Microsoft‘s MSFT latest offer to Sony SONY comes as it faces increased regulatory scrutiny over its $69 billion buyout deal for Activision Blizzard ATVI.
The company has offered Sony a 10-year contract to make each new Call of Duty release available on PlayStation the same day it comes to Xbox. The deal will also include streaming and subscription parity to put future Call of Duty games on the PlayStation Plus subscription service on day one, just like its Game Pass.
The offer is outlined in Microsoft’s response to the Competition and Markets Authority’s provisional findings on the deal, released last month.
This follows Sony’s disapproval over Microsoft’s earlier offer to keep the popular game series made by Activision Blizzard on PlayStation for three years after the current agreement expires.
However, Sony Interactive Entertainment (“SIE”) has raised concerns about the potential for unsustainable licensing costs that could force the company to raise prices. After the Activision deal, Microsoft will get to choose the size of licensing fees for Sony to have Call of Duty on PlayStation Plus. Sony argues that the Xbox maker could make this fee too expensive.
SIE alleges that this could result in Call of Duty becoming a Game Pass exclusive by default, dominating multi-game subscription services in the future.
Microsoft Corporation Price and Consensus
Microsoft Corporation price-consensus-chart | Microsoft Corporation Quote
Microsoft’s Deal With Other Tech Players to Convince Sony
Microsoft has been offering concessions in the form of multi-year deals involving Call of Duty to appease regulators’ concerns over its proposed Activision Blizzard acquisition.
It was reported earlier that the European Union will not be blocking this deal after the Xbox maker signed 10-year deals with Nintendo and Nvidia NVDA to bring Xbox and Activision games (including Call of Duty) on their respective services.
Last month, Microsoft and NVDA announced that the companies have agreed to a 10-year partnership to bring Xbox PC games to the NVIDIA GeForce NOW cloud gaming service, which has more than 25 million members in over 100 countries.
The agreement will enable gamers to stream Xbox PC titles from GeForce NOW to PCs, macOS, Chromebooks, smartphones and other devices. It will also enable Activision Blizzard PC titles, such as Call of Duty, to be streamed on GeForce NOW after Microsoft’s acquisition of Activision closes.
Moreover, this Zacks Rank #3 (Hold) company struck a 10-year agreement with Nintendo under which Call of Duty will be available to Nintendo players on the same day as Xbox with full feature and content parity. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Such deals have been part of Microsoft’s attempt to pressure Sony into accepting a similar offer and allay regulatory competition concerns.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report