Documents from the UK’s regulator reveal Sony is worried about Microsoft’s strategies around Call of Duty.
Sony has laid out its concerns about Microsoft’s proposed acquisition of Activision Blizzard, including a host of fears about the future of Activision’s Call of Duty franchise. In new documents (pdf) submitted to the UK’s Competition and Markets Authority (CMA), Sony says it’s worried that Microsoft could raise the price of Call of Duty, make it only available on its own Xbox Game Pass subscription service, and even strategically or incidentally degrade the quality and performance of Call of Duty on PlayStation.
Sony cites a specific hypothetical situation where Microsoft could release a Call of Duty game on PlayStation that has bugs and errors on the final level. Here’s Sony’s example in full:
Microsoft might release a PlayStation version of Call of Duty where bugs and errors emerge only on the game’s final level or after later updates. Even if such degradations could be swiftly detected, any remedy would likely come too late, by which time the gaming community would have lost confidence in PlayStation as a go-to venue to play Call of Duty. Indeed, as Modern Warfare II attests, Call of Duty is most often purchased in just the first few weeks of release. If it became known that the game’s performance on PlayStation was worse than on Xbox, Call of Duty gamers could decide to switch to Xbox, for fear of playing their favourite game at a second-class or less competitive venue.
Sony leaves ambiguous whether this would be intentional damage or a “plays best on Xbox” scenario where Microsoft’s close ties to Call of Duty would make it work better on that platform. But more broadly, Sony fears Microsoft might strategically try to sabotage Call of Duty on PlayStation in multiple ways: by “degrading the quality and performance of Call of Duty on PlayStation compared to Xbox”; “degrading Call of Duty to ignore PlayStation-specific features (eg. better controller haptics)”; or “restricting, degrading, or not investing in the multiplayer experience on PlayStation.”
It’s not entirely surprising that Sony would be concerned about Microsoft prioritizing Call of Duty on its own Xbox platform or ignoring new Sony hardware features. Both companies have been battling it out for Call of Duty rights for years, with exclusive skins, bonuses, and packs all part of strategies for both companies to entice console gamers onto their platforms.
It’s unlikely Microsoft would intentionally sabotage Call of Duty on PlayStation with bugs, though. While that might make a PlayStation console look bad, it’s far more likely to generate backlash for Activision and Microsoft instead. The reality could be far more subtle. Microsoft and Activision may eventually prioritize bug fixes on Xbox versions of the game because their developers are simply more familiar with the platform or issuing fixes could be quicker on Xbox.
There are a whole host of reasonable concerns around Call of Duty gaining subtle advantages on Xbox. But they’re unlikely to add up to a corporate strategy to hurt Call of Duty on PlayStation and lose the revenue it drives for both the platform holder and publisher.
Sony is also worried about Microsoft keeping Call of Duty on Xbox Game Pass and not letting Sony offer the title on its own PlayStation Plus service. Conversely, in its own filing to the CMA (pdf), Microsoft says that “any CoD Game in a Microsoft multi-game subscription is eligible for inclusion in Sony’s multi-game subscription service, at the same time and for the same duration.”
But Sony clearly isn’t happy with the licensing terms or pricing. The document is heavily redacted, but Sony says the terms “would commercially destroy Sony Interactive Entertainment’s (SIE) multigame subscription business model.”
Microsoft has offered Sony a 10-year deal on Call of Duty, but the PlayStation maker has not yet signed the license. Microsoft revealed it had signed a binding 10-year agreement with Nintendo to bring Call of Duty to Nintendo platforms just hours before a key meeting with EU regulators last month. Microsoft then announced a similar deal with Nvidia hours later in an attempt to pressure Sony to agree to similar terms.
“Microsoft has not shown any real commitment to reaching a negotiated outcome,” says Sony in its CMA filing. “They have dragged their feet, engaged only when they sensed the regulatory outlook was darkening, and favored negotiating in the media over engaging with SIE.” Sony is likely referring to details of Microsoft’s proposed deal that The Verge revealed last year and which PlayStation chief Jim Ryan labeled “inadequate on many levels.” Ryan also said at the time that he “hadn’t intended to comment on what I understood to be a private business discussion, but I feel the need to set the record straight because Phil Spencer brought this into the public forum.”
The CMA documents were filed last month and made public today, just weeks after the British regulator warned of potential harm to gamers and offered up possible remedies that include Microsoft being forced to sell off Activision Blizzard’s business associated with Call of Duty.
Sony agrees with the CMA’s initial findings and pushes it to address its own concerns through structural remedies like selling off Call of Duty. The CMA is currently analyzing 3 million Microsoft and Activision documents and more than 2,100 emails from the public, according to Sony’s remedies notice. The UK regulator is considering responses to its potential remedies before a final ruling about the acquisition is due by April 26th.
Elsewhere, EU regulators are reportedly likely to approve Microsoft’s $68.7 billion deal. The licensing deals Microsoft struck with Nintendo and Nvidia recently are said to have eased concerns, with the European Commission reportedly unlikely to demand that Microsoft sell any Activision Blizzard assets as a condition of regulatory approval.