Microsoft to Bow Newest ‘Call of Duty’ Video Game Concurrently on Streaming

In a first, Microsoft announced it will release the latest edition of the popular “Call of Duty” video game franchise on its branded Xbox Game Pass subscription service day-and-date with the retail release later this year.

Microsoft will offer details on the game in a June 9 reveal at 10 a.m. PST.

Call of Duty: Black Ops 6 is the newest first-person shooter game release in the $30 billion franchise with reportedly more than 425 million units sold from publisher Activision Blizzard, which Microsoft acquired last year for $69 billion.

Microsoft reports its Game Pass streaming service has 34 million paid subscribers, offering monthly options priced from $9.99.

With the retail price for a typical “Call of Duty” console video game reaching $70, offering the title concurrently for less-expensive streaming underscores the changing retail landscape for video games, and is a direct blow to competitor Sony’s Play Station ecosystem, according to Michael Pachter, media analyst with Wedbush Securities in Los Angeles.

“In order to offset this, [Microsoft] would have to attract at least 2 million incremental subscribers at $15 per month, but realistically, many (if not all) of these are people who would have otherwise purchased the game, increasing the loss of game sales,” Pachter wrote in a note. “Most likely, they would have to add around 4 million subscribers to break even.”

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Microsoft Finally Completes $69 Billion Activision Blizzard Acquisition

Microsoft Oct. 13 announced it has formally closed its $69 billion acquisition of Santa Monica, Calif.-based video game publisher Activision Blizzard — after overcoming a year of regulatory challenges in the U.S. and U.K. that questioned the deal’s impact on competition in the gaming industry.

In Britain, the country’s regulatory agency, the Competition and Markets Authority, on Friday withdrew their objections after Microsoft agreed to allow Activision to license its budding cloud-based gaming to third-party competitors. In other countries, Microsoft agreed to license Activision’s key titles, including Call of Duty and World of Warcraft, to rivals such as Nintendo and Sony PlayStation.

“Today, we officially welcome Activision Blizzard and their teams to Xbox,” Phil Spencer, CEO of Microsoft Gaming, wrote in a blog post. “They are the publishers of some of the most played and most beloved franchises in gaming history across console, PC and mobile. From Pitfall to Call of DutyWorld of Warcraft to OverwatchCandy Crush Saga to Farm Heroes Saga, their studios have pushed the boundaries of gaming for players around the world.”

Spencer said Microsoft would continue to make more branded games available in more places by enabling third party cloud streaming providers and players to stream Activision Blizzard games in the European Economic Area, a commitment made earlier to the European Commission.

“Today we start the work to bring Activision, Blizzard, and King franchises to Game Pass and other platforms,” Spencer wrote. “We’ll share more about when you can expect to play in the coming months. We know you’re excited — and we are too.”

U.K. Regulators Give Preliminary Approval to Microsoft’s $68.7 Billion Activision Acquisition

The U.K.’s Competition and Markets Authority Sept. 22 agreed to give preliminary approval to Microsoft’s $68.7 billion acquisition of video game publishing giant Activision Blizzard. The greenlight marks the last hurdle for Microsoft, which first announced the acquisition in January 2022.

The regulatory agency said Microsoft had addressed it concerns in a restructured merger proposal, which included Microsoft agreeing not to purchase the cloud gaming rights held by Activision, which will instead be sold to an independent third party, Ubisoft Entertainment SA, before the deal is completed.

Ubisoft will be free to offer Activision’s games, which include the “Call of Duty” and “World of Warcraft” franchises, both directly to consumers and to all cloud gaming service providers however it chooses, including for buy-to-play or multigame subscription services, or any new distribution model for providing content that might emerge as the market develops. The deal with Ubisoft also requires Microsoft to port Activision games to operating systems other than Windows and support game emulators when requested, addressing the other main shortcoming with the previous remedies package.

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Earlier this year, the CMA blocked Microsoft from acquiring the whole of Activision due to concerns that the deal would harm competition in cloud gaming in the United Kingdom. After that deal was blocked, Microsoft submitted a restructured transaction in August for the CMA to review.

