In January, Microsoft announced its intention to buy Call of Duty publisher Activision Blizzard for $68.7 billion. While the Federal Trade Commission has been scrutinizing the deal in the United States, Brazil also placed Microsoft under review by the Administrative Council for Economic Defense (or CADE), the country’s national antitrust regulator, and asked various gaming companies such as Ubisoft, Riot Games, Warner Bros. Interactive Entertainment and Sony for comments on the potential merger. Out of the 11 companies CADE reached out to, Sony was the sole objector.
At the heart of Sony’s concern was Microsoft potentially owning Call of Duty, which Sony claimed would position Microsoft at the critical mass of a gaming monopoly. Microsoft had already gained some of gaming’s most revered franchises such as Fallout, The Elder Scrolls and Doom after purchasing ZeniMax Media in 2020. These high profile acquisitions have been integral to Microsoft’s plan to solidify the power of Xbox Game Pass, a subscription service where users gain access to a rotating catalogue of downloadable games for a monthly fee.
“One of the reasons Microsoft’s Game Pass has grown so quickly is because, since 2017, Microsoft has acquired several third-party studios,” wrote Sony in its response to CADE, as translated by The Washington Post. Sony noted those studios included Double Fine, Obsidian Entertainment, Ninja Theory and Bethesda, adding content from each to Game Pass. “Such acquisitions have given Microsoft a greater mass of content — even without Activision’s games. Adding Activision’s games to that content would represent a turning point.”
Sony described Call of Duty as an exceptional property in the gaming world, one to which Activision devotes a staggering amount of resources with impressive returns. To date, the series has generated $30 billion in revenue for Activision Blizzard.
Each annual Call of Duty title is the collective effort of multiple studios working together for years. In a 2021 investor report, Activision stated there are over 3,000 workers assigned to the franchise. With production values that high, Sony maintained that no other publisher could possibly challenge Activision’s position in the market, citing Electronic Arts’ Battlefield (another blockbuster military action series) as a competitor that has still fallen woefully short of threatening the world’s most lucrative first-person shooter. Call of Duty has sold 425 million copies in its lifetime. Comparatively, Battlefield has sold roughly 88 million copies as of 2018. EA has not yet revealed the sales numbers for its latest Battlefield game, 2021′s “Battlefield 2042.” “Battlefield 2042′s” sales were described as “disappointing” by then-EA Chief Financial Officer Blake Jorgensen during the publisher’s February investor call.
“No other developer can devote the same level of resources and expertise to game development,” wrote Sony. “Even if they could, Call of Duty is overly entrenched so that no rival — no matter how relevant — can catch up.”
Moreover, Call of Duty is a wildly popular series among PlayStation owners, a devotion which Activision Blizzard has promoted and rewarded. PlayStation players have long enjoyed exclusive Call of Duty perks unavailable to gamers on other platforms such as earlier access to in-game gear, experience bonuses, Battle Pass tier skips, player skins and more. The Call of Duty League, Activision’s premier esports league for the series, competed exclusively on the PlayStation in its inaugural season. Fans on PlayStation who preorder “Call of Duty: Modern Warfare II,” the highly anticipated sequel to 2019′s “Call of Duty: Modern Warfare,” also get first dibs to the game’s open beta on Sept. 16 — a full week ahead of Xbox and PC gamers, who must wait until Sept. 22.
Microsoft has assured audiences that Call of Duty will remain multiplatform if the merger goes through. However, someone paying $10 a month for Xbox Game Pass could have access to every Call of Duty ever made and the latest releases upon launch, along with access to hundreds of other games. Microsoft previously utilized a similar tactic with its own popular first-person shooter franchise, Halo. Comparatively, a PlayStation player would have to buy each Call of Duty title separately. The upcoming title, “Call of Duty: Modern Warfare II,” alone is priced at $70 before players consider purchasing any other games or purchasing Sony’s own game subscription service, PlayStation Plus.
But is that enticing enough for PlayStation owners to jump ship for Xbox? Sony believes it is, describing Call of Duty players as die-hard fans who would readily swap to Xbox if it offered more comprehensive access to their beloved series. As Christopher Dring at GamesIndustry.biz points out, Microsoft owning the most popular video game series on PlayStation puts Sony in a very awkward spot, giving its leading competitor a direct line to its fan base on its own system with each new Call of Duty game.
Sony, however, has been building its own powerful stable of exclusive titles for years, also by purchasing talented studios. Bungie, the studio that created the Microsoft-exclusive Halo series, was the latest developer to be bought by Sony. The Last of Us series as well as Uncharted, Marvel’s Spider-Man, Horizon and “Ghost of Tsushima” are all critically acclaimed Sony exclusives made by previously independent studios now owned by Sony.
Microsoft pointed this out to CADE in its rebuttal to Sony’s comments, saying Sony had fortified its own subscription service by partnering with Ubisoft, maker of the Assassin’s Creed and Tom Clancy Rainbow Six franchises, among others.
“The launch of the new PlayStation Plus, perceived by the industry as ‘a rival to Xbox Game Pass,’ reflects the intense rivalry in the game distribution industry,” wrote Microsoft. “The offering of Ubisoft’s catalogue of ‘popular’ and ‘best-selling’ games on PlayStation Plus reinforces such rivalry and also emphasizes the diversity of high-quality third-party games available to subscription service providers.”
In a recent CADE filing, Microsoft claimed that Sony has paid for “blocking rights” to stonewall developers from adding content to Xbox Game Pass, as reported by the Verge. Microsoft also said that it invested heavily in Xbox Game Pass as a counterattack to Sony’s superior buy-to-play strategy in the previous console generation, according to a translator in the gaming forum ResetEra.
Third-party companies Ubisoft, Riot Games, Bandai Namco and Google all agreed that Call of Duty does indeed have competitors such as “Apex Legends,” “Counter-Strike: Global Offensive” and “Valorant.” Sony disagreed, arguing that no major developer has ever managed to create a franchise that could topple Call of Duty.
Recently, Respawn Entertainment’s “Apex Legends,” published by Electronic Arts, has been enjoying a resurgence in popularity thanks to swift updates, new gameplay modes, frequent competitions, detailed worldbuilding and a steady stream of overall content. Respawn is also led by Vince Zampella, one of the co-founders of Infinity Ward and oversaw the production “Call of Duty,” “Call of Duty 2,″ the original “Call of Duty: Modern Warfare″ in 2007 and 2009′s “Modern Warfare 2” (not the upcoming reboot).
Nonetheless, Sony insists that Call of Duty is just too big to contend against, referring to the franchise as “a category of games in itself.” And the company is fighting to prove it.
Gabriela Sa Pessoa in São Paulo contributed to this report.
