Microsoft proposes Sony a 10-year licensing deal for Call of Duty on PlayStation

November 22, 2022

Aside from different regulators from different countries scrutinizing the proposed $69 billion Activision acquisition, Sony is one of the biggest forces questioning the merger. Through consistent protests, it manages to get the attention of competition watchdogs and push them to include its concerns in their decisions regarding the deal’s approval. Microsoft, on the other hand, has repeatedly been addressing it, promising to keep the famous video game franchise Call of Duty on Sony’s PlayStation console. Then, this month, Microsoft offered the rival a 10-year deal to keep the game on PlayStation. Sony, however, is silent about the offer. 

The new offer was divulged in a recent report by The New York Times, saying the proposal was made known to Sony on November 11. The step aims to give the company better assurance in having access to the game. Several months ago, PlayStation Chief Jim Ryan revealed that “Microsoft has only offered for Call of Duty to remain on PlayStation for three years after the current agreement between Activision and Sony ends.” Ryan described it as “inadequate on many levels and failed to take account of the impact on our gamers” and demanded a vague “guarantee” that would allow “PlayStation gamers continue to have the highest quality Call of Duty experience.” Now that Microsoft wants to extend it, Sony still seems unsatisfied.

In a recent interview with The Verge, Microsoft Gaming CEO Phil Spencer again addressed the concern regarding the span of Sony’s access to the game, saying there is no problem in finding “a longer term commitment” Sony and regulators “would be comfortable with.”

“It’s not about at some point I pull the rug underneath PlayStation 7’s legs and it’s ‘ahaha you just didn’t write the contract long enough.’ There’s no contract that could be written that says forever,” Spencer told The Verge. “This idea that we would write a contract that says the word forever in it I think is a little bit silly, but to make a longer term commitment that Sony would be comfortable with, regulators would be comfortable with, I have no issue with that at all.”

Moreover, Spencer stated how “maintaining and growing the existing Call of Duty business is pretty central to the economics of the deal.” In January, the Xbox Lead also revealed that the company made a quick call to Sony’s CEO right after the proposed merger’s announcement to ensure there wouldn’t be an issue regarding access to Call of Duty.

“Had good calls this week with leaders at Sony,” Spencer’s Twitter post reads. “I confirmed our intent to honor all existing agreements upon acquisition of Activision Blizzard and our desire to keep Call of Duty on PlayStation. Sony is an important part of our industry, and we value our relationship.”

Despite the consistent assurances, Sony stated in filings in Brazil that Microsoft could use Call of Duty to harm competitors. The idea was cited by UK’s Competition and Markets Authority in its Phase 1 investigation, and Microsoft said Sony misled the regulator and “overstated the importance of Call of Duty to its viability.” Ryan denied it and fired back, saying, “it is highly likely that the choices gamers have today will disappear if this deal goes ahead.”

Yet with the latest proposal to extend the licensing deal of the game on PlayStation (and Microsoft’s relentless repeated statements to keep Call of Duty multi-platform), Sony will still probably oppose the merger’s closing. Of course, the reason behind it is beyond the company’s goal to keep the game on its platform: Sony probably doesn’t want Microsoft to put Activision Blizzard games on Xbox Game Pass at launch. In case this happens, it would be a challenge for Sony. Simply put, Sony customers need to pay $70 immediately for Call of Duty Modern Warfare 2 on PlayStation, while Xbox only charges a minimum price of $10 per month for its Game Pass subscription. Once the deal closes, Microsoft could include the game on Xbox Game Pass at launch alongside hundreds of other titles to make it more enticing. That spells trouble for Sony.

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