“The CMA’s position has been consistent throughout — this merger could only go ahead if competition, innovation, and choice in cloud gaming was preserved,” Sarah Cardell, CEO of the CMA, said in a statement.

Cardell said the deal would have been approved far earlier had Microsoft put forward the restructured deal during the agency’s original investigation. She said the case illustrates the costs, uncertainty and delay that parties can incur if a credible and effective remedy option exists, but is not put on the table at the right time.

“Microsoft has now substantially restructured the deal, taking the necessary steps to address our original concerns,” Cardell said in a statement.

U.S. Supreme Court Refuses to Block Microsoft-Activision $69 Billion Merger

An emergency appeal to the U.S. Supreme Court by a group of video gamers seeking to block Microsoft’s pending $69 billion purchase of publishing giant Activision Blizzard (publisher of Call of Duty) has been denied by the high court. An application for injunction ahead of the midnight termination deadline tonight had been submitted to Justice Elena Kagan, who denied it on July 18.

The denial comes on the heels of the Federal Trade Commission’s failed effort to block the deal last week when a federal appeals court judge in San Francisco denied the government’s request. It remains to be seen whether the FTC seeks alternative avenues to block the deal it said would pose an unlevel playing field to video game-playing consumers.

Tonight’s deadline is expected to pass with closing of the deal. An extension will likely be granted to deal with ongoing regulatory concerns in the United Kingdom. Should the deal fail, Microsoft is on the hook to Activision for a $3 billion break-up fee.

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FTC Loses Final Attempt to Stop Microsoft’s Activision Acquisition; U.K. Remains Last Obstacle

On July 14, the U.S. Court of Appeals for the Ninth Circuit denied the Federal Trace Commission’s appeal of a district court decision refusing to issue an injunction in Microsoft’s pending $69 billion acquisition of Activision Blizzard and its “Call of Duty” franchise that dominates the video game market.

The FTC had asked the appeals court for a temporary pause on the July 18 termination date where Microsoft or Activision could walk away from the deal (and Microsoft pays Activision a $3 billion dollar separation fee). Last week, the U.S. District Court in San Francisco denied the FTC’s motion for a preliminary injunction during the federal government’s review process continued, with the trial set to begin on Aug. 2.

In addition, the S.F. court modified its temporary restraining order unless the FTC was able to obtain a stay from the Ninth Circuit Court of Appeals. The FTC did not get that stay, and the restraining order has now expired. The U.K.’s regulatory “Competition and Markets Authority” ruling remains the lone obstacle to consummation of the deal.

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In response to the appeals court decision, U.K. regulators said they would be open to reviewing a restructured deal, extending its final decision from July 18 to Aug. 29, in order to receive “a detailed and complex submission from Microsoft claiming that there are material changes in circumstance.”

Michael Pachter, media analyst with Wedbush Securities in Los Angeles, remains confident Microsoft can operate its Game Pass subscription business in the United Kingdom separately and will receive the CMA’s approval.

Even Sony Interactive Entertainment, a major objector to the deal, has reportedly accepted the reality of Activision Blizzard being owned by one its largest competitors. On July 16, Phil Spencer, CEO of Microsoft Gaming, tweeted that Microsoft and PlayStation had signed a binding agreement to keep Call of Duty on the PlayStation platform.

“The most likely change, if any, could be the extension of the termination date through Aug. 29,” Pachter wrote in a July 17 note. “It is also possible that the $95 per share deal price could be increased to $99 or more to account for the termination fee if the deal is terminated due to an injunction by July 18.”

Federal Court Judge Overrides FTC, Approves Microsoft’s $69 Billion Acquisition of Video Game Publisher Activision Blizzard

A federal court judge in San Francisco July 11 approved Microsoft’s $69 billion deal to purchase video game publisher Activision Blizzard. The decision circumvents efforts by the Federal Trade Commission to block the deal, citing consumer protections.

But in her ruling, U.S. District Judge Jacqueline Scott Corley dismissed those concerns as immaterial.

“For the reasons explained, the court finds the FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition,” Corley wrote in the decision. “To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content. The motion for a preliminary injunction is therefore denied.”

Corley’s decision, following a five-day trial, comes just days before a proposed July 18 termination deadline for the deal was to come due.

