Microsoft President: We’re Trying to Innovate in the Gaming Space Like Netflix Did Against Blockbuster

Alessio Palumbo
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In a new guest post published in The Wall Street Journal, Microsoft President and Vice-Chair Brad Smith argued that the company is trying to innovate in the gaming space like Netflix did against Blockbuster and likened Sony's hostile stance to that of the former leader in video rentals when faced with opposition.

Smith also confirmed the rumored 10-year deal to release Call of Duty day and date on PlayStation and added that Microsoft could commit to the same agreement for other platforms, too.

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Sony has emerged as the loudest objector. It’s as excited about this deal as Blockbuster was about the rise of Netflix. The main supposed potential anticompetitive risk Sony raises is that Microsoft would stop making “Call of Duty” available on the PlayStation. But that would be economically irrational. A vital part of Activision Blizzard’s “Call of Duty” revenue comes from PlayStation game sales. Given the popularity of cross-play, it would also be disastrous to the “Call of Duty” franchise and Xbox itself, alienating millions of gamers.

That’s why we’ve offered Sony a 10-year contract to make each new “Call of Duty” release available on PlayStation the same day it comes to Xbox. We’re open to providing the same commitment to other platforms and making it legally enforceable by regulators in the U.S., U.K., and European Union. Microsoft made a similar commitment to the European Commission when we acquired LinkedIn in 2016, ensuring access to key technologies for competing services.

Smith reiterated that Microsoft needs Activision Blizzard games to make Game Pass more appealing, which he argues would be in favor of consumers as they'd get the chance to access a large number of titles for a single fee, like with Netflix. He also said the acquisition is necessary to compete in a market that's dominated by Sony and Nintendo on consoles and nearly blocked off on mobile by Apple and Google. Indeed, Microsoft Gaming CEO Phil Spencer already stressed that the rationale behind the acquisition is mainly to increase the presence on mobile platforms.

The Microsoft President also referenced the deal with the Communication Workers of America, where the company agreed to stay neutral as groups of employees attempted to unionize. This earned Microsoft the endorsement of the CWA for the Activision Blizzard deal.

The endorsement has been renewed by CWA president Chris Shelton now that the first group of Microsoft employees announced plans to unionize. It's the Q&A portion of ZeniMax, who labeled themselves ZeniMax Workers United.

The group said a vote would take place over the next four weeks.

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