{"id":167405,"date":"2022-12-24T21:59:13","date_gmt":"2022-12-24T21:59:13","guid":{"rendered":"https:\/\/harchi90.com\/why-call-of-duty-game-matters-to-the-ftc-in-microsoft-activision-deal\/"},"modified":"2022-12-24T21:59:13","modified_gmt":"2022-12-24T21:59:13","slug":"why-call-of-duty-game-matters-to-the-ftc-in-microsoft-activision-deal","status":"publish","type":"post","link":"https:\/\/harchi90.com\/why-call-of-duty-game-matters-to-the-ftc-in-microsoft-activision-deal\/","title":{"rendered":"Why Call of Duty game matters to the FTC in Microsoft-Activision deal"},"content":{"rendered":"
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Vancouver, Washington, resident Michael Feist has logged nearly 163 hours on Call of Duty: Modern Warfare II since it was released two months ago. <\/p>\n

That’s nearly a week spent at virtual war on his Xbox Series X, and exactly the kind of commitment Xbox-maker Microsoft is investing in by acquiring gamemaker Activision Blizzard for $69 billion. The 27-year-old and his brothers took days off work to play when it came out.<\/p>\n

Call of Duty, one of the most successful video game franchises ever, has been in Feist’s life ever since he was a child. He used to wait in line at GameStop for the latest Call of Duty release with his stepdad.<\/p>\n

They weren’t the only ones \u2014 the 19-year-old military-themed franchise has generated over $30 billion in revenue, with 425 million units sold. <\/p>\n

Now, Call of Duty is at the center of a legal battle surrounding Microsoft’s largest-ever acquisition, the purchase of Call of Duty owner Activision Blizzard. The company approved Microsoft’s nearly $69 billion acquisition bid in April. In the months since, regulators in the US have assailed the deal as anticompetitive and moved to block it. It is undergoing regulatory scrutiny in the UK and European Union.<\/p>\n

The deal would be among the 30 largest acquisitions in history. It dwarfs Amazon’s $8.5 billion acquisition of MGM earlier this year and Microsoft’s largest successful acquisition so far, the 2016 purchase of professional network platform LinkedIn for $26.2 billion.<\/p>\n

Microsoft competes with Sony and Nintendo in the video game world, but remains in last place, according to Microsoft. With the acquisition, the Redmond-based tech giant wants to become more competitive in the industry.<\/p>\n

\u201cIts vision for the transaction is simple: Xbox wants to grow its presence in mobile gaming, and three-quarters of Activision’s gamers and more than a third of its revenues come from mobile offerings,\u201d according to Microsoft.<\/p>\n

The Activision acquisition didn’t sit well with the Federal Trade Commission, the newly emboldened federal agency tasked with stopping monopolies from forming. Microsoft’s promises to make key games such as Call of Duty available on more platforms haven’t swayed the FTC. Commissioners argued the acquisition is anticompetitive in a complaint filed earlier this month.<\/p>\n

\u201cWith control of Activision’s content, Microsoft would have the ability and increased incentive to withhold or gradient Activision’s content in ways that substantially lessen competition \u2014 including competition on product quality, price and innovation,\u201d the complaint says.<\/p>\n

Microsoft contests the claim that the deal would give it any sort of monopoly. Xbox and Activision, the company said Friday in a response to the FTC argument, \u201care just two of hundreds of game publishers, who compete by providing different types of games on different platforms at different prices, ranging all the way down to $0.\u201d<\/p>\n

A key to the legal fight? Call of Duty.<\/p>\n

\u201cThe FTC’s case is all about \u2026 one game, Call of Duty,\u201d Microsoft President Brad Smith said during the company’s annual shareholder meeting in December.<\/p>\n

Activision has released a new Call of Duty installment every year since 2003, when the shooting game debuted. This year’s Modern Warfare II generated $1 billion in sales in the first 10 days following its Oct. 28 release, despite the $70 price tag.<\/p>\n

Modern Warfare II includes a story mode, a cooperative mode and a multiplayer platform offering players a soldier’s-eye view of battles historical and imagined. Call of Duty game developers have consulted with Pentagon advisers on the battle mechanics to make them as lifelike as possible. The franchise’s biggest draw is the multiplayer mode, which allows teams of gamers to square off against each other, sometimes in championships.<\/p>\n

Call of Duty has been the bestselling game of its release month for a record 14 consecutive years, said Mat Piscatella, a video game industry adviser with research company The NPD Group.<\/p>\n

\u201cIt doesn’t get much bigger than Call of Duty,\u201d Piscatella said.<\/p>\n

Platforms such as Xbox and Sony’s PlayStation get revenue from Call of Duty in two ways: game sales and in-game transactions. Players can buy special weapons and gun \u201cskins,\u201d making it a long-term revenue source for platforms, said Joshua Foust, who has written about the video game industry and consumer identities.<\/p>\n

Sony is worried about losing this long-term revenue source if Call of Duty is no longer on PlayStation, the world’s most popular gaming console, Foust said. Sony claims Microsoft will end PlayStation’s access to the game if the acquisition goes through. Sony members did not respond to inquiries.<\/p>\n

Microsoft, Sony and Nintendo sometimes lock popular games down in exclusive contracts, in the hope that gamers particularly interested in, for example, Mario Bros. or The Last of Us will buy their system and not a competitor’s for access to the titles. Sony has 286 exclusive games, while Xbox has 59, Smith said. <\/p>\n

The FTC is concerned Microsoft plans to withhold Activision titles, including Call of Duty, from Sony and other competitors.<\/p>\n

In the response to the FTC filed Friday, Microsoft argues it is not financially viable to remove Call of Duty from PlayStation.<\/p>\n

\u201cPaying $68.7 billion for Activision makes no financial sense if that revenue stream goes away,\u201d Microsoft attorney said in the response. \u201cNor would it make sense to degrade the game experience and alienate the millions of Call of Duty players who play together using different types of consoles.\u201d<\/p>\n

Microsoft further argued that Xbox and Activision \u201care just two of hundreds of game publishers, who compete by providing different types of games on different platforms at different prices, ranging all the way down to $0.\u201d<\/p>\n

Feist has a YouTube channel and Twitter account where he talks about Xbox releases and news using the name XBOXOBI. He said in an interview the deal is protecting the competitor more than the consumer. Sony argues Microsoft could change console and game prices at will without fear of losing market share or consumers, which Sony, as the market leader, already does, Feist said.<\/p>\n

He also said PlayStation has exclusive Call of Duty in-game deals and content that Xbox doesn’t. Microsoft’s acquisition would create \u201cconsole parity,\u201d Feist said.<\/p>\n

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