Microsoft is in the process of acquiring "Call of Duty" publisher Activision for $68.7 billion.- The deal must be approved by regulators, and Microsoft is trying to get ahead of some big questions.
Microsoft made a huge announcement in mid January: It plans to buy "Call of Duty" and "Diablo" publisher Activision for an estimated $68.7 billion in an all-cash deal.
It's Microsoft's largest-ever acquisition and the largest acquisition of a video-game company in history.
But before Microsoft is able to absorb Activision into its already large portfolio of video game studios, the deal must pass regulatory muster with the Federal Trade Commission and the US Department of Justice. That process could take anywhere from 12 to 18 months, Microsoft said.
In the meantime, it's trying to get out ahead of one of the biggest questions regulators might have: Whether or not it will make Activision's major games exclusive to the
"Microsoft will continue to make Call of Duty and other popular Activision Blizzard titles available on PlayStation through the term of any existing agreement with Activision," Microsoft president Brad Smith wrote in a blog post published on Wednesday. "And we have committed to Sony that we will also make them available on PlayStation beyond the existing agreement."
Other Microsoft leaders, including Xbox head Phil Spencer, have said as much previously.
"Had good calls this week with leaders at Sony," Spencer said two days after the acquisition was announced. "I confirmed our intent to honor all existing agreements upon acquisition of Activision Blizzard and our desire to keep 'Call of Duty' on PlayStation. Sony is an important part of our industry, and we value our relationship."
But these messages, while confirmation that future "Call of Duty" games will come to PlayStation, are missing critical context: Every upcoming "Call of Duty" game will come to Xbox's Netflix-like video game subscription service, Xbox Game Pass, at launch.
"Upon close, we will offer as many Activision Blizzard games as we can within Xbox Game Pass and PC Game Pass, both new titles and games from Activision Blizzard's incredible catalog," Spencer said in a blog post published the same day the acquisition was announced.
Instead of putting the games exclusively on Xbox consoles, Microsoft is putting those games on Xbox Game Pass at launch — you could pay $60 or more for the game on PlayStation, or you could pay $10 for a month of Game Pass on Xbox. And Microsoft is logically betting you'll choose the latter.
Xbox Game Pass is already a behemoth, earning Microsoft billions in revenue every year: It has over 25 million monthly subscribers as of mid-January, up 7 million from the year prior.
With a minimum subscription price of $10 per month, Microsoft is pulling in roughly $250 million every month from its video game subscription service.
Xbox Game Pass subscriptions are positioned to make approximately $4 billion between now and January 2023, which could help to explain why Microsoft was willing to shell out tens of billions of dollars on major game publishers like Zenimax Media and Activision.
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