Sony has outlined Call of Duty’s vital importance to PlayStation as part of its ongoing efforts to derail Microsoft’s $68.7bn Activision Blizzard buyout bid.
“SIE [Sony Interactive Entertainment] cannot protect against the loss of Call of Duty,” Sony wrote in a document published today by the UK’s Competition and Markets Authority regulator, which is currently scrutinising the deal.
Simply put, Sony says it cannot compete with a Microsoft-owned and Xbox-exclusive Call of Duty via its own blockbuster first-party franchises: not in terms of gameplay hours, revenue, or in the budget it has to spend on building its own exclusives.
“SIE’s recent development experience of shooter/battle royale games is limited and its main active shooter franchise is significantly less impactful than Call of Duty,” Sony wrote. “Destiny, SIE’s main active first-person shooter franchise, had only [redacted percentage] of the gameplay hours and [redacted percentage] of the game spend of Call of Duty in 2021.”
Sony’s response is one of several published today by the CMA as part of its ongoing process to evaluate Microsoft’s Activision Blizzard deal.
Microsoft has its own response, which largely seeks to contradict and (in its view) correct the CMA’s provisional findings that concluded with the suggestion Microsoft may need to structurally change the deal in order to get it approved.
As expected, Microsoft repeats the statement that it will not seek to hinder or withold access to Call of Duty on PlayStation in any way.
“Sony’s position must be seen for what it is: a self-serving attempt to protect its dominant market position, rather than one founded on genuine concerns regarding its continued access to COD – which it could have secured months ago,” Microsoft wrote.
Sony’s response, meanwhile, seeks to largely reinforce what the CMA has said already, including the regulator’s earlier finding that there were “few franchises as enduring and as significant in terms of PlayStation’s revenue and gameplay time” as Call of Duty, and that any attempt to create a fresh rival would have “a low chance of success”.
Going into more detail on this today, Sony stated its own development costs were “small in comparison to Call of Duty”. Even God of War: Ragnarök, which Sony describes as its “biggest
ever first-party title” could not compare.
Ragnarök’s development budget has been sadly redacted from the public version of Sony’s filing, though it appears to be listed in the three-figure millions – and likely fairly low, since Sony makes the point of saying this was achieved with an annual investment (also redacted, but which looks to be in the two-digit millions) over a number of years.
“More generally,” Sony concluded, “across [PlayStation’s] nine most recently released and upcoming first-party titles (which have either sold or are expected to sell more than [redacted, single-digit million figure] copies in aggregate) the average annual development cost was around [redacted, two-digit million figure]. By contrast, Activision has reportedly spent around $300m on each annual release of Call of Duty.”
Today’s release of responses by the CMA includes replies from six other companies in the games industry – all of those in favour of Microsoft’s deal. The identities of these companies have been kept publicly anonymous, save for that of 4J Studios – the Scottish team which worked with Microsoft to release console versions of Minecraft.
The CMA is one of three major regulatory bodies currently standing in the way of Microsoft’s Activision Blizzard deal being approved, alongside the US Federal Trade Commission and the European Commission.
A final decision by the CMA is set to be published next month, on or before 26th April 2023.
