Xbox boss Phil Spencer has taken to Twitter to talk about one of the key bones of contention surrounding the agreed acquisition of Activision Blizzard by Microsoft. While Sony has stated that they expect Microsoft to honour contractual agreements with Activision, Spencer has now confirmed that it’s Microsoft’s intention to “keep Call of Duty on PlayStation.” Had good calls this week with leaders at Sony. 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. — Phil Spencer (@XboxP3) January 20, 2022 This follows previous statements in interviews that “It’s not our intent to pull communities away from that platform and we remained committed to that,” but there’s still plenty of leeway in the practical act of keeping COD on PlayStation. This is a statement that has absolutely been framed in a way that’s meant to please government regulators, similar to those made in the run up to the Bethesda acquisition last year. Call of Duty is no longer a single product line for Activision, and is instead made up of the yearly main game releases like Call of Duty: Vanguard, alongside the free-to-play battle royale Call of Duty: Warzone, and the free-to-play mobile shooter Call of Duty: Mobile. Sony has an exclusive content agreement with Activision that guarantees them some kind of bonus content for PlayStation. When regular map packs were still a thing in 2015 that was a one month head start on DLC releases, but that has morphed into PlayStation exclusive game modes and now, for Vanguard, PlayStation exclusive cosmetics and XP boosts. The most likely course of action for Microsoft to take is to have the main Call of Duty games continue to release on PlayStation through the course of the agreement with Sony – up until the 2024 Call of Duty if they have been signing 5-year deals – and only then shift the game to being an Xbox exclusive. After that point, Microsoft can say that COD is still on PlayStation by keeping a free-to-play game like Warzone on Sony’s consoles. It could even be that Call of Duty no longer sees yearly releases, as Spencer said in an interview with the Washington Post that he will talk with the many studios toiling on COD content “about working on a variety of franchises” from the Activision Blizzard vaults. Even the developers of Crash Bandicoot 4 and Tony Hawk’s Pro Skater 1+2 have been roped into supporting efforts at Activision and Blizzard, and there’s no denying that it would be good to see Activision’s 11 studios no longer beholden to grinding out content for a single franchise. Further Reading: What does Microsoft buying Activision Blizzard mean for gamers? All of this follows Microsoft’s track record with recent acquisitions. Psychonauts 2 was a cross-platform release, albeit with an Xbox Series X|S exclusive upgrade for the new generation, while Wasteland 3 was released with Koch Media publishing. Similarly, despite having acquired Bethesda at the start of last year, Microsoft is honouring the exclusivity agreements that have made Deathloop and Ghostwire Tokyo into timed PlayStation 5 exclusives. Of course, where there hasn’t been an existing agreement, Microsoft and Bethesda have confirmed that Starfield, Redfall will be Xbox console exclusives, and hinted that The Elder Scrolls VI will follow suit. Source: Twitter

Xbox's acquisition of Activision Blizzard is raising questions about how Microsoft will handle its extensive list of properties – whether they will remain on platforms like PlayStation 5 or become entirely exclusive to the Xbox.

