Activision Blizzard: Phil Spencer: Only Sony is opponent of the deal

Activision Blizzard: Phil Spencer pleased with acquisition progress

Phil Spencer talks about acquiring Activision Blizzard and Sony, the only opponent of the deal.

On Capital Forum’s Second Request Podcast, Phil Spencer spoke about the video game market and the current situation surrounding the proposed acquisition of Activision Blizzard.

Among other things, the topic was Call of Duty on the PlayStation and Sony, which spoke out against the takeover. Spencer designated Sony as the biggest opponent of the dealwhich would defend their dominance of the console market and could probably only grow by making the Xbox smaller.

“There’s really only one major opponent of the deal and that’s Sony, and Sony is trying to protect its dominance on consoles. And the way they’re growing is that they’re making the Xbox smaller. They have a completely different view of the industry than we do. They don’t bring their games to the PC day and night. They don’t include their games in the subscription when they launch them. They are starting to think about mobile devices as I see it from the outside just reading some of their steps. But because Sony is doing all the dialogue about why this deal shouldn’t go through in order to protect its dominant position and console, what they’re clinging to is Call of Duty. And we’ve said again and again that we’re going to commit to PlayStation for several years, 10 years. That was the first decision Satya and I made: to release Call of Duty on PlayStation.”

As Spencer goes on to say, there’s no point in separating Call of Duty from PlayStation because it would devalue the Activision Blizzard King company and write off billions.

“Satya and I, Satya Nadella, CEO of Microsoft. We called Sony’s CEO the day the deal was announced to tell him that it was our intention to keep Call of Duty on PlayStation. And they publicly confirmed it at the time. Now we are, so to speak, in the role of the brakeman in the negotiations, because the whole thing has become a prime source of discussion for the regulators. Looking at the business model itself, it’s not hard to imagine how much of this company’s valuation consists of Call of Duty revenue generated on the PlayStation versus what we pay for Activision Blizzard King pay, and then immediately depreciate the asset by saying that we’re going to take the largest console version of Call of Duty out of this company’s business model. That would literally eat up billions and billions that we would have to write off almost immediately because we would be jeopardizing what Activision is.”

Spencer again mentioned the commitment to continue releasing Call of Duty on the PlayStation. And for ten years. He also finds it challenging that Sony, as the world’s largest console maker, is objecting to the deal for Call of Duty, which has been repeatedly assured will continue to be playable.

“We have made it clear to Sony that we will continue to offer Call of Duty on the PlayStation. We tried to make a 10 year commitment, same version, same features, we told regulators the same thing. I haven’t heard a customer complain about the fact that this acquisition gives the consumer more choice, or what the harm is. But the hard hit for the biggest console maker seems to be the topic regulators are spending a lot of time on. And they really are twice our size in the console market. So I find it challenging that the largest console manufacturer in the world would object to a franchise that we have said we will continue to offer on the platform. And it’s a business that empowers customers through choice and access, and Call of Duty is an important part of that. As you said, Call of Duty Mobile is a part of the Call of Duty franchise itself. How to decouple that from what’s happening on other platforms seems like a real challenge. If PlayStation players have the same great Call of Duty experience they had this year, they will have that next year and the year after that when the deal goes through.”

Another topic of conversation was the competition in the video game market. That’s how Spencer is Opinionthat games can survive in multiple business models and that there shouldn’t be just one model.

Phil Spencer said: “I don’t want one business model to dominate the games market. I think we’ve seen in certain markets that it’s been interesting to watch the music market evolve. And I want games to be viable in multiple business models. One of the reasons we originally developed Game Pass was because a lot of games, big games, are free to play because they’re at the top of the funnel and you can track someone when there’s no upfront cost. There is no friction to win a new customer, it is very attractive.”

You can listen to the podcast with Phil Spencer on the Capital Forum website.

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