Published -July 17th, 2023 @ 9:50 AM (GMT+2)

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The digital gaming landscape witnessed a monumental agreement with Sony signing a 10-year deal for the Call of Duty franchise with Microsoft (NASDAQ:MSFT) post the proposed acquisition of Activision Blizzard. The high-stakes contract ensures that the coveted game will remain on PlayStation, settling a year-long dispute that was carried out both behind the scenes and in public.

The wrangling between the tech giants commenced in January 2022 when Microsoft announced its intent to acquire Activision Blizzard. Kari Perez, the head of global communications at Xbox, confirmed that the agreement, although similar to a 10-year contract between Microsoft and Nintendo, is strictly limited to the Call of Duty franchise.

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Fears of Microsoft's Potential Monopoly
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Interestingly, Sony had initially resisted signing the deal when Microsoft first proposed a 10-year contract in December 2022. Sony's apprehensions stemmed from concerns that Microsoft could monopolize Call of Duty exclusively for Xbox or undermine the PlayStation versions.

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These fears were assuaged during the FTC v. Microsoft hearing when an email from PlayStation chief Ryan was read out, revealing his confidence that Call of Duty would continue to feature on PlayStation for the foreseeable future. Microsoft's legal team further reinforced this assurance, arguing that Ryan had spoken to Xbox chief Phil Spencer to confirm the future of Call of Duty in January 2022.
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The Future of Activision's Content on PlayStation
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The agreement culminated 18 months of back-and-forth discussions and negotiations over Activision's content on PlayStation. The battle between the two companies was with tension and breakdown in communications. However, despite these bumps, Microsoft consistently maintained its stance of keeping Call of Duty on PlayStation, arguing that financial pragmatism did not warrant pulling the game from Sony's consoles.

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Simultaneously, there were mounting concerns over the fate of Microsoft's Activision Blizzard deal when PlayStation chief Jim Ryan confronted Activision CEO Bobby Kotick. During a meeting with EU regulators, Ryan expressed his vehement opposition to a new Call of Duty deal and his intentions to halt the merger.

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A Potential New Merger Investigation
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This high-stakes corporate saga has drawn international attention to the regulatory situation in the UK. This comes after Microsoft's proposed deal was blocked there earlier this year. The Competition and Markets Authority (CMA) and Microsoft agreed earlier this week to suspend their legal disputes to negotiate modifications to the transaction. However, the CMA warned that Microsoft's propositions might instigate a fresh merger investigation.

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A Potential New Merger Investigation
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In light of these developments, the CMA extended its investigation into the deal, pushing the date for a final order from July 18th to August 29th. Microsoft aims to seal its Activision deal by the original July 18th deadline. Still, given the ongoing negotiations, the finalization may experience a minor delay, pending the resolution of the situation in the UK.

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This dispute resolution between Sony and Microsoft illustrates the dynamic interplay of business strategy, negotiation, and legal frameworks in shaping the future of the global gaming industry. The outcome of the 10-year agreement will likely shape these tech behemoths' trajectory in the coming years.

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For more information regarding Microsoft's $69B Activision Acquisition, Read more

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