There’s been plenty of strife lately surrounding the possibility of Microsoft making the world’s best-selling video game franchise of all time, Activision’s Call of Duty Xbox exclusive following the proposed $68.7 billion merger between the two companies. Sony Interactive Entertainment recently presented the argument to the Brazilian regulatory body that Microsoft/Xbox having exclusive rights to the series would give them an unfair advantage; that is, ultimately making gamers choose Xbox over Playstation.

“According to a 2019 study, ‘The importance of Call of Duty to entertainment, in general, is indescribable,’” Sony said in a questionnaire answer to the Brazilian regulatory body. “The brand was the only video game IP to break into the top 10 of all entertainment brands among fans, joining powerhouses such as Star Wars, Game of Thrones, Harry Potter and Lord of the Rings.

“Call of Duty is so popular that it influences users’ choice of console, and its community of loyal users is entrenched enough that even if a competitor had the budget to develop a similar product, it would not be able to rival it.

“No other developer can devote the same level of resources and expertise in game development,” the company added. “Even if they could do that, Call of Duty is overly entrenched, so that no rival – no matter how relevant they are – can catch up.”

So what action will Microsoft take with the Call of Duty franchise if the proposed merger goes through? Will they make Call of Duty Xbox exclusive? Although some die-hard Xbox loyalists might be disappointed, Microsoft reiterated on Wednesday that they have no intentions of taking Call of Duty away from Sony/Playstation.

“Regardless of how unsurprising Sony‘s criticism of content exclusivity is – given that PlayStation’s entire strategy has been centred on exclusivity over the years – the reality is that the strategy of retaining Activision Blizzard’s games by not distributing them in rival console shops would simply not be profitable for Microsoft,” Microsoft said in a document to Brazil’s Administrative Council for Economic Defense (CADE).

“Such a strategy would be profitable only if Activision Blizzard’s games were able to attract a sufficiently large number of gamers to the Xbox console ecosystem, and if Microsoft could earn enough revenue from game sales to offset the losses from not distributing such games on rival consoles,” Microsoft added.

“As if that weren’t enough, exclusivity strategies still result in title-specific costs,” Microsoft continued, followed by some statements that were redacted for confidentiality reasons.
“Such costs, added to the lost sales estimated above, mean that Microsoft would not be able to offset the losses by earning higher revenues in the Xbox ecosystem as a result of implementing exclusivity.

“This is especially true considering (i) the ‘gamer-centric’ – as opposed to ‘device-centric’ – strategy that Microsoft has pioneered with Game Pass, and (ii) the fact that PlayStation has the most loyal users across its various generations, with all indications that brand loyalty accrued in previous rounds of the ‘console wars’ suggesting that PlayStation will continue to have a strong market position.”

Microsoft ended the discourse by saying that even if they did intend to make Call of Duty Xbox exclusive, such a move “would have no competitive impact” on account of “the intense competition in the game publishing market” — essentially saying, that exclusivity of game franchises is the nature of the business and certain gamers would remain loyal to a system such as Playstation no matter which franchise Xbox had in exclusive fashion, even a juggernaut such as Call of Duty.

“In summary,” Microsoft said, “the hypothetical adoption of any content discontinuation strategy would content would not be profitable for Microsoft and, even if implemented, such strategies would have no competitive impact, for the reasons described above.”

https://www.retbit.com/2022/08/11/making-call-of-duty-xbox-exclusive-simply-wouldnt-be-profitable-microsoft-says/