Microsoft has triumphed over Sony, while Europe seems increasingly favorable for the Xbox maker’s takeover of Activision-Blizzard.
A week has passed, and Microsoft’s battle with the world to buy Activision continues to shake the entire industry. Ahead of this new episode, the Bill Gates-founded company had to defend itself against the European Commission (and antitrust laws), which suspected that its merger with Activision could lead to a situation of unfair competition in the video game world. This is also what the US FTC (Federal Trade Commission) and the British CMA (Competition and Markets Authority) are still afraid of, before which Microsoft will also have to defend its rights.
However, at the center of all her battles, Sony remains her real opponent. The Xbox maker’s archrival is fighting hard to sabotage its plans and prevent the theft of the Call of Duty license, which is priceless for the PlayStation. Sony has accused Microsoft, along with various antitrust organizations, of wanting to appropriate the franchise to crush competitors. A furious argument that could have crushed the Redmond firm if it had nothing to deny. But just… the counterattack began.
Xbox launches counteroffensive
On the same day of the defense against the European Commission, Microsoft announced its agreement with Nintendo, offering (among other things) the Japanese firm ten years access to a Call of Duty license. A statement that was not made by accident, as it was intended to prove that Microsoft does not want to monopolize the franchise. And it didn’t stop here! Later in Brussels, Brad Smith (VP of Microsoft) and Phil Spencer (President of Xbox Game Studios) added a host of other elements to cement their position, including another deal, this time with NVIDIA.
At first glance, this seems less exclusive than the alliance with Nintendo. However, this is a huge asset for Microsoft. And here’s why: Another problem for the European Commission and the CMA has been that Xbox is monopolizing the nascent PC cloud gaming market, fueled by Activision-Blizzard exclusives, including Call of Duty. The concern faded after Microsoft offered to share its licenses with GeForce NOW, NVIDIA’s cloud gaming service. GeForce NOW subscribers have rightfully claimed the famous FPS, and once again Microsoft is giving itself the best role no matter what.
Call of Duty coming soon in Xbox colors?
Gradually, Sony and PlayStation become the black sheep in this story. While the Japanese firm wanted to destabilize its competitor and present it as a threat to the industry, the situation seems to be taking the opposite turn. Microsoft gets agreements (more than a decade each time) to redistribute its future major licenses to whoever wants it, like the Robin Hood of wild capitalism. And Sony at this time is playing Prince Jean, not wanting to release its claws from its treasure.
Moreover, Xbox does not stop there to discredit Sony and make it the villain of its fairy tale. In a press release, Brad Smith pointed to the current dominance of the PlayStation in the console market. Sony is sacrificing itself when it’s largely in a strong position, and the current status quo isn’t conducive to competition at all, he says. A counterbalance would be desirable and necessary to weaken the Japanese company. The CEO comments posted by GameIndustry.biz are clear on this:
“Think about the European market. This is a market where Sony has an 80% share. Globally it’s about 70/30, while in Japan it’s 96/4. These numbers have remained surprisingly stable for two decades. Even last year, when there were issues with Sony’s supply chain, they came back strong.”
PlayStation exclusives have been going from cardboard to cardboard lately
Faced with such information, how do you explain why government agencies reacted so violently to Microsoft? According to Phil Spencer, the answer is simple (and pretty bold): they just don’t know what they’re talking about. The Xbox boss said – in an interview with The Times – to live with the philosophy in all antitrust investigations into him:
“Throughout my career at Xbox, I’ve run into government regulators who have no idea how the gaming industry works. […] I enjoy spending time with them as sometimes it helps them learn. I especially think that for many of them, this is the first time they have set foot in this industry.”
Indulgence or not, in the end, does not matter. Because, it would seem, Spencer’s reasoning is bearing fruit. Microsoft seems to find an answer to every one of the problems that the European Commission puts before it, and in the end… this one will be more and more favorable to it.
Microsoft, which will distribute the Call of Duty license throughout the universe
According to Reuters, the European Commission would be seduced by all of Microsoft’s arguments. Each of the issues has been successfully resolved, which is why Europe is now inclined to accept a merger between the Xbox manufacturer and Activision-Blizzard. Were Phil Spencer’s educational sessions effective? It’s hard to say, but we can say for sure that the scales have completely tipped in his favor.
However, the European Commission has not yet made a decision and has been given more time to deepen its analysis and issue a verdict. Now their decision is expected on April 25. However, even if Microsoft manages to overcome this first hurdle, the most difficult is yet to come. They also need to convince the CMA and FTC, who are still very skeptical about Microsoft presentations. Indeed, if the Xbox manufacturer continues to win battles, the war is far from over.
“We’re coming back.”
Redmond’s companies have no time to breathe, and they were not going to. Microsoft lawyers have just met with CMA regulators to begin initial discussions on their investigation, according to Bloomberg. The last issue raised in it pointed to the lack of influence of the alliance between Microsoft and Nintendo. According to the UK organization, Call of Duty is having a hard time running on the Switch, so a license swap would be unconvincing. It is not yet known what the American company will react to.
The FTC (with which Microsoft will also have to report shortly) has just launched a new attack against Sony. The Xbox maker is determined to retaliate against all the blows the opponent has thrown at him and has just received the referee’s permission to clear some of his personal papers. Among other things: the exchange of views between PlayStation and regulators since the case began, as well as everything related to Sony’s attitude towards its exclusives since 2019.
There is no doubt that a very big risk follows from this and that Microsoft will ruthlessly abuse its competitor. Unless, of course, Sony accepts the famous offer, which the Redmond-based company says it has been making for months. To avoid chaos, will the Japanese firm accept crumbs? If we were to come up with this scenario, one thing is certain: it would be a complete defeat for Sony.