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A soldier in a beret wields two knives — one of them a ballistic knife — with an explosion in the background in a screenshot from Call of Duty: Black Ops Cold War

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The Microsoft Activision circus needs to be over and done with

Microsoft and Sony’s squabbling over Call of Duty is an embarrassment

Image: Treyarch/Activision
Oli Welsh is senior editor, U.K., providing news, analysis, and criticism of film, TV, and games. He has been covering the business & culture of video games for two decades.

Activision Blizzard’s outspoken chief communications officer, Lulu Cheng Meservey, decided last week that it was time for the gloves to come off in the battle of words with Sony over Microsoft’s proposed acquisition of her employer (as if the gloves had ever been on in the first place). On Twitter, she quoted PlayStation chief Jim Ryan directly as saying, “I don’t want a new Call of Duty deal. I just want to block your merger.” Meservey said Ryan spoke these words on Feb. 21, the date of a meeting between interested parties in the deal and the EU’s antitrust regulator.

This was both shocking, and not at all shocking. It was shocking that Meservey was willing to quote Ryan in this way — not the norm between business executives involved in a negotiation. And it was shocking that, if he was indeed quoted accurately, Ryan was willing to state his company’s position so baldly.

Meservey is hardly a reliable witness. As a senior Activision executive, she presumably has a large, personal financial interest in the deal going through. She is also very much a post-Trump communicator, unafraid to look like a bad guy and wield tweets like deadly weapons in the name of “honesty.” As such, she is a useful attack dog for Microsoft, which can maintain the air of gentlemanly largesse it has attempted to project throughout its wrangles with Sony and regulators, and leave it to her to go places it would never dare itself.

But — and here is the not-shocking part — the words Meservey put in Ryan’s mouth are nothing if not an accurate description of Sony’s stance. A deal to protect Call of Duty’s place on PlayStation is on the table from Microsoft, and it’s apparently good enough for Nintendo and Nvidia. At no point has Sony shown any interest in negotiating to extract further concessions; it just wants to use its leverage with regulators to stop a deal that will greatly strengthen its competitor, exclusives or no exclusives. It will fight tooth and nail to take its rival’s legs out and cost them money, as any business in its position might. It would be naive to think that Microsoft wouldn’t do the same.

Microsoft’s Brad Smith, wearing a dark suit, waves a piece of paper around next to a board that reads ‘150 million’
Microsoft president Brad Smith displays a copy of an agreement he says was offered to Sony at a press conference in Brussels
Photo: Nicolas Peeters/Melting Prod/Microsoft

This is all, broadly, fair enough, by the rules of the game: That’s capitalism! The trouble is that the regulators — the European Commission, the U.K.’s Competition and Markets Authority, and the U.S. Federal Trade Commission — have allowed their own political interest to drag them, Sony, Microsoft, and Activision Blizzard into an unseemly spectacle that is only doing reputational damage to all involved, that is wasting vast amounts of time and money, and that is actively harmful to the game industry that it is supposed to be protecting.

The political climates in the U.S., U.K., and EU are generally aligned on a need to curb the enormous power of the tech giants Google, Amazon, Apple, Meta, and Microsoft. This is hard to disagree with; there’s understandable regret that deals such as Meta’s (then Facebook’s) acquisitions of Instagram and WhatsApp were allowed to go through. So Microsoft has a target on its back, and the enormous $68.7 billion price tag it put on Activision Blizzard has inevitably drawn the regulators’ attention.

But the case that this deal will greatly reduce competition in gaming is a weak one, and relies on a very narrow conception of the global game industry. As powerful as Call of Duty, Warcraft, and Candy Crush are, there is no world in which acquiring them makes Microsoft any kind of monopolistic threat in an industry where titans like Epic Games, Tencent, and Sony itself can reach the top of the revenue charts using completely different strategies in different arenas. (Now, if Microsoft had moved to buy Epic — makers of the dominant game engine, Unreal, as well as one of the most popular games, Fortnite — that might have been a deal worth examining.) Regulators didn’t understand this, though, and so have allowed themselves to be unduly swayed by Sony’s arguments about Call of Duty’s influence in the console market, which are, at best, a distraction from more valid concerns, like Microsoft’s early lead in subscriptions and cloud gaming.

