Sony, Microsoft agree to 10-year deal keeping Call of Duty on PlayStation as FTC tries to block Activision Blizzard takeover
Microsoft has struck a 10-year deal with Sony to keep Call of Duty on the PlayStation platform, similar to an earlier arrangement reached with Nintendo.
Microsoft Gaming chief Phil Spencer said on Sunday the “binding agreement” would give gamers “more choice”.
Sony had earlier held out on agreeing the deal as it instead focused on preventing Microsoft’s $69 billion (£53bn) acquisition of Call of Duty developer Activision Blizzard from going ahead.
The move came after a judge last week rejected the US Federal Trade Commission’s (FTC) request for a temporary injunction blocking Microsoft and Activision Blizzard from completing the takeover by their agreed deadline of Tuesday, 18 July.
The FTC took the matter to the 9th Circuit Court of Appeals, but on Friday Microsoft argued the FTC had no grounds to request an injunction while its broader appeal is considered.
“The Court should not mistake the FTC’s litigation gamesmanship for an emergency meriting this Court’s deviation from the ordinary appellate process,” Microsoft wrote.
The regulator asked the appeals court for the injunction on Thursday after the request was rejected by Judge Jacqueline Scott Corley of the US District Court for the Northern District of California in San Francisco earlier last week.
Microsoft argued the FTC was wrong to claim errors in Corley’s ruling.
“The district court’s consideration of the FTC’s primary claim at trial shows that the court did not misapply the law,” the company wrote.
The FTC first sued to block the $69 billion (£53bn) deal last December, but filed for an emergency injunction last month ahead of an 18 July completion date agreed between the two firms.
The agency argued the deal would distort the gaming market and would harm competitors and gamers, but Corley ruled the FTC hadn’t shown its challenge was likely to prevail.
“The District Court’s ruling makes crystal clear that this acquisition is good for both competition and consumers,” said Microsoft president Brad Smith in a statement at the time.
He added that the FTC was pursuing a “what has become a demonstrably weak case”.
On Friday the CMA pushed back its deadline for coming to a decision by six weeks to 29 August, saying it needed more time to review submissions from Microsoft.
And on Monday the Competition Appeal Tribunal (CAT) in London granted the CMA and Microsoft a two-week pause in Microsoft’s appeal to the CMA’s ruling, allowing them to formally reopen negotiations.
Companies are not ordinarily allowed to offer further remedies following the CMA’s final report, making the fresh negotiations an unprecedented move.