Microsoft pitches 10-year licensing deal to Sony to appease regulators

Reuters reports that Microsoft has offered Sony a 10-year licensing deal for Call of Duty. The deal is being pitched by the Xbox maker in an effort to appease European antitrust regulators, who've previously listed the shooter franchise as a point of concern about Microsoft acquiring Activision Blizzard. 

The European Commission announced its investigation into the acquisition at the start of November, and has a deadline of January 2023 to release a statement of objection before its ultimate ruling in April 2023. Addressing the European Commission's concerns before that objection releases could help make the acquisition process easier.

Licensing out Call of Duty for a decade to Sony serves as a long-term show of good faith and lets the PlayStation creator continue earning third-party revenue from the franchise well into the lifecycle of the PlayStation 5 and its eventual console successor.

Much of Sony's pushback around Microsoft buying Activision Blizzard has largely centered around Call of Duty. Last week, it would "lose significant revenues" should the franchise be locked to Xbox, and also argued that trying to create its own equivalent would be effectively impossible.

Law firm partner Stephane Dionnet told Reuters that Microsoft may be able to use the licensing deal to secure the Commission's approval for the acquisition, and "subsequently be used by the parties before other antitrust agencies."

Even if the licensing agreement between Microsoft and Sony satisfies the EU, Dionnet also acknowledged the strategy may not be a complete solution. "It remains to be seen whether the active complainants will validate such concessions," he said, "and if behavioral remedies will also be accepted by the CMA and FTC."

It's also worth noting that Reuters' report only mentioned Call of Duty, so it's unclear how fellow Activision Blizzard cross-platform franchises Overwatch and Diablo would be affected down the line.

Last week, it was reported that the FTC was in the process of challenging Microsoft's acquisition. Activision Blizzard later told Game Developer that it was "committed to continuing to work cooperatively with regulators around the globe to allow the transaction to proceed, but won’t hesitate to fight to defend the transaction if required."

Though Sony declined to provide a comment to Reuters, a Microsoft representative said it was "committed to making the same game available on the same day on both Xbox and PlayStation. We want people to have more access to games, not less."