microsoft: Explained: Why FTC ‘killing’ Microsoft’s biggest gaming deal may be a huge mistake

Microsoft ‘s acquisition of Activision Blizzard has been under scrutiny in multiple markets with direct competitor Sony being the “loudest objector” of the deal. The Japanese company has argued that if the purchase goes through Activision’s cash cow Call of Duty franchise will become an Xbox exclusive. However, the Windows-maker has rejected these claims saying the games will be available on PlayStation as well.

In the latest development, the company’s top executive has revealed that Microsoft has offered Sony a 10-year contract to make each new "Call of Duty" release available on PlayStation. He also notes how this offer is consumer-friendly and will help innovation.

Currently, the deal is under scrutiny in the US by the Federal Trade Commission (FTC), Competition and Markets Authority in the UK and antitrust regulators in the European Union (EU).

Brad Smith, vice chairman and president of Microsoft, wrote in an article in The Wall Street Journal that the Federal Trade Commission (FTC) suing Microsoft to stop the acquisition of Activision Blizzard “would be a huge mistake” as it “would hurt competition, consumers and thousands of game developers.”

He said that Microsoft faces huge challenges in the gaming industry because Xbox remains is at third place in console gaming after Sony's PlayStation and the Nintendo Switch. He goes on to say that Microsoft’s gaming arm does not even have “meaningful presence in the mobile game industry” because a significant portion of the revenue generated by the fastest-growing segment of gaming goes to Google and Apple through their app-store fees.

As per Smith, the Activision Blizzard acquisition will enable Microsoft to compete against companies through innovation. Furthermore, it wants consumers to have an option to subscribe to a cloud gaming service “that lets them stream a variety of games on multiple devices for one reasonable fee” so that it benefits developers and consumers alike.

“To get subscribers to this service, Microsoft needs a full library of popular games and, as things stand, we simply don't have enough. That's where the acquisition comes in. Activision Blizzard comes with popular mobile, PC and console games, including ‘Candy Crush’, ‘World of Warcraft’ and ‘Call of Duty’," Smith wrote.

Sony’s concerns on Microsoft-Activision Blizzard deal
Sony says that the deal will force several PlayStation users to switch to Xbox consoles to access the famous first-person shooter titles such as Call of Duty and will harm gamers. The Japanese gaming company also claims that Microsoft will be able to raise prices on Xbox games, Xbox consoles and Xbox Game Pass once the deal closes.

Microsoft’s offer to Sony
Microsoft has repeatedly said that Call of Duty will remain available for gamers on PlayStation. Earlier, Microsoft offered a three-year deal to keep Call of Duty on PlayStation but Sony rejected it saying that the offer was “inadequate”. Later, Microsoft reportedly offered Sony 10 years of Call of Duty on PlayStation. Smith’s article confirms this development. Sony is yet to issue a public statement regarding the offer.

“We've offered Sony a 10-year contract to make each new ‘Call of Duty’ release available on PlayStation the same day it comes to Xbox. We're open to providing the same commitment to other platforms and making it legally enforceable by regulators in the US, the UK and European Union,” Smith wrote.

He drew parallel with Netflix-Blockbuster’s failed deal saying that it is better “to stream a movie from your couch than drive to Blockbuster.”

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