In its latest response to the UK Competition and Markets Authority (CMA), Microsoft has argued that even if its proposed decade-long Call of Duty access agreement with Sony is not renewed, the latter will be able to develop alternatives to Activision‘s shooter IP in the deal’s 10-year duration. While the Redmond corporation believes that it will have no reason to make Call of Duty exclusive to Xbox platforms and services once the agreement is no longer in effect, it claims that there is no reason to extend the agreement further (at least for the initial proposal) in line with the CMA’s previous rulings in such cases.

• Related Reading: CMA Publishes Pro-Microsoft Responses From 6 Studios; Opposing Arguments Called “Exaggerated” & “Out of Proportion”

In the latest development in its Phase 2 review of the Microsoft-Activision deal, the CMA has published Microsoft’s supplemental response to the notice of possible remedies. The document addresses the antitrust watchdog’s concerns presented at the Remedies Hearing on February 27. The company has reiterated its intention to bring Activision Blizzard’s game franchises to additional platforms, and responded to the questions and concerns raised by the UK regulator about its proposed behavioral remedies.

In response to a question by the CMA about the sufficiency of its proposed decade-long Call of Duty access agreement with Sony, Microsoft has claimed that the latter, as “a leading publisher and console platform,” is more than able to develop an alternative franchise to Call of Duty in 10 years, making it unnecessary for the agreement proposal to be extended further:

At the Remedies Hearing the CMA asked Microsoft if the 10-year duration is sufficient and whether there would be a “cliff edge” for Sony at the end of this period. The 10- year period is []. Microsoft considers that a period of 10 years is sufficient for Sony, as a leading publisher and console platform, to develop alternatives to CoD. The 10-year term will extend into the next console generation []. Moreover, the practical effect of the remedy will go beyond the 10-year period, since games downloaded in the final year of the remedy can continue to be played for the lifetime of that console (and beyond, with backwards compatibility).

CoD is an entertainment franchise which is already nearly 20 years old. [], Microsoft will need to secure the broadest distribution of the franchise and will be heavily incentivized to keep it on the PlayStation platform []. Microsoft considers that having maintained CoD on PlayStation and grown its player base on Nintendo, GeForce Now and other cloud gaming platforms for a decade, it will have no incentive, or indeed ability, to take CoD exclusive.

Additionally, Microsoft notes that the 10-year duration it has proposed for the agreement is longer than or equal to what was accepted by the CMA in previous relevant decisions, such as Reckitt Benckiser/K-Y brand (2015) and Korean Air / Asiana Airlines (2023). As such, it believes that there is “no basis for extending the remedy” beyond the period it has proposed.

A statutory deadline of April 26, 2023 has been set for the publishing of the CMA’s final report of its Phase 2 review of the Microsoft-Activision deal. Stay tuned here at MP1st for all upcoming news and announcements concerning the acquisition.

Source: CMA