It seems a week cannot go by without more absurd things happening in Microsoft’s quest to get its nearly $70 billion acquisition of Activision Blizzard approved by regulators.
Xbox head Phil Spencer has announced that Microsoft has entered a 10-year long deal with Nintendo to keep Call of Duty on its platforms. The agreement comes shortly after the company recently confirmed it offered the same deal to Sony but is dependent on Microsoft closing on its acquisition of Activision Blizzard Inc.
At the same time, they committed to keeping Call of Duty on Steam even as it heads to Xbox and PC Game Pass, a deal they worked out with Valve. Spencer announced the agreement between Xbox and Nintendo via his personal Twitter account, in which he also states Call of Duty will continue to launch on Steam after the acquisition goes through. The move serves dual purposes.
It puts pressure on Sony to accept the same sort of 10 year deal for Call of Duty that they’ve already been offered. But mainly, it’s a performance for regulators to paint PlayStation and Sony as unreasonable in their negotiations as they stand as the only big platform to resist accepting the deal in its current form despite assurances from Microsoft that it doesn’t plan on taking the series as an exclusive. It’s an ongoing saga that will no doubt come to a head imminently but what are the implications of such a monumental deal on the gaming industry?
The controversy lies with whether Sony trusts Microsoft to hold up their end of the bargain by ensuring Call of Duty does not become an exclusive in the aftermath of all this. Valve’s Gabe Newell is confident that Microsoft will play fair saying as much when he spoke to Kotaku.
“Microsoft offered and even sent us a draft agreement for a long-term Call of Duty commitment but it wasn’t necessary for us,” he said. “a) we’re not believers in requiring any partner to have an agreement that locks them to shipping games on Steam into the distant future b) Phil and the games team at Microsoft have always followed through on what they told us they would do so we trust their intentions and c) we think Microsoft has all the motivation they need to be on the platforms and devices where Call of Duty customers want to be.”
Rival Sony has led industry opposition to the takeover, arguing that any limitation on Call of Duty’s availability on PlayStation would harm the console’s sales so it’s understandable why their approach has been anything but welcoming. This could have a seismic impact on the gaming industry, in a similar way to how PayPal Casinos changed the gambling industry. It’s a compelling argument, but Sony’s pushback, at least so far, has been the side that regulators have seemed to take so far.
In September, Jim Ryan, chief executive of Sony’s gaming business, dismissed as a previous offer from Microsoft to keep Call of Duty on PlayStation for three years after the companies’ current agreement ends as inadequate further adding fuel to the fire in the seemingly never ending dispute.
Their arguments so far have done a good job of holding up regulators in giving the greenlight even with the progress made with other parties but should a deal eventually get done then Sony will be wary of some harsher terms for them given all the pushback they’ve given to this point. Regardless, Sony won’t do any deals until this acquisition is either dead or completed.
While all this is going on there are some very nervous onlookers at Activision Blizzard headquarters who will be wondering how this will all eventually play out. There is deep concern within Activision Blizzard about what happens if this deal falls through, which would likely mean a somewhat disastrous financial outcome, plus a wide range of cuts. Activision Blizzard was not exactly in top form before this deal.
The company got into hot water in 2021 with a complaint levied by the EEOC that accused Activision of failing to take corrective and preventive measures on sexual harassment complaints, discriminating against women in pay and promotions, and discriminating against pregnant workers and that was just the tip of the iceberg for their ongoing PR nightmare.
A US judge approved an $18m settlement between Activision Blizzard and the Equal Employment Opportunity Commission, bringing one of several discrimination lawsuits against the gaming company to a close but the damage was done and they have struggled to recover credibility as employers since.
This is just one of the many reasons why they were willing to sell at all, but if the deal is killed, that would be devastating for them at this point, given how much they have riding on it. The higher ups will be less than impressed with the way Sony have conducted themselves in this ongoing negotiation as they continue to transparently torpedo the deal in a self-serving move while Activision find themselves on the brink of a financial meltdown should this agreement fail to get over the line.
It’s a complete mess at the moment but from the gamers’ perspective they will be willing this deal over the line despite how strange a move it seems to move the popular first person shooter onto the Nintendo system. Many now have questions about how a Nintendo Switch would even be capable of physically running a game like Modern Warfare 2 on its current hardware, which is most of the reason Call of Duty hasn’t bothered coming to Nintendo systems for quite some time.
Call of Duty might be one of the most popular series on the planet, but it’s not exactly the kind of game you think of when you picture the Nintendo Switch. The last game to release on a Nintendo platform was Call of Duty Ghosts on the Wii U and it’s actually doubtful that Nintendo will release Call of Duty games on Nintendo Switch too.
It’s essentially more of a deal to signal Microsoft’s good intentions to investigating governing bodies rather than to maintain good relations with rival platforms. Gamers just want a resolution so they can get back to playing one of the most iconic franchises in gaming without fear of it being on the chopping block for consoles but there is still a good chance that after all of this it will go to court to be settled.
Because of the ongoing legal issues could push the deal beyond June 2023 which would drag out an acqusition that has already been extremely messy and long-winded even further. As obvious a move as the Nintendo agreement is to avoid the courts and force Sony’s hand, it is unlikely to bring a quick end to this convoluted and ever-changing situation.
