Call of Duty is one of the most profitable franchises in gaming. It's been that way for decades. And, while Activision Blizzard is on Microsoft's side right now as part of the ongoing $70 billion acquisition, there was a time when the two weren't quite on good terms.
Apparently, because of how much fewer Call of Duty players are on Xbox, Activision Blizzard had threatened Microsoft that it wouldn't put its Call of Duty games on the Xbox Series S/X if it didn't agree on a revised revenue cut.
This surprising revelation emerged as part of the ongoing trial between Microsoft and the US Federal Trade Commission, as transcribed by TweakTown.
According to Xbox's corporate vice president, Sarah Bond, Bobby Kotick, Activision's CEO, once played a high-stakes game of chicken with Microsoft ahead of the Xbox Series X/S launch a few years ago. Apparently, Kotick demanded a better cut from the traditional 70-30 revenue split model between platform holders and publishers, threatening to withhold Call of Duty from the new Xbox consoles.
Microsoft, fearing a PlayStation 5 exclusive release of the popular franchise, buckled under the pressure. The details of this deal were inadvertently revealed during FTC's questioning, suggesting an 80-20 revenue split in Activision's favor.
In an industry dominated by exclusive content and competitive differentiation, the mere thought of a PS5-exclusive Call of Duty entry (or entries, for that matter), would have been a hard pill to swallow for Microsoft. "It was clear that Call of Duty would be on PS5 and that would not have been good if it was not also on Xbox if it was launching at the same time," Bond explained.
Simultaneously, Sony Interactive Entertainment's (SIE) boss, Jim Ryan, voiced his concern about the potential implications of Activision's acquisition by Microsoft. Sony's fruitful collaboration with Activision, which has led to better features on PlayStation consoles, would inevitably suffer.
The Activision-Blizzard and Microsoft deal has triggered shockwaves beyond the confines of Call of Duty. In a revealing turn of events, Bethesda's publishing boss, Pete Hines, told the court that the plans for a PS5 version of the in-development Indiana Jones game were scrapped after Microsoft acquired the company.
Microsoft's bid to acquire Activision Blizzard isn't just about its portfolio but it's part of its bid to become the Netflix of the video game industry after admitting that it has lost the console wars. While the FTC trial and Microsoft's admission that it gave in to Activision's demands might paint a grim picture, it reflects the drastic measures companies undertake to ensure a level playing field.
Amidst the courtroom drama and high-stakes negotiation, the true beneficiaries (or casualties) are the consumers. Deals like this can secure the presence of their favorite franchises on their chosen platforms and affect the pricing and availability of these games.
The coming days of the trial are expected to bring more revelations from industry heavyweights, including Xbox boss Phil Spencer, Sony's PlayStation head Jim Ryan, and Activision's Bobby Kotick, among others. However, the outcome and its potential impact on the industry's future remains shrouded in uncertainty.
For now, Call of Duty continues to be a pivotal piece in the grand chessboard of gaming, the moves dictated by the three corporate giants locked in an epic duel. The final outcome of this saga will determine not just the fate of Call of Duty, but potentially the trajectory of the gaming industry as a whole.
As the court battle continues, the gaming world watches, controller in hand, ready for the next skirmish.