For months now, Microsoft has sworn up and down that it has no interest in making Call of Duty games exclusive to the Xbox if and when its proposed $69 billion Activision acquisition is approved. But as the Federal Trade Commission’s request for an injunction stopping that acquisition heads toward opening arguments this week, the federal regulator cites one piece of what it calls “powerful evidence” that it can’t trust Microsoft’s assurances. In short, as the FTC puts it, “Microsoft’s actions following its 2021 acquisition of ZeniMax speak louder than Defendants’ words.”
Longtime readers and game industry watchers may remember that before Microsoft’s ZeniMax purchase was complete, executives from both companies made vague noises suggesting future Bethesda games might not become Xbox exclusives. Once the ink was dry on the final deal, though, Microsoft quickly announced console exclusivity for some future Bethesda titles, a list that would come to include Starfield and Elder Scrolls VI.
Ahead of the Activision deal closing, Microsoft has made much stronger commitments to keep Call of Duty a multi-platform franchise. Taking Call of Duty away from PlayStation would be nonsensical, Microsoft says in a recent legal filing. The franchise is “profitable precisely because [it] generate[s] sales on many different platforms,” and the deal as structured can’t be profitable for Microsoft without those PlayStation Call of Duty revenues, the company writes. Making Call of Duty exclusive would make for “a worse game and enrage the gaming community, because much of the game’s popularity stems from the way it brings together players who use competing consoles,” Microsoft writes.
But the FTC says in a heavily redacted response filing that the risk of angering the community was also present when Microsoft made ZeniMax franchises exclusive. “Defendants put great stock in Microsoft’s concerns about ‘infuriating gamers’ if it were to foreclose rivals’ access to Activision content,” the FTC writes. “But those same concerns did not stop the ZeniMax decision.”
The FTC also points to the apology that Bethesda executive Pete Hines offered to PS5 owners regarding Starfield‘s lack of availability on the console. Despite that apology, the FTC points out that “the decision stands” regarding exclusivity.
If these arguments sound familiar, it might be because Sony offered extremely similar arguments earlier this year in explaining why it couldn’t trust Microsoft’s promises regarding continued cross-platform Call of Duty. Microsoft has a “history of non-compliance with behavioral commitments” regarding these kinds of things, Sony wrote in a filing with the UK’s Competition and Markets Authority.
This isn’t the first time the FTC has alluded to this argument, either. In its December administrative filing seeking to block the deal, the regulator cited Bethesda’s post-acquisition exclusives as part of Microsoft’s “record of acquiring and using valuable gaming content to suppress competition from rival consoles.”
The Minecraft analogy
Rather than focusing on what it calls a “strained analogy” to ZeniMax, Microsoft would prefer the court look at Microsoft’s purchase of Minecraft-maker Mojang, which has continued to publish the game on various platforms after becoming part of Microsoft. This is a better analogy for Call of Duty, Microsoft writes, because Minecraft was similarly “an existing, multi-player, cross-platform franchise like COD.”
In the FTC’s view, though, Microsoft has simply “concoct[ed] their own category of a ‘popular franchise with substantial cross-platform play’ to shoehorn Minecraft and Call of Duty together.” The FTC also throws some slight shade at the “multi-hyphenated description (‘existing, multi-player, cross-platform’) [Microsoft] need[s] to append to Call of Duty to make their point,” citing this as “the surest sign of defendants’ struggle to distinguish Activision’s content from ZeniMax’s.”
Call of Duty is unlike Minecraft, the FTC argues, in part because Minecraft is available in largely the same form on mobile phones, tablets, and the Switch. “Even if Microsoft took Minecraft off of rival consoles and subscription and cloud gaming services, it would still be available for play on many other devices. The context for Call of Duty is very different.”
Regardless, the FTC also argues that this manufactured categorization doesn’t matter because Microsoft’s exclusivity decision applied to “all future ZeniMax games.” While Microsoft said in 2021 that “some” future Bethesda games would be Xbox exclusives, no Bethesda non-exclusives have been announced since then.
In its filing, Microsoft says it “intends to operate Activision similarly to other recent acquisitions, whose studio and creative operations remained separate and continued to build games as they had done pre-acquisition.” But the FTC says those words “should give this court significant pause” if those similarities extend to Bethesda’s post-acquisition practices.