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Sony expects that Activision games will still come to PlayStation consoles if Microsoft’s buyout is completed, keeping some of the biggest franchises in video games as cross-platform titles and not turning them into Xbox exclusives. You might be doubting them, but they cite existing contractual agreements between PlayStation and Activision as the reason for their belief. A Sony spokesman told the WSJ that “We expect that Microsoft will abide by contractual agreements and continue to ensure Activision games are multiplatform.” Activision and Sony have had a long-standing content exclusivity agreement with PlayStation for the Call of Duty franchise, dating back to the 2015 release of Call of Duty: Black Ops 3. Since that point, Activision has given timed exclusivity on DLC expansions (when paid map packs were still a thing), bundled in PlayStation exclusive game modes for Modern Warfare and Black Ops Cold War, or simply offered specific XP boosts and other perks to PlayStation players. That should allay some of the fears that many have had over the $68.7 billion Activision Blizzard buyout announced earlier this week, with Microsoft expected to shift previously cross-platform franchises to become Xbox, PC and Xbox Game Pass exclusives. Additionally, when asked directly about this by Bloomberg earlier this week, Xbox boss Phil Spencer said “I’ll just say to players out there who are playing Activision Blizzard games on Sony’s platform: It’s not our intent to pull communities away from that platform and we remained committed to that.” All we have to do is look at Microsoft’s track record with their blockbusting gaming acquisition to find out what their most likely plan is. The company has never taken a hardline stance at acquired studios make their in-progress game releases into Xbox exclusives. Psychonauts 2 was a cross-platform release, albeit with an Xbox Series X|S exclusive upgrade for the new generation, while Wasteland 3 was released with Koch Media publishing. Similarly, despite having acquired Bethesda at the start of last year, Microsoft is honouring the exclusivity agreements that have made Deathloop and Ghostwire Tokyo into timed PlayStation 5 exclusives. Of course, where there hasn’t been an existing agreement, Microsoft and Bethesda have confirmed that Starfield, Redfall and The Elder Scrolls VI will be Xbox console exclusives. Further Reading: What does Microsoft buying Activision Blizzard mean for gamers? So, what can we expect to happen with Activision and Blizzard games? Call of Duty: Warzone is likely to be a permanent fixture across all platforms, the free-to-play game a money-spinner that nobody would sensibly want to shut down at this point. The main Call of Duty releases will likely stay as cross-platform games, while there’s still a contract to honour – historically this contract ran for five years from 2010-2014 when on Xbox, and would likely have been renewed in 2020 by Sony and Activision for PlayStation. This could see Call of Duty games remain on PlayStation until 2025, or until a set number of games have been released. Outside of Call of Duty, and if Activision ever produce any games based on their collection of IPs that include Crash Bandicoot and Spyro, you can bet they will be Xbox exclusives from the off. On the Blizzard side of things, Overwatch will be receiving a significant overhaul so that the game will remain in lockstep with Overwatch 2’s multiplayer content. That will likely continue to be the plan, though there’s a question mark over whether Overwatch 2 will be released on PlayStation, or if they’ll leave players with the old game. Diablo IV and all other future game releases will surely be Xbox console exclusives, though. Of course, that depends on whether either game is released before or after any Microsoft buyout can be completed. That’s a big if, as the last twelve months have seen much greater scrutiny on tech giant acquisitions by government regulators. Source: WSJ (paywalled)

Microsoft have gone and done it again, announcing the intended acquisition of Activision Blizzard in a move that will have a potentially huge impact on the future of the games industry. What does this really mean though? Will Call of Duty now be an Xbox exclusive? The Deal of the Century? First things first, the deal itself is huge. Microsoft and Activision Blizzard’s respective boards have agreed to a sale worth a whopping $68.7 billion. That’s just stupid money. That’s the kind of money that we used to only really see with the fundamentals of everyday life, when mobile phone companies merge or separate, when energy companies combine, when car manufacturers or pharmaceuticals unite. That thinking is old hat now. The tech and entertainment companies are coming and they want to own… stuff. Just all the stuff, please. Yeah, more stuff. Who doesn’t love having loads and loads of stuff? Disney certainly likes having stuff, having picked up Marvel on the cheap and turned its properties into a never-ending stream of films and TV shows, then snagged Star Wars for a now laughably small $4 billion, and eventually setting its sights on beefing up its new streaming service by acquiring media rival 21st Century Fox for $71.3 billion in 2018. In the realms of video games, we have widespread investment from Chinese conglomerates, we have Embracer Group buying up everything in sight, and Sony and Microsoft both seeking to expand their first party studios. $68.7 billion might feel like a huge sum for Activision Blizzard, but it’s actually a good deal for Microsoft. ABK has exploded in value over the past decade, making it a part of the S&P 500 index which charts the 500 biggest companies in the US. This time last year, Activision Blizzard’s market cap was about to hit an all-time high of $80 billion on 12th February 2021, though typically hovering around $70 billion for the first half of the year. It hasn’t stayed that way, though. Something