Is Sony Going Already Defeated in the $69 Billion Microsoft X Activision Deal?
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Microsoft vs the FTC case is uncovering many secrets of the gaming industry. The case began when FTC issued an anti-trust restraining order on the deal between Microsoft and Activision Blizzard. The FTC is arguing that the Xbox makers will take titles of Activision like Call of Duty and turn them exclusively to their platform. Furthermore, this case has also dragged Xbox’s rival company Sony’s PlayStation into the mix too.
And judging from the way the court proceedings are going, both rival companies would be needing each other. The beneficial way for both these gaming giants would be to find some common ground after the case.
Microsoft and Sony need each other for Call of Duty’s user base
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During the proceedings of the case earlier, a shocking fact had come to light. Xbox makers revealed they had offered Sony first a three-year, then a ten-year deal on Call of Duty. Surprisingly, Sony declined both of those deals. Although the details of both those cases are unknown, the results of the case might change the viewpoint of both parties.
Sony will miss out on hundreds of millions of dollars in annual revenue if chooses not to sign a deal (maybe not "the" deal, but "a" deal) with Microsoft.
Apart from revenues, Sony will also miss out on strong engagement that Call of Duty brings on an annual basis.
— Derek Strickland (@DeekeTweak) June 25, 2023
Industry insider Derek Strickland believes Sony will keep resisting up until the last minute. He further believes Sony will ultimately sign the deal as both parties need each other. Strickland tweeted, “Sony will miss out on hundreds of millions of dollars in annual revenue if chooses not to sign a deal with Microsoft.” He also added Microsoft will be re-iterating the terms of the deal to make it more lucrative for Sony, given their current position in the market.
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The Xbox department is under pressure from higher-ups to deliver growth as currently it is lagging behind its rivals. The deal with PlayStation over Call of Duty will be helpful in turning the tides for Xbox. Furthermore, if Microsoft is able to acquire Activision Blizzard, it will definitely have more leverage going into the deal with Sony over COD.
On the flip side, the realities of the Xbox business have been made clear. Xbox exists as its own CSA (Customer Service Area) within Microsoft. It's a separate business with its own profit & loss margins.
The state of the Xbox business is constantly being evaluated by execs.
— Derek Strickland (@DeekeTweak) June 25, 2023
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However, this all depends on the results of the FTC vs Microsoft case. But one thing is for sure, Call of Duty will be at the epicenter of the results of the case. What are your thoughts on Sony possibly signing a deal for Call of Duty with Microsoft after the case? Let us know in the comments section below.
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Written by:
Edited by:
Akash Pandhare
