Microsoft's latest Activision acquisition defense: What if Call of Duty sucked?

One of the big sticking points in Microsoft's proposed acquisition of Activision Blizzard is Call of Duty. Both Sony and regulators have expressed concerns that Microsoft could use the series as a weapon against PlayStation by making it exclusive to Xbox consoles. Microsoft has repeatedly said that it won't do this, but in a new response to the UK's Competition and Markets Authority it also made the point that it might not matter someday, because nothing is forever.

There are few videogame series as lucrative and reliable as Call of Duty, it's true. It's been around for almost 20 years now—the original Call of Duty launched in 2003—and became a true behemoth with the release of Call of Duty 4: Modern Warfare in 2007. It's understandable that Sony would be a little jittery at the prospect of losing access to millions of game sales (and millions more microtransactions) every year. But what if Call of Duty sucked? Nobody would care about exclusivity then, right?

"While Call of Duty is one of a number of popular franchises, its success over time is not guaranteed," Microsoft wrote in its response to the CMA. "Relevance with gamers is earned or lost with every release.

"This dynamic is shown by the performance of last year’s Call of Duty: Vanguard release, which was heavily criticized by the trade press and gamers alike, resulting in significantly lower sales than reflected in the internal documents cited by the CMA."

Vanguard isn't the only Call of Duty to disappoint in recent years, of course: Infinite Warfare, released in 2016, sold only half of the previous year's Black Ops 3.

The CMA didn't immediately buy the argument, stating in reply that the Call of Duty series as a whole continues to have "persistent high revenues and player engagement" even when individual titles fail to meet expectations, and that "gamers who did not like Vanguard most likely continued to play older CoD titles rather than switch away to a different game."

Microsoft defended its position, however, by noting Activision's 10Q filing for the quarter ended June 30, 2022, which showed an across-the-board decline in Call of Duty in the months following Vanguard's release: "Average MAUs [monthly active users] decreased by 47 million or 12% for the three months ended June 30, 2022, as compared to the three months ended June 30, 2021 ... primarily due to lower average MAUs for Activision, driven by the Call of Duty franchise."

The 10Q filing also cites Crash Bandicoot: On the Run! as contributing to that decline in Activision's monthly playerbase, but Microsoft did not include that in its response. It also didn't mention the part in the filing where Activision said that "we believe that overall trends in the number of MAUs can be a meaningful performance metric, [but] period-to-period fluctuations may not be indicative of longer-term trends." Take that as you will.

Microsoft may be torquing the point a bit, but even so it's a fair position to take: Popular videogame series are remarkably durable—just look at Madden NFL, which has been around since the 1980s—but nothing is forever and it's quite possible that someday, people will get bored with annualized iterations of the same basic military shooters. Is it likely to happen anytime soon? I would have to say no, and the bulk of Microsoft's defense in this CMA filing (relating to Call of Duty) continues to rest on the economic argument that it wouldn't be in Microsoft's interests to take Call of Duty off PlayStation platforms.

But it's an interesting (and, let's be honest, fun) acknowledgement: Someday there might be a Call of Duty so bad that Sony wouldn't even want it.