionally found that buying one of the world’s most important game publishers would reinforce this strong position and substantially reduce the competition that Microsoft would otherwise face in the cloud gaming market in the UK.

Microsoft promise

Now the CMA in a document has revealed that Redmond had told it that “Microsoft strongly disagrees with the CMA’s provisional conclusion that the Merger may result in a substantial lessening of competition in console gaming (“Console SLC”) and cloud gaming services (“Cloud Gaming SLC”) in the UK.”

“Microsoft has no intention of engaging in input foreclosure or of making Call of Duty (“CoD”) exclusive to the Xbox platform,” it added.

“Microsoft is proposing a package of licensing remedies which (i) guarantee parity between the PlayStation and Xbox platforms in respect of CoD and (ii) ensure wide availability of CoD and other Activision titles on cloud gaming services,” Microsoft said in the document published on Wednesday.

Microsoft said it would license Activision Blizzard’s “Call of Duty” (CoD) to Sony for 10 years to address UK concerns.

Microsoft last month struck a similar deal with Nvidia Corp’s gaming platform, dependent on it getting the go-ahead for the much-contested acquisition.

Sony rejection

Sony however in its response to the CMA’s findings, said it “agrees with the CMA’s assessment. SIE also concurs with the CMA’s view, as set out in the Remedies Notice, that the harm the Transaction would cause could only be addressed through prohibition or structural remedies.”

Sony rejected Microsoft’s proposals, saying the only way to preserve competition in consoles and cloud gaming was to block the deal or subject it to a structural remedy, such as making Microsoft sell CoD.

“SIE agrees with the Remedies Notice that divesting parts of Activision’s business could also
address the CMA’s competition concerns,” Sony stated.

Microsoft meanwhile is expected to secure EU antitrust approval with its offer of licensing deals to rivals, three people familiar with the matter told Reuters earlier this month, helping it to clear a major hurdle.

The CMA however will rule on the deal on 22 April.