#144: Pistols at dawn

The public war of words between Xbox and PlayStation suggests an uncertain future for Acquisition Blizzard.

Jim Ryan is furious.

He has just picked up his ghillie suit from the tailor — it needed a little room in the waist and thigh, we’re not judging, the pandemic did a number on us all — and has finished stripping, oiling and reassembling a red-dot FAMAS and a sidearm. They are not real, just replicas, but Ryan has always found it helpful to get into character, particularly when temperatures are running high. (On advice from his tailor, he is yet to play Miles Morales. Too much spandex.) He takes his seat in his gaming chair, a custom effort with BIG JIM stitched along the headrest. He logs in to his PlayStation 5 and opens a message window, ready to contact his nemesis. How dare he call himself XboxP3 on a PlayStation! The arrogance of the man. He will soon be put in his place. He cracks his knuckles, sends the invite, taps out the message.

1v1 me bro.

He hits send, leans back in his chair and waits. He is not going down without a fight.

I have to admit I did not foresee Microsoft’s acquisition of Activision Blizzard getting quite this messy, and certainly not so publicly. I suppose, in hindsight, I should have seen it coming. Rather than focus on the optics of the deal — in how it made Microsoft look to buy a company whose reputation was in the gutter after an industry-shaking misconduct scandal — I should have paid a little more attention to the logistics. Call Of Duty may not be quite the colossus it once was, but it remains one of the most popular games on the planet. It now seems that, if this deal is to collapse, COD will be the game that brings it down; and that if the acquisition should go through, it will likely involve some kind of compromise that keeps it multiplatform indefinitely.

To recap, for those at the back: late last week The Verge brought word that Xbox boss Phil Spencer had written to his PlayStation equivalent, the all-ghillied-up Jim Ryan, to assure him that Microsoft was committed to keeping Call Of Duty on PlayStation for “several more years.” In a follow-up statement to the website, Spencer expanded on that a little:

“In January, we provided a signed agreement to Sony to guarantee Call Of Duty on PlayStation, with feature and content parity, for at least several more years beyond the current Sony contract, an offer that goes well beyond typical gaming industry agreements.”

It is not known how long the current deal runs for, though a Bloomberg report from earlier this year claimed it covered “at least the next two years.” This vagueness is unhelpful not only for consumers, but also the various worldwide antitrust regulators who are scrutinising the acquisition (including, as recently confirmed, the UK’s Competition and Markets Authority). Sure, it’s in keeping with Microsoft’s mealy mouthed phrasing of how it intended to approach exclusivity after it bought Bethesda. But we all know how that turned out, and either way it’s becoming increasingly clear that the Activision deal is different. Microsoft is surely going to have to be more specific if it wants the buyout to go through. Even our sorry excuse for a government tends to trade in less vague language than this. “At least several more years.” Come on.

Except Spencer already has been more specific, as Jim Ryan revealed in a brief statement to GI.biz on Wednesday. “I hadn’t intended to comment on what I understood to be a private business discussion,” he thundered, “but I feel the need to set the record straight because Phil Spencer brought this into the public forum.” The sass on that. You almost have to respect it.

“Microsoft has only offered for Call Of Duty to remain on PlayStation for three years after the current agreement between Activision and Sony ends,” he continued. “After almost 20 years of Call Of Duty on PlayStation, their proposal was inadequate on many levels and failed to take account of the impact on our gamers. We want to guarantee PlayStation gamers continue to have the highest quality Call Of Duty experience, and Microsoft’s proposal undermines this principle."

This is quite smart framing from Ryan, if a little underhand. Spencer didn’t bring anything into “the public forum”. The Verge did, and once it was out there I’m not sure the Xbox bossman had much of a choice but to offer (a little) official clarity. Big Jim knows this, obviously, and is using it as an opportunity to cast Sony as the little guy in this dispute — which, of course, it is, ludicrous though that sounds for a global, market-leading company. But it makes sense for Sony to point this out as often as possible as the deal moves towards completion or, ideally from Jim and co’s perspective, towards collapse.

The day the Activision deal was announced I said I expected Call Of Duty to stay multiplatform for a while, as it seemed the most likely stumbling block from a regulatory point of view. Events since may have proven me right, but I am no longer sure that will be enough. Ryan certainly appears to be gunning (relax, they’re only replicas) for a more permanent arrangement, perhaps emboldened by the UK CMA confirming a ‘Phase 2’ investigation of the deal, which only happens when the authority sees sufficient cause for concern that a merger or acquisition will harm competition. While the notion of Plague Island preventing one US company from acquiring another may seem outlandish, there is some pretty relevant recent precedent. Last year the CMA conducted a similar second-stage investigation of Meta’s acquisition of Giphy, found it to be anticompetitive, and ordered Zuck to sell it off. Meta is unable to fully integrate Giphy into Facebook until the case has worked its way through the appeals courts (the first appeal only found partially in Meta’s favour).

Sure, it’s faintly ridiculous to hear a PlayStation executive complaining about exclusivity. And it’s definitely hilarious, if a little unedifying, to see two platform-holder execs going at it hammer and tongs through the tech press. But let us for once learn our lesson, and overlook the optics of the situation, fascinating though they may be. In 2020 Sony was Activision’s best customer, accounting for 17% of its total sales; Microsoft languished in fourth, behind Apple and Google. That is millions of games sold on Sony consoles, and therefore millions of people who stand to lose out whenever Microsoft yanks COD off PlayStation forever. I find it hard, all of a sudden, not to find myself rooting for Big Jim.

There you go! Still shaking off the post-holiday rust, so forgive me any typos, factual inaccuracies, or legal slanders. Ahem. Have a grand weekend, kindly do the things with the buttons below, and I’ll see you all next week.