Michael Pachter, media analyst with Wedbush Securities in Los Angeles, said that while any emergency appeal by the FTC would likely be denied, the deal still has to be structured to satisfy the U.K. regulators concerned about Microsoft/Activision operations in the U.K., and should still close by next Tuesday.

“The FTC can sue for divestiture, but Activision shareholders will get paid [a $3 billion termination fee],” Pachter said in an email.

Analyst: U.S. Government Gave Microsoft Roadmap to Circumvent Activision Antitrust Concerns

On the heels of the Federal Trade Commission’s complaint against Microsoft’s $69 billion acquisition of video game publishing giant Activision Blizzard citing antitrust concerns, the government laid out a potential roadmap for Microsoft to appease regulators, according to Wedbush Securities analyst Michael Pachter.

The government, in its complaint, alleged Microsoft, which sells the Xbox video game console, published titles, in addition to branded online gaming platforms, could manipulate Activision’s pricing of its games across the Xbox ecosystem, degrade the quality of Activision games or player experiences offered on competitor consoles, i.e. Sony PlayStation 5, change the terms or timing of access to Activision content, and/or withhold Activision content from other consoles altogether.

Activision video game franchises include some of the biggest ever, including Call of Duty, Crash Bandicoot, Guitar Hero, Tony Hawk’s, Spyro, Skylanders, World of Warcraft, StarCraft, Diablo, Hearthstone, Heroes of the Storm, Overwatch and Candy Crush Saga.

Pachter contends that if Microsoft were to make the aforementioned changes, consumers would be indeed harmed. As a result, the analyst believes the software giant, in a binding legal obligation, could simply agree not alter the competitive landscape going forward.

“If Microsoft enters into a consent decree agreeing to address each of the FTC’s concerns, the case would be considered moot and the judge would be required to dismiss it,” Pachter wrote in a note to investors.

U.S. Government Seeks to Block Microsoft’s $69 Billion Acquisition of Video Game Giant Activision Blizzard

Consolidation within the lucrative video game industry has been put on hold.

The Federal Trade Commission Dec. 8 announced it is seeking to block technology giant Microsoft Corp. from acquiring video game developer Activision Blizzard, alleging that the $69 billion deal, Microsoft’s largest ever and the biggest in the video gaming industry, would enable the software behemoth to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.

The 3-1 vote, with Commissioner Christine S. Wilson voting against the complaint, is significant considering Xbox rival, Sony’s PlayStation 5, remains the biggest selling game console since its launch.

In a complaint, the FTC pointed to Microsoft’s record of acquiring and using gaming content to suppress competition from rival consoles, including its acquisition of ZeniMax, parent company of Bethesda Softworks (a well-known game developer). Microsoft decided to make several of Bethesda’s titles, including Starfield and Redfall, Microsoft exclusives despite assurances it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles, i.e. Sony PlayStation.

“Microsoft has already shown that it can and will withhold content from its gaming rivals,” Holly Vedova, director of the FTC’s bureau of competition, said in a statement. “Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.”

Microsoft’s Xbox Series S and Series X are one of only three types of high performance video game consoles when including Nintendo. Importantly, Microsoft also offers a video game content subscription service called Xbox Game Pass, as well as a cloud-based video game streaming service, according to the complaint.

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Activision is one of only a very small number of top video game developers in the world that create and publish high-quality video games for multiple devices, including video game consoles, PCs and mobile devices. It produces some of the most popular video game titles, including Call of DutyWorld of WarcraftDiablo and Overwatch, and has millions of monthly active users around the world, according to the FTC. Activision currently has a strategy of offering its games on many devices regardless of producer.

But that could change if the deal is allowed to proceed. With control over Activision’s blockbuster franchises, Microsoft would have both the means and motive to harm competition by manipulating Activision’s pricing, degrading Activision’s game quality or player experience on rival consoles and gaming services, changing the terms and timing of access to Activision’s content, or withholding content from competitors entirely, resulting in harm to consumers.

In a public letter to its Santa Monica, Calif.-based employees, Activision CEO Bobby Kotick said he believes the transaction first announced in January will close.

“The allegation that this deal is anti-competitive doesn’t align with the facts, and we believe we’ll win this challenge,” Kotick wrote.

