Microsoft’s enormous $69 billion offer to acquire Activision Blizzard King is facing harsher scrutiny from regulators worldwide, mainly concerning the future of Activision’s Call of Duty franchise. Reports indicate Redmond will continue offering concessions to speed up the deal.
On Monday, sources told Reuters that Microsoft would soon offer European Union regulators more concessions to assuage concerns over its attempt to buy Activision. However, these remedies must come before the EU’s January deadline. The EU became the latest regulator to formally put the deal under the microscope earlier this month following probes from the Competition and Markets Authority (CMA) in the UK and the US Federal Trade Commission (FTC).
The process requires the EU to submit a statement of objection — a formal list of competition complaints — between now and sometime in January. Microsoft could improve the deal’s chances of closing by submitting remedies before the deadline.
Microsoft’s concessions likely concern the Call of Duty franchise, Sony’s primary excuse to stop the acquisition. Sony has repeatedly expressed fears that Microsoft would restrict Call of Duty to Xbox consoles post-acquisition. In contrast, Microsoft has continually stated that it would continue releasing entries in the series on PlayStation.
Microsoft revealed last week that it offered Sony an agreement to keep Call of Duty on PlayStation for 10 years, but Sony hasn’t publicly commented on the offer. The European Commission let slip that the military shooter series is a primary concern surrounding the acquisition, so a concrete remedy regarding Call of Duty could achieve Microsoft’s aims.
The concession wouldn’t be a sure bet, however. Sony and regulators worry Activision Blizzard’s intellectual properties like Warcraft, StarCraft, Diablo, Overwatch, and Candy Crush could give Microsoft’s Game Pass and Xbox Cloud Gaming an anti-competitive edge in the emerging cloud gaming and subscription markets. A previous agreement with Sony could keep Call of Duty off of Microsoft’s subscription services for at least a few years after the buyout. However, giving the EU remedies won’t necessarily relieve the pressure from the CMA and FTC.
Last week, Politico reported that the FTC might launch an antitrust lawsuit against the deal. The commission has already completed depositions of Microsoft chief executive Satya Nadella and Activision head Bobby Kotick, but it hasn’t met with Microsoft or Activision lawyers. A lawsuit isn’t assured but could begin next month if the FTC follows through.