No, COD is Not Going to be an XBOX Exclusive
Contributed by DJMMT
If you live under a rock, then you may not have heard that Microsoft just bought Activision Blizzard for $70B. Now I can say a lot about that. I could talk about how the US Congress no longer enforces our anti-trust laws. I could talk about how a lack of competition is bad for the industry. I could go into detail about how buying established studios is completely different from building them from the ground up. But I don’t want to have that conversation right now. I just want to talk about one issue that seems to be the bulk of discussions about this merger. Or rather exactly half the discussions about this merger, as many people seem to be making this about Bobby Kotick leaving Activision Blizzard which, let’s be clear, is a red herring to distract you from the glaring trust forming by this merger being allowed to happen. But I don’t want to talk about that half of the conversation either. What I want to talk about is a COD.
I have seen so many conversations since the news of Microsoft buying Activision Blizzard broke about the future status of COD. I don’t know why people care about COD. I’ve never understood why people continue to shell out money year after year for this copy and paste war FPS, but they do. And I can’t blame Activision for putting it out every year. Same thing with EA and Madden. If people are foolish enough to keep buying, then the only correct business decision is to keep selling. And people are so into COD that PS users are afraid that it might become an XBOX console exclusive. I’m here to say that while I don’t care either way what happens to COD, no I absolutely do not believe that COD will become an XBOX console exclusive.
First of all, Microsoft doesn’t really care about XBOX consoles. I know that’s a tough pill for a lot of fanboys to swallow, but their recent decisions should make it clear to anyone paying attention that Microsoft, the software company, doesn’t really care about their gaming hardware. Because they don’t make any money on it and never have. To be clear, neither do PlayStation consoles. The difference between Microsoft and Sony is that Sony needs you to buy that PS5 in order for Sony to make money on you. Microsoft doesn’t. I often hear people talk about Microsoft in reference to console gaming because of XBOX as a direct comparison to Sony and PlayStation and separate from PC gaming. But this is stupid. Because Microsoft is PC gaming. When you play a game on Steam, you’re playing a game on Microsoft’s OS. Or you’re a weirdo. When you play a game on Epic Games Launcher, you’re playing a game on Microsoft’s OS. When you play a game on XBOX GamePass for PC, you’re playing a game on Microsoft’s OS. Microsoft is PC gaming.
Why do you think Microsoft started pushing the “play anywhere with XBOX” concept? It’s because no matter where you play, they make money. Microsoft has never been a hardware company. They have never really cared about hardware. The company makes its money by nickel and diming people for software licenses. They always have, and they always will. GamePass is just the most recent example of that from Microsoft and it happens to focus on gaming, as that’s currently the most lucrative medium of mass entertainment. They don’t care about your plastic box with a limited use PC in it. They care about you paying fees to use their software-based services. That’s why they’re pushing GamePass to all platforms possible and funding it at a loss. They don’t care about the platform. They care about the perceived long-term benefits of having a huge subscription base. The XBOX name is branding. It transcends the box. The long-term goal for Microsoft is to kill the console completely and make XBOX a sub-brand of Microsoft that’s synonymous with gaming. Think ASUS ROG. It's just ASUS with a gaming coat of paint. That’s what they want for XBOX.
Make no mistake, those fees will increase. They’re low now while they work to get you hooked. And they’re absorbing as much content as possible so that playing anywhere other than XBOX (the brand) seems wasteful and needlessly expensive by comparison. They’re building Disney+ without the Marvel and Star Wars content. So they’re using volume rather than quality as the selling point. And it’s working. But let me tell you why COD won’t end up being XBOX (console or brand) exclusive.
Microsoft’s goal is to get GamePass as a subscription service on everything. They don’t actually like managing game development, owning studios, or being responsible for entertaining people. Think about the fact that they’ve only just now formally formed a Microsoft Gaming Division or however you want to refer to it. Phil Spencer is now the “Microsoft Gaming CEO”. Before he was “Executive Vice-President of Gaming at Microsoft”. That means for 20 years, Microsoft wasn’t taking gaming that seriously. It’s only now that they’re trying to build a Netflix level gaming subscription service and push their cloud business as a competitor with Amazon’s that gaming has any real meaning to them. Also, the metaverse concept, which will only help to prop up their cloud business, works really well when you already own a ton of IPs. So let’s finally talk about COD.
COD is trash and I don’t know why people buy it every year, but they do. In huge numbers. It’s one of the most lucrative franchises of all time. A lot of gamers love overpaying for online FPS multiplayer. Multiple COD installments have sold more than 30M units! Call of Duty: Black Ops - Cold War sold almost 6M units in November 2020 alone. According to Activision, 39% of those sales were on PS4 and 17% were on PS5. That means more than 50% of COD sales for one of their most recent installments came from PlayStation users. Not the XBOX users, who champion FPS above all other genres. And not the PC Master Race, who claim their platform is the best place to play FPS games. The bulk of people playing COD in 2020 were on PlayStation consoles. That franchise lives and breathes because of the number of players. GamePass or not, the investors at Activision Blizzard, absolutely did not agree to that buyout with the understanding that Microsoft was going to just throw away more than 50% of the sales base of their largest franchise for a subscription service that currently loses money.
Here's what is going to happen. PlayStation is now open to porting games to PC. The recent PC launch of God of War has been very successful. More than 60,000 players bought the game on Steam day one. A five year old video game moved that many units on Steam in a single day. And that’s not including the fact that God of War is also available on Epic Games Store for PC. We’ve seen other successful PS ports to PC like Horizon Zero Dawn and Death Stranding. Again, Microsoft wins when people play games on PC. They want to see Sony porting games to PC. But if COD gets locked off from PlayStation consoles, Sony will put an end to PC ports real quick to protect their base. Those exclusives sell consoles. Microsoft is not going to leave that much money on the table by giving up more than 50% of COD’s player base and they’re certainly not going to actively discourage Sony from helping them realize their vision of getting everyone to PC and ultimately doing away with the XBOX console altogether. What might happen is that Microsoft cuts a deal with Sony where they keep COD, and other Activision games, available on PlayStation in exchange for those PS exclusives ports being available on GamePass for PC.
If Sony ultimately doesn’t deliver an answer to GamePass worth talking about, I could even see Microsoft negotiating to get GamePass available on PS5 in exchange for keeping COD available on the platform. That would present some problems considering COD being on GamePass on PS5 would ultimately kill COD direct sales on the platform, but I’m sure Microsoft can afford to pay out the difference. Getting the subscription service to more platforms is their priority at this point. Not making money off said subscription. That comes later.
Ultimately, the point is that COD will be available on PlayStation platforms for the foreseeable future. I absolutely do not see XBOX making it exclusive. Especially if the cross-play discussion continues with the momentum it currently has. Fear not casuals on PlayStation consoles, your beloved mediocre competitive FPS is safe and sound. You will still be playing COD on PS4/PS5 in 2024 and beyond. Microsoft is arrogant, flagrantly wealthy, and at best ambivalent about gaming. But they are not stupid. The company knows how to make money. There’s a reason they’re evaluated at more than $2T. And it’s not by actively trying to anger 100M people by telling them they can’t purchase your products.