January 20, 2022
On the heels of Microsoft’s mega $69 billion acquisition of video game publisher Activision Blizzard, scuttlebutt suggests the deal could see the elimination of marquee Activision franchises such as “Call of Duty” and “Warcraft” from the Sony PlayStation platform.
While the speculation of the deal valued at $75 billion sent Sony’s stock price tumbling, the media giant quickly issued a statement contending it expects its PlayStation platform will continue to have access to Activision games going forward.
“We expect that Microsoft will abide by contractual agreements and continue to ensure Activision games are multiplatform,” a spokesperson told The Wall Street Journal.
The deal undoubtedly faces regulatory scrutiny over exactly such issues before it is approved sometime next year. Regardless, Wedbush Securities media analyst Michael Pachter contends Microsoft/Xbox’s market leverage increases exponentially going forward.
“[The acquisition] has great potential to hurt PlayStation, and that is likely to be [a] sticking point with regulators,” Pachter said in an email. “Who would buy a PS5 if they aren’t assured that future Activision games will be available on the platform? That is a problem, and I expect regulators to raise it.”
The analyst contends regulators would (if the merger is approved) likely mandate a consent decree that requires Microsoft to continue to offer Activision games on PS5 for a number of years.
“But until the regulators look at this, we won’t know for sure,” Pachter said.
While issues involving Activision titles made available for PlayStation generate news, Microsoft’s goal behind the deal appears more cloud based than console. The tech giant, along with most of its competitors, has been transitioning many of its products to a subscription-based business model.
With an eye toward replicating the success Netflix had creating the SVOD market, Microsoft is aiming significantly up its Game Pass subscription service. The Activision deal would make Microsoft the No. 3 game publisher in the world. Media reports suggest 400 million gamers engage with Activision titles on a monthly basis — a tally, if converted into subscribers, would exceed the combined subscriber bases of Netflix and Disney+.
“Together with Activision Blizzard, we have an incredible opportunity to invest and innovate, to create the best content, community and cloud for gamers to build substantial new value for our shareholders,” Microsoft CEO Satya Nadella said on a Jan. 19 media call.