In the most recent fiscal quarter, overall consumer spending on video games, hardware and accessories dipped 5% to $12.34 billion, from $12.98 billion in the previous year period.

Kotick said he believes that a combined Microsoft-Activision would be good for players, employees, competition and the industry.

“Our players want choice, and this gives them exactly that,” he wrote. “We believe these arguments will win despite a regulatory environment focused on ideology and misconceptions about the tech industry.”

Sony Expects Activision Games to Remain on PlayStation Following Microsoft Deal

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.”

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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.

Microsoft Buying Video Game Giant Activision for $69 Billion

Microsoft Jan. 18 announced plans to acquire Activision Blizzard, a leader in video game development and interactive entertainment content publishing, for $68.7 billion in cash.

Activision properties include the “Call of Duty,” “Candy Crush,” “Diablo,” “StarCraft,” “Warcraft” and “Overwatch” franchises. The acquisition aims to accelerate the growth in Microsoft’s Xbox gaming business across mobile, PC, console and cloud and will provide building blocks for the metaverse — described as a virtual-reality space in which users can interact with a computer-generated environment and other users.

With 3 billion people actively playing video games, including 200 million Americans, and fueled by a new generation of interactive features, gaming is now the largest and fastest-growing form of home entertainment.

Microsoft will acquire Activision Blizzard for $95 per share, inclusive of Activision Blizzard’s net cash. When the transaction closes, Microsoft will become the world’s third-largest gaming company by revenue, behind Tencent and Sony. The planned acquisition also includes Activision’s global eSports activities through Major League Gaming. The company has studios around the word with nearly 10,000 employees.

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Bobby Kotick will continue to serve as CEO of Activision Blizzard, and he and his team will maintain their focus on driving efforts to further strengthen the company’s culture and accelerate business growth. Once the deal closes, the Activision Blizzard business will report to Phil Spencer, CEO, Microsoft Gaming.

“Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms,” Satya Nadella, chairman/CEO of Microsoft, said in a statement. “We’re investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all.”

Inclusivity and diversity remain a hot button issue at Activision, which saw thousands of employees reportedly sign an online petition last summer seeking improvements to a company culture that reportedly bordered on operating like a frat house. Activision has denied the claims.

Mobile is the largest segment in gaming, with nearly 95% of all players globally enjoying games on mobile. Activision Blizzard´s mobile business represents a significant presence and opportunity for Microsoft in this fast-growing segment.

“Players everywhere love Activision Blizzard games, and we believe the creative teams have their best work in front of them,” said Spencer. “Together we will build a future where people can play the games they want, virtually anywhere they want.”

The acquisition also bolsters Microsoft’s Game Pass portfolio with plans to launch Activision Blizzard games into Game Pass, which has reached a new milestone of over 25 million subscribers. With Activision Blizzard’s nearly 400 million monthly active players in 190 countries and three billion-dollar franchises, this acquisition will make Game Pass one of the most compelling and diverse lineups of gaming content in the industry. Upon close, Microsoft will have 30 internal game development studios, along with additional publishing and esports production capabilities.

“The combination of Activision Blizzard’s extraordinary franchises with Microsoft’s technology, distribution, access to talent, ambitious vision and shared commitment to gaming and inclusion will help ensure our continued success in an increasingly competitive industry,” said Bobby Kotick, CEO of Activision Blizzard.

The transaction is subject to customary closing conditions and completion of regulatory review and Activision Blizzard’s shareholder approval. The deal is expected to close in fiscal-year 2023 and will be accretive to non-GAAP earnings per share upon close. The transaction has been approved by the boards of directors of both Microsoft and Activision Blizzard.

Government approval could be a sticky issue, says Michael Pachter, media analyst with Wedbush Securities in Los Angeles.

‘[The deal] has great potential to hurt PlayStation, and that is likely to be the sticking point with regulators,” Pachter said in an email.

Specifically, the analyst contends consumers could be leery buying a PS5 if they aren’t assured that future Activision games would be available on the platform.

“That is a problem, and I expect regulators to raise it,” Pachter said. “The ultimate solution is likely to issue a consent decree [merger allowed] 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.”