Microsoft: no path to Activision Blizzard deal without Call of Duty

Microsoft: no path to Activision Blizzard deal without Call of Duty

Time Stamp: February 22, 2023 6:03 AM

Microsoft will not consider a version of its proposed $68.7bn Activision Blizzard buyout where it cannot also get its hands on Call of Duty, company president Brad Smith has said.

The UK’s Competition and Markets Authority regulator previously suggested Activision sell off Call of Duty first, in order to make Microsoft’s buyout more palatable amidst anti-competition concerns.

Speaking yesterday in Brussels at a press briefing attended by Eurogamer, Smith said Microsoft didn’t “see a viable path” to a deal where Call of Duty was owned by someone else.

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Smith’s statement also ruled out an even unlikelier scenario suggested by the CMA as a potential remedy to the deal passing through UK regulation: that Activision Blizzard splits and Activision itself is sold off, so Microsoft only buys Blizzard and the company’s mobile arm King.

“We just don’t see a viable path to sell the Activision studio[s] or Call of Duty game to someone else,” Smith said. “So if you’re the CMA in the UK, I think you’re probably going to want to make a decision.

“Do you want to kill a deal and cement Sony’s position in its 80 percent share in the EU, or say 70 percent share globally, in a market where it’s been a super dominant company for 20 years?

“Or do you want to let the future go forward with behavioural guardrails and remedies, and bring this title to 150 million more people? I think that’s the fundamental choice that most regulators are going to need to address around the world.”

Smith repeatedly stated that Microsoft had a minority share in the console market compared to Sony, in figures that left out Nintendo – a company it had trumpeted a 10-year deal with just hours before.

“It is a market in which Sony has an 80 percent share, Xbox has 20 percent share,” Smith said, comparing Xbox and PlayStation. “Globally, it’s about 70/30. In Japan, it’s 96 to four. And while there are some fluctuations over time, these numbers have been remarkably steady for two decades.

“Even last year, when Sony suffered constraints in its supply chain and it saw its numbers dip, they came back strong in the fourth quarter as their supply chain recover. By our calculation, on a global basis. Sony outsold Microsoft in the fourth quarter by a margin of 69 to 31, pretty much consistent with the global market shares we’ve seen for 20 years.”

For now, however, Sony is refusing to play ball with Microsoft’s attempts to get its Activision Blizzard buyout agreed to by regulators. And without Sony, yesterday’s twin announcements of deals with Nintendo and Nvidia felt lacking.

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