Microsoft announced that Sony has finally signed a binding agreement to keep Call of Duty on PlayStation. The surprise announcement comes amid the FTC's struggles with halting the Activision Blizzard deal and Microsoft aggressively pushing to finalize the acquisition. While it remains to be seen what the specifics of the Sony and Microsoft agreement are, the deal marks the likely end of one of the biggest oppositions to the Activision purchase.
Over the past few months, Microsoft has looked to sign long-term deals with numerous stakeholders in the gaming industry as a means of winning regulatory favor. Microsoft went on to sign 10-year deals with the likes of Nvidia, Boosteroid, Nintendo, Ubitus, and a few others as regulators and rival companies like Sony raised their voices over the Activision Blizzard deal. While Microsoft has publicly offered a similar 10-year agreement to Sony on the promise of keeping franchises like Call of Duty on PlayStation, the company refused to sign the deal and continued to vocally oppose the pending acquisition.
Now, in a surprise announcement, Xbox chief Phil Spencer stated that Microsoft has signed a binding agreement with PlayStation to keep Call of Duty on the platform following the Activision Blizzard acquisition. The deal could be similar to the previous 10-year agreements that Microsoft has signed, though the specifics are currently unknown. However, it's likely that the Xbox maker may have included some exclusive commitments to Sony, particularly after the heated battle between the two companies over the acquisition during the past few months. Sony had earlier complained that Microsoft's Call of Duty offer could "irreparably harm competition" and that the company may even sabotage the PlayStation versions.
The agreement comes at an interesting time when the FTC's request to block the Activision Blizzard deal was denied, only to be followed by another denial by the Ninth Circuit Court of Appeals where the regulator appealed the ruling and requested emergency relief to block the acquisition. This meant that Microsoft was free to close the Activision Blizzard deal in time before hitting the July 18 deadline without having to foot the $3 billion fee. Although the two companies may renegotiate terms, the signing of a deal between Sony and Microsoft indicates that the acquisition will likely close soon.
However, it should be noted that one regulator still poses a challenge to Microsoft. After the pending acquisition was initially blocked by the UK's CMA, Microsoft and Activision Blizzard proceeded to appeal the decision in hopes of turning over the decision. However, following the FTC ruling, CMA and Microsoft agreed to pause legal proceedings to come to an agreement. At the time of writing, both parties are set to meet in a case management conference at the UK’s Competition Appeal Tribunal. Now, all eyes turn to the CMA as it has become the lone opposition to Microsoft's Activision Blizzard purchase.