Microsoft merger is the only chance for Activision games to come to subscription

Activision-Blizzard games will not appear on any subscription services if the merger with Microsoft does not go through.

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In a recent 111-page response letter to UK regulators, Microsoft reveals some rather interesting details about Activision's thoughts on subscriptions. According to Microsoft, who cites internal data and sworn testimony from executives, Activision has no plans to bring its big mainline games to a subscription service if the merger is not approved.

This is particularly interesting because of a pre-existing deal that Activision made with Sony. Some time ago Activision had signed a big multi-year marketing and licensing deal with Sony that offered exclusive content to PlayStation. Part of that contract stipulated that Activision could not release Call of Duty on Game Pass. According to Microsoft's recent statements to the CMA, Activision had no plans to release Call of Duty (or any of its big games) to Game Pass anyway.

Here's the quote from Page 5:

Activision has never published any newer content on multi-game subscription services and has no intention to do so in the future...

...Without the Merger, Activision content would not be available on multigame subscription services. The Merger can therefore not make competitive conditions worse, under any circumstances.

Activision does not make its games (including Call of Duty) available in any meaningful sense to any multi-game subscription services, nor is there any evidence that this is likely to change in the foreseeable future.

Activision's ordinary course internal business documents, as well as the sworn testimony of its executives, has made clear that there are no plans

to do so in the future absent the Merger. Activision is concerned that participation in subscription services could impact its (REDACTED) and would lead to brand dilution and cannibalisation of buy-to-play sales (especially of new releases). This reflects Activision's view that even if the subscription business model were to grow, the (REDACTED). This has been a fundamental impediment to publishers more generally agreeing to place their content on subscription services, a stance which is not going to change in the future.

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The reason is pretty clear. Day and date releases of Call of Duty would dramatically affect full game sales. Even older catalog games still sell incredibly well, and for instance, the franchise sold 25 million copies of various games during 2021, which was seen as a "down year" due to Vanguard's performance.

Call of Duty is so powerful because it takes advantage of both full game sales and in-game purchases via microtransactions. Disrupting full game sales would significantly affect Call of Duty earnings; for reference, Modern Warfare 2 made over $1 billion in 10 days solely from full game sales across all platforms.

This is the same reason why Take-Two Interactive will not release games on day 1 on Game Pass, and why it only supports Game Pass on a very selective and limited basis.

This also seems to confirm that Activision was not working on its own multi-game subscription service comparable to EA Play or Ubisoft+.