Microsoft Offer to Sony for Call of Duty Includes Subscription Service; US, UK, EU Worried

In a bid to win regulatory approval for its $69 billion purchase of Activision Blizzard Inc., Microsoft Corp. has offered rival Sony Group Corp. the right to sell Activision blockbuster Call of Duty as part of its gaming subscription service.

Microsoft has publicly stated that it offered Sony a 10-year deal to make Call of Duty available on the Japanese company’s PlayStation console. The proposal, which Sony hasn’t accepted, also includes rights to sell the title on the PlayStation Plus service, which gives gamers access to a catalog of games for a monthly fee, according to a person familiar with the negotiations who declined to be identified because the talks are confidential.

Microsoft’s Xbox Game Pass is the leader in the video game and cloud gaming subscription market and is a top concern of regulators in the US, UK and European Union. Last week, the US Federal Trade Commission said it’s seeking to block the merger on grounds that it would “enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.”

Cloud gaming, which Microsoft sells as part of the highest tier of Game Pass, is still in its infancy. But some expect the technology, which allows subscribers to stream certain games onto any device, even tablets and phones, could eventually make consoles less relevant. Subscriptions offer gamers access to a wealth of games for a low price of about $10 to $15 a month, compared with single game titles that cost about $70 each. Sony didn’t immediately reply to a request for comment. Microsoft declined to comment on the specific terms of its offer to Sony.

Sony has been a staunch opponent to Microsoft’s bid for Activision, accusing the company of seeking to “lock in many consumers to Xbox” and leveraging its other products to “foreclose cloud gaming at a critical point of its evolution.” Analysts question whether Sony’s criticisms come from insecurity that the Japanese tech company lags behind Microsoft in diversifying away from console gaming. Sony typically releases its best first-party games onto PlayStation long before they appear anywhere else.

Game Pass, which launched in 2017, has grown quickly and now has more than 25 million subscribers, far more than Sony’s similar offering. Microsoft added cloud gaming to Game Pass in 2020 and, according to the FTC, more than 20 million gamers have streamed games from the cloud with the service. Microsoft has said that cloud gaming subscription services are essential to reach its goal of expanding to 3 billion gamers worldwide, and its vision of enabling gamers to play games across Windows, Xbox and smartphones.

Microsoft last week struck a 10-year deal for Call of Duty with Nintendo Co. Microsoft declined to say whether that agreement also included subscription service rights.