Microsoft is already a dominant force in the computing industry and is one of the biggest tech companies in the world, but it is desperate to get ahead in the entertainment space of gaming. The Xbox and its subscription-over-exclusives model continue to struggle, with the Xbox One essentially being a flop by comparison to the PlayStation 4, and the PlayStation 5 outselling the Xbox Series X three-to-two, according to some reports.
So, Microsoft went on a massive, multi-billion acquisition spree. ZeniMax Media, the parent company of Bethesda, was the first major deal, costing $7.5 billion. Late last year, though, Microsoft had a cash deal for $69 billion accepted to acquire massive multi-platform publisher Activision Blizzard. This latest mega deal isn’t done yet, though, with the UK, US, and EU currently in its way.
Why is the Microsoft-Activision deal being blocked?
The entities blocking the Microsoft-Activision deal predominantly concern anti-trust and competition laws, and in the case of this deal, the issues have mostly arisen from the potential of Call of Duty being removed from PlayStation. It’s an absurdly popular series, even to the extent that ExpressVPN’s gamer research found it to be the most popular game among men and women.
Its popularity from this UK and US-facing research was by quite some margin, too. It was put as the favourite enough to give the Call of Duty series a 15 per cent lead over FIFA among men and a seven per cent lead over The Sims among female gamers. Add in the fact that the most recent release, Modern Warfare 2, hit $800 million in sales in its first three days, per the VideoGamesChronicle report, and you can see why it’s such an important IP.
The thinking is that – in the home console space where the focus is Xbox vs PlayStation – making Call of Duty an exclusive to one over the other would tip the scales far too much. This acquisition would, in theory, draw too many players away from Sony to Microsoft, giving the American company too much power over pricing and quality.
More than the Call of Duty problem
So far, nations like Brazil, Chile, Serbia, Saudi Arabia, and even the home of Sony, Japan, have reportedly given the all-clear to the Microsoft-Activision deal. However, the major markets of the US, UK, and EU have put Microsoft to task and are yet to give the nod to the $69 billion deal going ahead.
It makes sense that the Japanese authority would, reportedly, give the green light as Nintendo is the dominant force and PlayStation outsells Microsoft nearly 24-to-one in Asia. Still, the Federal Trade Commission looks to be putting forward an anti-trust lawsuit while the UK’s Competition and Markets Authority continues to drill the deal and has recently proposed that Call of Duty be removed from the deal entirely to get it done.
However, surveys performed and collected by Axios indicate that Call of Duty changing hands doesn’t look to be as impactful as first assumed. At worst, surveys say that 15 per cent of avid Call of Duty players would switch from PlayStation to Xbox. Others report that only three per cent would make the full switch. Now, the EU looks likely to give the green light to the deal but will be waiting until 25 April to do so.
Microsoft has laid out an offer to keep Call of Duty coming to the Sony console for ten years and even port it to the Nintendo Switch in another ten-year deal. This gives Sony a decade to try to come up with a competitor, which it certainly could do through its own acquisition of the once heavily Microsoft studio Bungie – makers of Halo.
There is more to the acquisition, however, as Activision Blizzard owns gaming goliath King, which would give Microsoft an almighty hand in the mobile sector. The Blizzard arm of the company is also behind smash-hit series like Diablo, StarCraft, Overwatch, and World of Warcraft, furthering its PC gaming reach.
Call of Duty is the game series making the headlines for Microsoft triggering anti-trust legislation, but the first-person shooter doesn’t even look to be only monopolising play in this acquisition.
Stay updated with all the insights.
Navigate news, 1 email day.
Subscribe to Qrius