Microsoft Agrees to Keep Activision ‘Call of Duty’ On PlayStation

Microsoft  (MSFT) – Get Free Report shares bumped higher Monday after the tech giant said it reached a binding agreement with Sony Group to keep ‘Call of Duty’ video game franchise on the PlayStation platform.

The deal, which followed a series of court victories for Microsoft against the U.S. Federal Trade Commission in its takeover pursuit of ‘Call of Duty’ maker Activision Blizzard  (ATVI) – Get Free Report, will keep the popular game on PlayStation for at least 10 years and potentially address any residual concerns from competition authorities in the United Kingdom, which have yet to sign-off on the $69 billion deal.

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“Even after we cross the finish line for this deal’s approval, we will remain focused on ensuring that Call of Duty remains available on more platforms and for more consumers than ever before,” said Microsoft president Brad Smith.

Microsoft shares were marked 0.28% higher in pre-market trading to indicate an opening bell price of $346.22 each. Activision Blizzard shares leapt 4.23% to $93.88 each. 

Britain’s Competition and Markets Authority (CMA) said Friday it will extend the final deadline to decide the fate of the Activision deal to August 29 after receiving what it called a “detailed and complex” proposal from Microsoft. 

The CMA had blocked the deal in late April, saying a Microsoft takeover of Activision would “alter the future of the fast-growing cloud gaming market” and stunt innovation and limit choice for gamers over the coming years. The watchdog added the Microsoft’s proposed remedies would require enhanced overnight.

The CMA’s decision to extend its decision followed a ruling from U.S. District Judge Jacqueline Scott Corley last Tuesday which deemed the Federal Trade Commission was unable to show that its objections to the deal, which was unveiled in early 2021, would succeed at trial.

The FTC, citing Microsoft’s 2021 takeover of ZeniMax Media, the parent of game developer Bethesda Softworks, had argued that the takeover would “harm competition in high-performance gaming consoles” by denying or degrading access to its gaming content by rival console makers.

Microsoft won approval from the European Commission, the region’s executive, for the Activision takeover in May when competition chief Margrethe Vestager deemed the tech giant’s plans to allow games such as ‘Call of Duty’ to remain on rival platforms “pro competitive”.

The all-cash offer, which values Activision at $95 a share, gives Microsoft access to 30 internal game development studios, as well as e-sports publishing capabilities, while helping build out its XBox console offerings. The deal is set to close later this year.

Activision CEO Bobby Kotick said the decision would pave the way for his company’s takeover by Microsoft, adding that the deal would “benefit consumers and workers.”

“It will enable competition rather than allow entrenched market leaders to continue to dominate our rapidly growing industry,” Kotick said. 

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