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Microsoft has seen success with Xbox Game Pass, and it has made it clear it wants to bring Activision games to the service. Regulators are now weighing how this would impact competition. Unfortunately, the footnote ends there, so there's not much in the way of detail about what these restrictions are or how long they'd remain in effect in a potential post-acquisition world. Given COD's continued non-appearance on Game Pass, you've got to imagine the restrictions are fairly significant if they're not an outright block on COD coming to the service. Epic Games CEO Tim Sweeney welcomed Microsoft’s first hints at an open app store model in 2019 ahead of a giant battle between Epic and Apple a year later that saw Fortnite disappear from iPhones.
But even if Call of Duty stays on PlayStation, Sony could still lose out on serious revenue if Microsoft offers the title on Xbox Game Pass. Microsoft previously claimed that Sony is paying for “blocking rights” to keep some games off Xbox Game Pass and now says that’s the case with Call of Duty. “The agreement between Activision Blizzard and Sony includes restrictions on the ability of Activision Blizzard to place Call of Duty titles on Game Pass for a number of years,” says Microsoft in its filings.
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Microsoft’s Activision Blizzard deal is key to the company’s mobile gaming efforts. Microsoft is quietly building a mobile Xbox store that will rely on Activision and King games. In a graph posted at Microsoft’s Activision Blizzard acquisition site, the company depicts the entire gaming market as worth $165 billion in 2020, with consoles making up $33 billion , PCs at $40 billion , and mobile gaming at $85 billion . Microsoft’s acknowledgment of a mobile gaming push comes as the company increasingly positions Xbox Cloud Gaming as an option for mobile gaming on emerging handhelds.
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Microsoft says these same principles will also apply to the future Xbox mobile store, which could be enough to lure developers onto the platform. One company that might be particularly interested is Epic Games, which has allied itself with Microsoft in the past few years in the fight against Apple’s App Store policies. Microsoft is building an Xbox mobile store to directly offer games on mobile devices, challenging Apple and Google. The software giant first hinted at a “next-generation” store it would “build for games” earlier this year but has now quietly revealed details of the plans in filings with the UK’s Competition and Markets Authority . The irony of Sony making deals like this one while fretting about COD's future on PlayStation probably isn't lost on Microsoft's lawyers, which is no doubt part of why they brought it up to the CMA. News Corp is a global, diversified media and information services company focused on creating and distributing authoritative and engaging content and other products and services.
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Microsoft was quick to support Xbox Cloud Gaming on Valve’s Steam Deck, followed by a partnership with Logitech and Razer for their cloud gaming-focused handhelds. That means a push into mobile gaming could happen on multiple fronts — not just on phones and tablets. However, a big potential stumbling block for Microsoft’s mobile gaming ambitions could be its control of Call of Duty on both mobile and console.
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Epic has been arguing that Apple should allow third-party payment systems in its App Store or even allow rival app stores to function on iPhones and iPads. The CMA and other regulators now have the unenviable task of untangling these arguments between Sony and Microsoft and figuring out exactly how this deal could harm consumers or competition. Microsoft still hopes to close this deal out by spring 2023, but there’s a good chance we have months of battles ahead — as well as the opportunity to gain rare insights, as with these mobile plans, into the secret ambitions of the gaming industry.
Xbox Game Pass is also at the heart of the ongoing battles between Microsoft and Sony over Call of Duty. Sony is arguing that Microsoft could take Call of Duty away from PlayStation entirely, while Microsoft says that wouldn’t make business sense. This disagreement has spilled out into a public war of words between Sony’s PlayStation chief and Microsoft’s head of Xbox, but the real conflict is happening behind closed doors. FOX FILES combines in-depth news reporting from a variety of Fox News on-air talent. The program will feature the breadth, power and journalism of rotating Fox News anchors, reporters and producers.
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