Newly revealed emails shed light on Microsoft, Sony negotiations over Activision’s PlayStation future

As part of Microsoft’s legal battle with the US antitrust agency, the Federal Trade Commission, emails between Xbox boss Phil Spencer and PlayStation chief Jim Ryan have come to light, outlining Microsoft’s initial proposal to Sony – regarding Activision Blizzard games, it would be willing to stay on the PlayStation platform should its Acquisition of $69 billion be approved – and Ryan’s lengthy counter-proposal.

As confirmed by Phil Spencer Last September, Microsoft contacted Sony shortly after the January announcement of its proposed acquisition of Activision Blizzard, providing a signed agreement to Sony guaranteeing that Call of Duty would remain on PlayStation – with feature and game parity. content – for “at least several years beyond” Sony. contract.

During his FTC deposition this week, Ryan admitted he “wasn’t particularly” happy with Microsoft’s initial proposal, but “hoped it was an opening salvo” – and now we have a clearer picture of his initial response, thanks to newly revealed emails, like spotted by Tom Warren of The Verge. In a response dated May 26, Ryan informed Spencer that Microsoft’s proposal “does not fulfill” the purpose of “ensuring Activision Blizzard games are available on PlayStation”, and that the company has “serious concerns” that ‘an attached counter-proposal from Sony was intended to respond.

Newscast: Nintendo is making it clear there’s still life in Switch, while Microsoft is finding an opportune time to raise prices.

Ryan went on to describe “two fundamental principles that are essential in mitigating the [acquisition’s] potential negative impact on players”.

“It is essential to agree that all Activision titles will remain on PlayStation regardless of their original release dates or whether they can be categorized as part of a particular franchise, just as they have been historically,” he continued. “And this commitment must be long, not just a few years after the acquisition”.

Ryan also insisted that an agreement must be reached to “deal with how the games will be available”. If Activision games are only made available on terms that are disadvantageous to PlayStation compared to other platforms, this could amount to not making them available. on PlayStation at all.”

As an example, Ryan wrote: “Making Activision games available on PlayStation after those games have been made available on Xbox would be contrary to the spirit of Microsoft’s commitment to keep Activision games on PlayStation, as well as ‘unsatisfactory for players.

“As long as you agree to the fundamental principle – Activision games should not receive unequal treatment on parties’ subscription services – we are open to further discussing the specifics of how this might be accomplished,” Ryan continued. , adding “equal treatment of Bethesda games would be a logical topic for discussion between the parties as it involves some of the same concerns as the unequal availability and/or treatment of Activision games”.

Ryan’s memo to Spencer ended by asking Microsoft to confirm that “these terms are acceptable as a framework for the parties to negotiate a proper written agreement”, and that an agreement would be prepared by doing so.

Microsoft’s next key email, also revealed during the FTC case, came three months later, on August 26, 2022, when Xbox boss Phil Spencer reiterated that the Xbox company “would like to find a way to maintain [Sony’s relationship as an important distributor of Activision content] once we close the acquisition of Activision.” Spencer added that he would “continue to support” a January written agreement pledging to “keep all existing Activision console titles on Sony, including future versions of the Call fo Duty franchise or any other current Activision. franchise on Sony, until December 31, 2027.”

Spencer reiterated that this would include content and feature parity, and promised that there would be no “timed exclusive releases of this content on Xbox consoles”. However, he then added: “It is difficult to align the principles set out in your email of May 26, 2022 with Sony’s leadership role in the market. As I have said before, we believe that retaining these titles on Sony, like we did with Minecraft, is what the industry and gamers need.”

According to The Verge’s report of this week’s trialSpencer reportedly included a list of titles that would remain on PlayStation in his August email, but Ryan, during his deposition, said the list was “insignificant” and “represented a particular selection of older titles. that would stay on PlayStation. For example, Overwatch is here but Overwatch 2 isn’t.”

It was at this point in the timeline, following Spencer’s email, that talks apparently began to break down between Microsoft and Sony in a very public way. Spencer began to openly discuss aspects of his negotiations with Sony with the press, which led Ryan to call Microsoft original contract “inadequate on several levels”.

“I had no intention of commenting on what I understood to be a private business discussion,” Ryan told GamesIndustry.biz at the time, “but I feel the need to set the record straight because Phil Spencer introduced it to the public forum”.

Since then, Sony has strongly opposed Microsoft’s proposed acquisition of Activision Blizzard, even as more regulators around the world have begun to approve the deal. Currently, the UK CMA is the only regulator to have blocked the acquisition – a decision that Microsoft will make call soon – but the FTC also expressed dissatisfaction with the proposal.

Microsoft’s legal battle with the FTC is expected to continue this week as the antitrust agency seeks an injunction to block the company’s Activision Blizzard deal ahead of its own internal deliberations. So expect further revelations as the proceedings continue.