In January, Microsoft announced its intention to buy Call of Duty publisher Activision Blizzard for $68.7 billion. While the Federal Trade Commission scrutinized 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 several gambling companies such as Ubisoft, Riot Games , Warner Bros. Interactive Entertainment and Sony for comments on the potential merger. Of the 11 companies approached by CADE, Sony was the only objecter.
The core of Sony’s concern was that Microsoft might own Call of Duty, which Sony claimed would place Microsoft at the critical mass of a gaming monopoly. Microsoft had already acquired some of gaming’s most respected franchises, such as Fallout, The Elder Scrolls, and Doom, after purchasing ZeniMax Media in 2020. These high-profile acquisitions were integral to Microsoft’s plan to leverage the power of Xbox Game Pass. Reinforce, a subscription service where users get access to a varying catalog of downloadable games for a monthly fee.
“One of the reasons Microsoft’s Game Pass has grown so quickly is because Microsoft has acquired several third-party studios since 2017,” Sony wrote in its response to CADE, translated by The Washington Post. Sony noted that those studios include Double Fine, Obsidian Entertainment, Ninja Theory and Bethesda, adding content from each to Game Pass. “Such acquisitions have provided Microsoft with a greater amount of content, even without Activision’s games. Adding Activision’s games to that content would be a turning point.”
Sony described Call of Duty as an exceptional feature in the gaming world, one on 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 collaborative effort of multiple studios that have worked together for years. In a 2021 investor report, Activision stated that more than 3,000 employees have been assigned to the franchise. With production values so high, Sony claimed no other publisher could 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 in threatening the world’s most lucrative first-person shooter. Call of Duty has sold 425 million copies in its lifetime. In comparison, Battlefield sold approximately 88 million copies in 2018. EA has not yet disclosed 2021 sales figures for its latest Battlefield game, “Battlefield 2042”. Sales of the “Battlefield 2042” 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,” Sony wrote. “Even if they could, Call of Duty is overly entrenched so that no rival – no matter how relevant – can catch up.”
In addition, Call of Duty is a hugely popular series among PlayStation owners, a commitment Activision Blizzard has promoted and rewarded. PlayStation players have long enjoyed exclusive Call of Duty perks not available to gamers on other platforms, such as early access to in-game gear, experience bonuses, Battle Pass tier skips, player skins and more. The Call of Duty League, Activision’s main esports league for the series, played exclusively on the PlayStation in its first season. Fans on PlayStation who pre-order ‘Call of Duty: Modern Warfare II’, the highly anticipated sequel to 2019’s ‘Call of Duty: Modern Warfare’, will also get access to the game’s open beta for the first time on September 16 – a full week ahead of Xbox and PC gamers, who will have to wait until September 22.
Microsoft has assured the public that Call of Duty will remain multiplatform if the merger goes through. However, someone who pays $10 a month for Xbox Game Pass can have access to every Call of Duty ever made and the latest releases at launch, along with access to hundreds of other games. Microsoft previously used a similar tactic with its own popular first-person shooter franchise, Halo. In comparison, a PlayStation player would have to purchase each Call of Duty title individually. The upcoming title, “Call of Duty: Modern Warfare II,” alone will cost $70 before players consider purchasing other games or purchasing Sony’s own game subscription service, PlayStation Plus.
But is that enticing enough for PlayStation owners to switch to Xbox? Sony believes so, describing Call of Duty players as die-hard fans who would easily switch to Xbox if it offered expanded access to their beloved series. As Christopher Dring points out at GamesIndustry.biz, Microsoft, which owns the most popular video game series on PlayStation, puts Sony in a very tough spot, giving the leading competitor a direct line to its fans on its own system with every new Call of Duty release. game .
However, Sony 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 created by previously independent studios now owned by Sony.
Microsoft pointed this out to CADE in its rebuttal to Sony’s comments, saying Sony had strengthened 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, seen by the industry as ‘a rival to Xbox Game Pass,’ reflects the intense rivalry in the game distribution industry,” Microsoft wrote. “The offering of Ubisoft’s catalog of ‘popular’ and ‘best-selling’ games on PlayStation Plus reinforces this rivalry and also highlights the diversity of high-quality third-party games available to subscription service providers.”
In a recent CADE filing, Microsoft claimed that Sony paid for “blocking rights” to prevent developers from adding content to Xbox Game Pass, as reported by The Verge. Microsoft also said it was investing heavily in Xbox Game Pass as a counter-attack to Sony’s superior buy-to-play strategy in the previous console generation, according to a translator on the gaming forum ResetEra.
Outside 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, enjoyed a resurgence in popularity thanks to quick updates, new gameplay modes, frequent competitions, detailed world building, and a steady stream of general content. Respawn is also led by Vince Zampella, one of the co-founders of Infinity Ward and oversaw the production of “Call of Duty”, “Call of Duty 2”, the original “Call of Duty: Modern Warfare” in 2007 and 2009 “Modern Warfare 2” (not the upcoming reboot).
Nevertheless, Sony insists Call of Duty is simply too big to fight against, referring to the franchise as “a category of games in its own right”. And the company is fighting to prove it.
Gabriela Sa Pessoa in São Paulo contributed to this report.
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