Sony’s case rests on its own conception of games as a product business, where jealously gatekeeping intellectual property is the standard modus operandi. But Microsoft has proven for almost a decade now that it thinks about games and gaming platforms differently. Just look at its handling of Minecraft; no regulators were there to strong-arm Microsoft into legal agreements to keep the game available on PlayStation and Nintendo. And yet, nine years later, there it remains, because it’s in Microsoft’s interest to keep it there. The same is true of Call of Duty, as Valve boss Gabe Newell pointed out when he confidently dismissed Microsoft’s offer of a 10-year deal to keep it on Steam as unnecessary. At this level, a game’s value is in the size of the audience it captures, not in its usefulness as a marketing lure for a console that isn’t even that central to Microsoft’s business plan. Indeed, Microsoft, under gaming chief Phil Spencer, has been banging the drum of a platform-agnostic gaming future for years, and has been the one leading a reluctant Sony into initiatives like cross-platform play on Fortnite and other games.

Minecraft Steve standing on a stone ledge as the sun sets behind him in a purple sky.
Microsoft has kept Minecraft available on all platforms without legal agreements or regulatory pressure, because it’s in its interest to do so
Image: Mojang/Microsoft

But Sony has a one-track mind. Perhaps that’s what led it to what will hopefully be the nadir of this sorry campaign. In submissions to the U.K. regulator published last week, Sony argued that Microsoft, if it did deign to release Call of Duty on PlayStation, might choose to intentionally cripple the PlayStation version with deliberate bugs or performance issues. As well as irresponsibly stoking console-warrior conspiracy theories, this absurd claim is disrespectful to Call of Duty’s developers, to the entire industry — and, frankly, to the regulators themselves, if Sony thinks they are credulous enough to believe the industry and community of games operate this way.

Maybe they are; or maybe Sony really is that paranoid. But this claim — that its competitor might disable its own product out of spite — does nothing if not expose the weakness of Sony’s own argument and the schoolyard level of the rhetoric being used. Not to excuse Microsoft of complicity in the latter: Its stunt in Brussels after the Feb. 21 meeting, where Brad Smith waved around a copy of the offer to Sony that he supposedly carries with him everywhere, is just the pompous, hall-monitor version of it. This circus is doing no one in the video game industry any favors, and it’s probably pointless, too. The regulators must know their antitrust case is not strong in this instance, and having extracted some “behavioral remedies” (an odd term that makes legally binding business contracts sound like the naughty step) from Microsoft, they will likely fold. It has already been indicated the EU will be the first domino to fall.

As strange as it may seem to root for the 11-figure corporate takeover, the truth is that Microsoft acquiring Activision Blizzard would probably be a net positive for the gaming community. Activision Blizzard is a horribly run company, where the ruthlessness of Bobby Kotick’s leadership team is grinding its creative workforce into dust. Blizzard, in particular, seems near the point of total collapse. After the appalling revelations of the California lawsuit about its “frat boy” culture, the studio was in a fragile rebuilding phase when news of a shockingly bad all-hands meeting leaked, in which president Mike Ybarra took a callous line with restive employees that was surely received from above. You can see the fault lines in Blizzard’s recent releases: the misconceived, perfunctory Overwatch 2 and the predatory monetization of Diablo Immortal.

Microsoft hardly has a spotless record when it comes to taking over game studios; look at the bungled handling of Lionhead that ended in its closure, for example. But the labor neutrality agreement it signed with the Communications Workers of America union last year would be a genuine sea change for all Activision Blizzard staff, which could easily trigger a positive halo effect across the entire industry. To put it another way: Wouldn’t you rather have Phil Spencer as your boss than Bobby Kotick?

It’s time to stop the squabbling and posturing and let Microsoft complete this deal. That choice is in the regulators’ hands. If they want to preserve the health of the industry and the medium, and act in the interests of the people who make video games and enjoy them, they need to approve the deal before the good that it might do is outweighed by the damage caused in getting it done.

Correction (March 15): A previous version of this story stated incorrectly that Jim Ryan’s comment, quoted by Lulu Cheng Meservey, was made at the closed-door meeting between interested parties in the deal and the European Commission. According to Meservey, it was made outside the meeting and was subject to no confidentiality agreement. We’ve edited the article to reflect this.