Call of Duty’s latest battle is between Microsoft and Sony

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Hunting down your enemies on the bustling streets of Amsterdam, along the U.S.-Mexico border or in a Middle Eastern fishing village is just part of the intense action in the latest Call of Duty video game.

The Friday release of Call of Duty: Modern Warfare 2 continues a nearly two-decade run for California-based Activision Blizzard’s wildly popular military shooting game franchise. New installments of the game can rival Hollywood’s biggest blockbusters in how much they earn on their opening weekend.

But the battle this time is also happening off-screen. Call of Duty is at the center of a corporate tug-of-war between Microsoft’s Xbox and Sony’s PlayStation over Microsoft’s pending $69 billion purchase of Activision Blizzard.

“Microsoft would have full ownership of one of the most valuable franchises in console gaming,” said Joost van Dreunen, a lecturer on the business of games at New York University’s Stern School of Business. “And naturally, Sony does not want that or like that because it will cost them business.”

Microsoft has been working to get approval from antitrust regulators in the U.S., Europe and elsewhere to complete its January agreement to acquire the video game giant. But it’s been trailed around the world by objections from Sony, which is afraid of losing access to what it describes as a “must-have” game title.

Among those listening to Sony’s concerns are antitrust regulators in the United Kingdom who last month escalated their investigation into whether Microsoft could make Call of Duty and other titles exclusive to its Xbox platform or “otherwise degrade its rivals’ access” by delaying releases or imposing licensing price increases.

“These titles require thousands of game developers and several years to complete, and there are very few other games of similar calibre or popularity,” said a September report from the UK’s Competition and Markets Authority.

At the Southern California studios of Infinity Ward, the division of Activision Blizzard responsible for creating the new game, the Microsoft-Sony fight has been secondary to game developers’ more pressing worries about making sure their newest release satisfies legions of diehard fans.

“It’s always tough when you have something this popular and everybody’s got an opinion on what it should be, what it shouldn’t be,” said Jack O’Hara, the game’s director.

Work on Modern Warfare 2 started before the COVID-19 pandemic shuttered Infinity Ward’s headquarters outside of Los Angeles, forcing developers to be more creative in how they drew the game’s characters, weaponry, motions and scenery and recorded its voices. It was the same studio that in 2003 launched the original Call of Duty, a first-person shooter set during World War II.

Mark Grigsby, the studio’s animation director, first joined in 2005. He said he was feeling “a little bit of anxiety” ahead of Friday’s release about how players would react to tweaks affecting the feel of the virtual weapons they’re carrying, such as how they recoil after a shot is fired.

“Every iteration of the product, you’re never able to get everything that you wanted to do done in that one edition. So you’re always trying to up your game,” Grigsby said. “It takes an army and a talented army.”

The games have gradually grown more visually realistic, interactive and multiplayer in the past two decades. They’ve also become more contemporary, starting with 2007’s Call of Duty 4: Modern Warfare, which took the fighting to modern-day settings in the Middle East and Ukraine. Friday’s release is a sequel to a popular 2019 game that was itself a refresh of that 2007 game of the same name.

Studio executives said they consulted advisers and experts before incorporating storylines and imagery from the politically-charged U.S.-Mexico border wall, as well as a collection of settings that are meant to evoke a Mexican town and a fictional Middle Eastern country. Ukraine, where the company has some employees affected by Russia’s war, is notably absent.

“We want to have that realism and feel like it’s a world that we know and it’s not outside of the realm,” O’Hara said. “However, obviously, we’re all impacted by current affairs. And so we always want to stay away from something that just feels glib or just not right, essentially. The goal is not to profiteer off of anything.”

Infinity Ward executives declined to talk about their pending takeover by Microsoft. But Microsoft is increasingly speaking out about what would be the largest-ever tech acquisition, trying to assure regulators that it will keep Call of Duty on the PlayStation “for at least several more years” beyond its current contract with Sony.

While Brazil and Saudi Arabia have already approved the deal, it still awaits important decisions from the U.S. Federal Trade Commission and authorities in the U.K. and the European Union. Microsoft told investors Tuesday that is still expects the deal to close by the first half of next year. But it’s possible regulators could impose conditions that force Microsoft to keep access open to Call of Duty for a longer time and ensure that its rivals aren’t getting a lesser version.

“Is it really that important for Sony on a financial basis? Probably not. But it’s mostly the draw of having all these people come to their platform,” van Dreunen said.

And while important to console-makers and the digital subscription services they are building, Call of Duty and its fanbase is just a portion of what Microsoft would get from taking over Activision Blizzard, which owns dozens of titles including popular mobile games like Candy Crush. Van Dreunen said while the attention is on the Call of Duty dispute, that mobile expansion might be the real “gravity point” for Microsoft’s massive merger.

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