The Monopoly War Over 'Call of Duty:' Microsoft May Be Facing Antitrust Complaint Amid Activision-Blizzard Partnership News

The Monopoly War Over 'Call of Duty:' Microsoft May Be Facing Antitrust Complaint Amid Activision-Blizzard Partnership News

By Migue Medina

After several months of analysis and investigations, it seems that the Federal Trade Commission (FTC) is considering filing an antitrust complaint against Microsoft MSFT's acquisition of Activision-Blizzard ATVI.

Politico reported that the intervention of the FTC is due in December. The agency is “skeptical” about Microsoft's statements as it relates to giving the go-ahead to the business agreement. For now, the FTC did not issue any statements on the matter.

In The Eyes Of Regulators

Earlier this year, Microsoft announced it was moving towards initiating one of the largest acquisitions in the history of video games. The company would take over Activision-Blizzard, a company that, over decades, brought titles such as “Warcraft,” “Diablo,” “Overwatch,” “Tony Hawk,” “Guitar Hero,” “Candy Crush,” “Call of Duty,” “Crash Bandicoot,” and “Spyro,” among others.

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The figure for this acquisition? No less than $68.7 billion.

However, these acquisitions are not materialized overnight. These are the kind of deals that make regulators around the globe take the time to analyze the impact on the world’s market.

Some of them are the Federal Trade Commission (North America), European Commission, Competition Markets Authority (UK) and the Administrative Council for Economic Defense (Brazil).

The regulatory agencies of Brazil and Saudi Arabia have agreed to the acquisition, while the rest of the agencies are still investigating the impact of the multibillion-dollar purchase, with deadlines for 2023.

An Acquisition Like No Other

If Microsoft were to acquire Activision-Blizzard, the company’s power and influence could affect not only its close competitors, such as Sony SONY and Nintendo NTDOY but also smaller publishers and independent studios.

According to GamesIndustry, the distribution of the “Fallout,” “Doom,” “Halo” or “Call of Duty” franchises exclusively in services like Xbox Game Pass would favor Microsoft and reduce competition possibilities for companies such as Sony, which had previously stated lacking the economic resources to venture into similar business models.

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Not to mention the cloud gaming technology presented by xCloud Gaming. This tech shows a stark contrast both in optimization (it allows you to play with the graphics power of an Xbox Series X) and versatility (it can be used on smartphones, Smart TVs, PCs and consoles), with other services such as Google Stadia (which has already announced its closure) and GeForce Now (only functional with the Steam catalog on PC).

Microsoft already enjoys a remarkable present influence, especially with the Xbox Game Pass offer, the advance of xCloud Gaming and the success of games like "Minecraft" or "Fallout." Thus, the absorption of a giant like Activision-Blizzard would only monopolize the industry.

But, in the midst of this chaotic business deal, the name in everyone's sights is just one: “Call of Duty.”

'Call Of Duty:' The Gem That Tilts The Scales

Activision-Blizzard has an outstanding catalog of video games to its name. From “Warcraft” to “Overwatch” to “Crash Bandicoot,” these are titles that marked great moments in the industry and won the praise of the specialized press and the gaming community.

However, there is only one franchise that really troubles both regulators and Microsoft's competition: “Call of Duty.”

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According to Forbes, year after year, the first-person warfare saga occupies the best-selling video game charts during its launch month. It doesn't matter whether the game had technical problems or the company was immersed in controversial complaints: “Call of Duty” sells every time.

However, “Call of Duty” sales have a special component: its success is weirdly linked to PlayStation. A large part of the community of players of the war saga plays on Sony consoles and, consequently, the Japanese company is worried about its future, in case Microsoft secures the acquisition.

What if Microsoft were to take over “Call of Duty”?

There is a chance that the saga could become exclusive to Xbox consoles and the Xbox Game Pass and xCloud Gaming services. However, even with the promise of keeping "Call of Duty" as a multiplatform title, Microsoft could take advantage of its subscription services (integrated into TVs, smartphones and PCs) to leverage the franchise and beat Sony.

In response, Sony claimed that losing “Call of Duty” would severely diminish SIE's ability and incentive to invest in future hardware innovation and gaming technologies, informed GamesIndustry.

This is one of the key points for regulators to analyze should they give the go-ahead to Microsoft’s Activision-Blizzard acquisition. For example, the European Commission has been cautious in this regard and is concerned that, should the acquisition be completed, Microsoft “may foreclose access to Activision Blizzard’s console and PC video games, including high-profile ones like 'Call of Duty.'”

In turn, Microsoft stated that the suggestion that the incumbent market leader, Sony, with clear and enduring market power, could be foreclosed by the smallest of the three console competitors, Xbox, as a result of losing access to one title, is not credible.

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Statements from Microsoft's main competitors, major publishers, independent studios and market analysts are helpful for each of the regulators to analyze and make a decision on the acquisition.

In order to ease the situation, Microsoft said, "we are prepared to address the concerns of regulators, including the FTC, and Sony to ensure the deal closes with confidence."

Over the last few years, the American company took hold of Minecraft and kept it on platforms (available on PlayStation, Nintendo, Xbox, PC consoles and smartphones). Yet, when Microsoft acquired “Bethesda,” the company decided on a different path: some of its upcoming titles, such as “Starfield,” “The Elder Scrolls VI” and “Indiana Jones,” will be exclusive to Xbox platforms. This undoubtedly complicates even more the regulators’ decision.

When will we know how this story will end? Probably by mid-2023, when all the regulatory bodies will have approved (or not) the multi-billion dollar deal. However, in the event that one of the regulators blocks the acquisition or proposes a change in the terms, the deal could take much longer than expected.

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