happened around the middle of 2021 that saw the company’s valuation slide from that $70 billion mark to under $50 billion. Part of that is purely financial – delays to game releases from Blizzard amongst them – but another part is the scandal that has surrounded the company like someone filled Bobby Kotick’s pockets with rotten eggs. How can Microsoft make this money back? Simply put, they don’t need to. Activision’s 2020 revenue was $8 billion, but their operating income was $2.7 billion. At that rate, it would take 25 years to make the money back… but that’s really beside the point for Microsoft. This is about key, strategic content that gives them a further competitive advantage in a growing market. Oh, and Microsoft had $120 billion in the bank in 2020 and an operating income of $70 billion in 2021. They have plenty left over… Will he stay or will he go? Microsoft’s willingness to acquire Activision Blizzard means that they’re prepared to take on the job of cleaning up its reputation. For the time being, the company will continue to be run as normal by CEO Bobby Kotick and his team as they navigate lawsuits, striking workers and unionisation efforts. They have to carry on business as usual until the deal is approved. While the company has taken steps, ousting over 40 individuals in recent months for transgression, declaring a zero tolerance policy, and promising to make contracted workers full time, there’s still more work to be done. Kotick himself is a part of the problem, having previously drawn criticism for cutting the company’s workforce despite record profits in 2018, and also having allegedly been aware of allegations and done nothing to address them. The wording of the deal’s announcement states that Kotick will carry on, though certainly leaves the door open for him to leave as soon as the purchase is approved and completed or after a transition period. His position and reputation don’t feel tenable as a part of Microsoft and reports suggest that he is to leave after any deal is concluded. I’m sure some will be hoping the door hits him on the arse on the way out. Will everything go Xbox exclusive? Maybe? We just don’t know at this point, with Phil Spencer’s only comments so far being that he hopes to bring as much of Activision’s back catalogue into Xbox Game Pass as soon as possible. However, we can look at the company’s track record here. For one thing, Xbox has allowed recent acquisitions to see out their various contracts and obligations, from Psychonauts 2 coming to PS4 and Deathloop being a timed PS5 exclusive. Additionally, existing game releases have also been allowed to continue on, so Minecraft is available on every platform imaginable. However, exclusive content drives attachment, and that’s why Bethesda’s Starfield will be exclusive. Looking at Activision’s portfolio, we can speculate that they’d pick and choose different approaches depending on the game and franchise. Call of Duty: Warzone is a free-to-play offshoot that needs to reach as many people as possible, but that could go hand in hand with future paid games in the franchise becoming Xbox exclusive. Similarly, Overwatch 2’s unusual release plan as a semi-expansion to Overwatch could get the blue light to come to PlayStation, as it’s building on an already released game. Diablo IV, though? Bet on that being an Xbox exclusive if the release comes after the finalised acquisition. The one thing we can definitively say is that everything will be thrown into Xbox Game Pass. Will we get the “old” Blizzard back? And what about Activision? In a word, no, but first I have to explain the question. Many fans have become disillusioned with some of the decisions that Blizzard have made over the past decade. There’s a feeling that the company has become too corporate and lost touch with its fans when announcing things like the mobile-only Diablo Immortal, the disappointing rushed release of Warcraft III: Reforged, and subsequent disbanding of the team that worked on it. There’s no putting a genie like that back in the bottle, and considering some of the rot that was revealed last year, I don’t think we want that genie back. Blizzard will still remain a part of Activision Blizzard, which will be a separate division under Xbox, but there might not be the same push to hit release targets that could help restore some of the “when it’s ready” ethos that led to them striking gold with World of Warcraft and Overwatch. Similarly, the pressure could be lifted on Activision’s Call of Duty content mill. Needing a new COD every single year means that Activision now has pretty much every one of their studios making content for this franchise. That’s a crying shame when Toys for Bob has just shown what they can do with Crash Bandicoot 4, and Vicarious Visions (now a part of Blizzard) revived Tony Hawk’s Pro Skater 1+2 to great acclaim. Microsoft’s acquisitions so far have been to secure a diverse portfolio, and on the Activision side of the company, that’s not currently what’s happening. Will the acquisition be approved? This is the big question, and while there is increasing scrutiny over tech companies making huge purchases like this, I can’t see it being blocked by the European Commission or the US Securities and Exchange Commission that will be looking into the impact that this will have on the games industry. In particular, they’ll be looking at the rulings they received when acquiring Bethesda. Yes, the deal is almost ten times the size and the revenue that Activision Blizzard generates is much greater, but the argument will be that this does little to nothing to harming the diversity of games on offer across the industry and across competing platforms, and that Microsoft aren’t buying an erstwhile competitor. PlayStation will likely remain the dominant platform for the foreseeable future… though if Call of Duty goes X box exclusive, who could say what the future holds?

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