In the gaming world, Sony and Microsoft have agreed to a deal that ensures the Call of Duty franchise remains on PlayStation following the suggested acquisition of Activision Blizzard. Phil Spencer, Microsoft Gaming CEO, states that they have settled on a “binding agreement”. The duration of the deal remains uncertain, raising questions over whether it mirrors Microsoft’s 10-year contracts with Nintendo and other cloud providers.
This agreement brings to a close a year-long fierce dispute waged privately and publicly between the companies. The contention began when Microsoft revealed its intention to acquire Activision Blizzard back in January 2022.
We are pleased to announce that Microsoft and @PlayStation have signed a binding agreement to keep Call of Duty on PlayStation following the acquisition of Activision Blizzard. We look forward to a future where players globally have more choice to play their favorite games.
— Phil Spencer (@XboxP3) July 16, 2023
Activision, renowned for originating the successful Call of Duty series, has a substantial standing within the world of gaming. However, Microsoft’s announcement to acquire Activision caused a global ripple among regulators, fearing this would tip the scales heavily in Microsoft’s favor in the gaming market.
Being the brains behind Xbox, Microsoft stands as a fierce competitor to Sony’s PlayStation. There were apprehensions that Microsoft might monopolize games to its own platforms, thus sidelining Sony from the competitive sphere.
Sony initially resisted Microsoft’s offer of a 10-year Call of Duty contract in December 2022. Instead, Sony repeatedly communicated its concerns to regulators, fearing that Microsoft might reserve Call of Duty for Xbox exclusively, potentially undermining PlayStation versions of the game.
FTC’s court case against Microsoft
In December 2022, Microsoft and Activision Blizzard faced a lawsuit launched by the FTC, seeking to disrupt their planned $69 billion merger due to concerns about its potential to unfairly disadvantage competitive balance in the gaming industry.
Microsoft’s victory in the lawsuit with the FTC comes as a surprise, allowing them to finalize their merger with Activision Blizzard in the US. This result is a considerable setback for Sony, which had invested heavily in providing evidence aiming to derail the deal.
This agreement is the result of 18 months of negotiations and counterproposals between Microsoft and Sony, focusing on the future of Activision content on PlayStation. At the FTC vs Microsoft hearing, an email surfaced from Xbox chief Spencer to PlayStation head Ryan, listing Activision games that would continue on PlayStation, which didn’t sit well with Ryan.
Xbox head Phil Spencer has revealed that Microsoft and PlayStation have “signed a binding agreement to keep Call of Duty on PlayStation following the acquisition of Activision Blizzard.” https://t.co/JEUbLYFwN2 pic.twitter.com/lSKPOtSJIn
— IGN (@IGN) July 16, 2023
Spencer and Ryan’s relationship was evidently strained by the email. Just days after sending the email, Spencer made a public announcement to The Verge, stating that Call of Duty would remain on PlayStation for several years beyond the current Sony contract. In response, Ryan expressed his dissatisfaction with the public disclosure of contract talks and criticized the offer for not adequately considering its impact on their gamers.