It’s been just over a year since Microsoft broke industry records with its $75 billion acquisition of Activision Blizzard — and next week, that pricey deal will face its most significant test yet.
The launch of Call of Duty: Black Ops 6 will be a major data point for both Microsoft itself and outside observers, as they try to figure out the value of the deal and what kind of strategy we’re likely to see from next year. company in the coming years. That’s because Black Ops 6 will be available to Game Pass premium tier subscribers at launch — a major accomplishment for Game Pass, but one whose costs and benefits remain largely impossible to predict.
This launch is a major milestone in the grand experiment of Microsoft’s integration of Activision Blizzard and its catalog
It’s not unfair to say that Call of Duty was the Activision IP that Microsoft was most desperate to acquire; It was this franchise that justified this extraordinary acquisition price, to the extent that it could be justified at all.
However, owning Call of Duty has left the company in a strange position, as it now owns a massive franchise that generates a very large slice of its revenue on PlayStation. Fears of Microsoft making the franchise an Xbox exclusive were never realistic; Even if Xbox leadership wanted to do so, cutting into the potential revenue of such an expensively acquired new subsidiary would never gain the approval of Microsoft’s senior management.
Sony’s big fear, and the reason it lobbied competition authorities to block the takeover, was a bit more nuanced: It feared that Call of Duty would be exclusive to Game Pass as a subscription title, tilting the competitive landscape by allowing Microsoft to signal that people who pay $70 for the game on PlayStation can instead play it for free on Game Pass.
That’s exactly what happened, and now it’s time to experiment and test the theory. The performance of this launch, and especially the impact of day-and-date availability on Game Pass on sales on other platforms, will be closely watched by Microsoft itself and its competitors.
However, getting comfortable with Black Ops 6’s daily and historical launch on Game Pass has taken some strategic realignment on Microsoft’s part, with its balancing act sometimes being quite public. It needs Call of Duty to gain prominence on Game Pass in order to grow the subscription service, which is seen as a critical measure of the success of the gaming business overall. However, it also needs Call of Duty to make a significant amount of money, as it always does, since Xbox still effectively has $75 billion in debt securities transferred to Microsoft’s coffers and can’t afford to sacrifice the profit potential of Activision’s biggest IP. In the world. The altar of Xbox’s long-term growth.
Some players might subscribe to Game Pass for a month, complete the single-player campaign, engage in multiplayer, and then cancel the subscription — something that was no doubt expressed behind the scenes | Image credit: Activision
Consequently, we have seen price increases and rebalancing of Game Pass tiers prior to this launch. Xbox players will need to be on the most expensive $19.99 per month tier to get CoD on launch day, though it will still be available at the $11.99 PC tier, which is presumably a concession to a more price-sensitive market. Microsoft has also suspended the $1, 14-day trial of Game Pass that it normally runs, though this isn’t a new strategy — it did the same thing before Starfield launched and will presumably adopt this as a policy for main day. A launch date is in the future as well.
However, rebalancing has been difficult to achieve; It’s been unpopular with consumers (naturally enough) and is arguably risky at a point where Game Pass’s growth seems to be struggling to get past a plateau. If CoD is to be a Game Pass title, the company must be convinced that Game Pass will be an attractive option for fans of the franchise, without risking a reduction in the game’s launch revenue. I’m not sure this is a balance that can be successfully struck, and I suspect some of the internal debates about whether CoD should appear day-and-date in Game Pass were pretty heated, but there wasn’t really a choice here – without the ability to leverage that IP To push Game Pass, the full value of Activision Blizzard’s acquisition of Xbox will be in question.
So we end up with a few compromises midway. Black Ops 6 is going to Game Pass on day one, which is a coup for the service; But only for the most expensive class, and only after the service prices rise.
If getting an exclusive launch day subscription to one of the biggest franchises in the industry can’t move the Game Pass needle, it will raise some questions about Game Pass’s content strategy.
If too many people sign up for a month to play the game and then cancel, it will end up being a huge loss of gaming revenue, which is no doubt a big fear for some people involved in planning this launch. Meanwhile, odds are that the lion’s share of the game’s sales will be on PlayStation 5 – revenue that will be very welcome to the bottom line of Microsoft’s gaming business, but which Sony will also take a tasty slice of as well.
Another cost that’s difficult to calculate is that Black Ops 6 will presumably launch without the marketing support and partnership revenue the franchise traditionally receives from Sony. Depending on how the Game Pass situation plays out — how many new subscriptions this leads to, and how long those new customers remain subscribers — it remains possible, at least marginally, that Sony could end up being the company with the most black ink on its financials from this. launch, which is a small note in what should be a triumphant moment for Xbox.
Call of Duty: Black Ops 6 will be the biggest test of Xbox Game Pass strategy yet | Image credit: Activision
Part of the problem here is that Activision Blizzard’s content strategy on both Xbox and Game Pass over the past year has been very slow to take shape, and very strange in the forms it eventually took.
Browsing Game Pass today gives no indication at all that Microsoft spent $75 billion buying a major publisher to boost the service. By my count, only three Activision Blizzard games have made it to Game Pass; Only one of them is a Call of Duty title. I was honestly surprised to find that CoD’s back catalog is non-existent – this seems like incredibly low-hanging fruit, with releasing older games (even just single-player campaigns) on Game Pass being a pretty obvious way to generate interest and enthusiasm ahead of the huge “event” that is… Game Pass launches for Black Ops 6. “Get ready for Black Ops 6 by subscribing to Game Pass and playing through legacy campaigns” is a clear and compelling message, and it’s nothing short of strange that it didn’t happen.
Browsing Game Pass today gives no indication that Microsoft spent $75 billion buying a major publisher
All of these concerns will evaporate, of course, if Black Ops 6 can truly generate a massive increase in Game Pass subscriptions – and then sustain those subscriptions for at least a few months. If not, though — if gaining exclusive launch-day subscription availability for one of the biggest franchises in the industry can’t move the Game Pass needle enough to change the game’s sales pattern at least a little — it will hit the spotlight. Some questions about Game Pass’s content strategy that have become more difficult to ignore over the past year or two.
Either way, this launch is a major milestone in the grand experiment that is Microsoft’s integration of Activision Blizzard and its catalog. Black Ops 6’s performance next week – and on the platforms where performance is strongest – will play a major role in determining the course of Microsoft’s overall gaming strategy for years to come.
