 Before we get into today's video, I want to remind you that we are on our road to 100,000 subscribers and if we can get there by the time Tears of the Kingdom comes out, we will be giving away a collector's edition of Tears of the Kingdom. You get that steel book, that art book, that poster, the pin set baby. It's really, really exciting. Hopefully we can get there. So what are you waiting for? Why don't you subscribe to the channel. Today is an interesting day in the history of video games because Sony has outed themselves and their true intentions when it came to this Activision Blizzard deal. Remember throughout this deal they have been bad-mouthing Microsoft, bad-mouthing Nintendo. Nintendo actually originally got dragged into this because they tried to argue, Sony did that Nintendo is not an actual competitor in the video game space, that their system isn't a competitor, that they can't get games like Call of Duty and well, Microsoft has a direct response to that today despite, you know, they signed a 10-year deal which Sony dismissed and said doesn't really matter because you can't run it and the CMA was initially agreeing with them out in the UK. In fact, here's what Microsoft has said about this whole thing in documents released by the CMA yesterday. The Activision development team have a long history of optimizing game performance for available hardware capabilities. The parties are confident that in addition to Call of Duty Warzone, Call of Duty buy to play titles such as Modern Warfare 2 can be optimized to run on the Nintendo Switch in a timely manner using standard techniques which have been used to bring games such as Apex Legends, Doomy Turtle, Fortnite, Crisis 3 and more to Switch. Activision estimates that this could be done within a period of redacted months. The benefits will be substantial. Even taking into account any technical limitations of the current Nintendo Switch, Microsoft estimates on a highly conservative basis that the net present value of the benefits to Nintendo customers for having access to Call of Duty over 10 years to be at least blank million dollars. By widening access to Call of Duty, the merger will have the added benefit of increasing the pool of gamers able to play the game, improving the cross-play functionality of the game and enabling more gamers to play with their friends. So the big takeaway obviously from there is that yes, Microsoft does think that they can bring Call of Duty and Activision as well. They both think they can bring Call of Duty to Switch without much problem and that it would be native. This sort of ends the cloud debates on if they would come to Switch, what would they do? It wouldn't be a cloud version. It would be a native version of the games that would again have that feature parody. So that includes cross-platform play by the way, which is a pretty interesting aspect of Call of Duty. However, Sony isn't okay with any of this and they had their own responses in these documents. First up, it says swiftly detecting any diversions from and ensuring compliance with a commitment as to technical or graphical quality would be challenging. For example, Microsoft might release a PlayStation version of Call of Duty where bugs and errors emerge only on the game's final level or after later updates. Even if such degradations could be swiftly detected, any revenue would likely come too late by which time the gaming community would have lost confidence in PlayStation as a go-to venue to play Call of Duty. Indeed, as modern warfare 2 would test, Call of Duty is most often purchased and just the first few weeks of release, if it became known as the game's performance on PlayStation was worse than on Xbox, Call of Duty gamers could decide to switch to Xbox for fear of playing their favorite game at a second class or less competitive venue. What Sony is doing there is accusing Microsoft of trying to sabotage Call of Duty on their platform even though there is a self-admitted 80% of the player bases on PlayStation in the first place from At Division and Xbox. So they would be hurting their own reputation far more than PlayStation's reputation to do that. So it's a very interesting accusation of something that hasn't happened with anything else Microsoft has brought to PlayStation. Ori runs the same, Minecraft runs the same. There's no real reason to assume they would do this, but they're trying to get every legal argument they can to block the merger. Sony also went on to say this, so as the CMA is aware, Sony Interactive Entertainment made it known it's concerns about the transaction to Microsoft almost a year ago. In the intervening period, Microsoft has not shown any real commitment to reaching a negotiated outcome. Remember that line, Sony is claiming that Microsoft is not playing fair and not trying to actually negotiate fairly with Sony. Keep this in mind as we're about to learn something very important about these negotiations. They have dragged their feet, engaged only when sensed by the regulatory outlook was darkening and favoring negotiating in the media over engaging directly with Sony Interactive Entertainment. Microsoft's most recent proposal, which Sony Interactive Entertainment received, and then this is redacted, is telling. That proposal fails to provide adequate protection for PlayStation's access to Call of Duty or for competition. Instead, it reveals Microsoft's lack of commitment to ensuring full and equal access to Call of Duty confirms the risk of the behavioral remedy outlined in the guidelines and reinforces Sony Interactive Entertainment believe that Microsoft intends to use Call of Duty strategically to dominate the gaming sector. More than this, Microsoft came back to say the remedy will actually provide the wholesale price of Call of Duty games offered to Sony and then this is redacted because they're not going to give us any extra financial numbers for the equivalent version of the game on Xbox platforms. So they're saying it's the same version subscription and streaming rights. So this has been a point brought up by Sony that they're worried about, you know, Microsoft doing this whole, hey, it's on, it's on Game Pass. We can't compete with that because we won't be able to do something with it like that. Any Call of Duty game in a Microsoft multi game subscription, which a game pass is eligible for inclusion in Sony's multi game subscription service at the same time in the same duration. This comes directly from Microsoft. Microsoft basically say, Hey, if we put it on Game Pass, you can put it on PlayStation Plus. We're not stopping you. OK, Sony didn't like that. Microsoft's proposal in MGS services, this is game services, is even more troubling. Microsoft proposes to license blah, blah, blah, blah. It's it's redacted. If Sony Interactive Entertainment agrees to pay because obviously you would have to pay money like you wouldn't any deal for it to be on your service under the terms of the proposal, that amount and then redacted. We don't learn a lot about the numbers, but this would commercially destroy Sony Interactive Entertainment's MGS business model. A yearly subscription to PlayStation Plus extra Sony Interactive Entertainment's mid tier MGS service is priced at around $100 and the buy to play retail price of Call of Duty today is around $70 under Microsoft's proposed terms. Sony Interactive Entertainment would therefore be required to pay X amount of money that they're not going to reveal as the chart shows this will leave Sony Interactive Entertainment only with blank the full 100 annual subscription. So obviously it would eat into some of their profitability and Sony's argument is basically they're not willing to lose money on their subscription service and to add Call of Duty would probably lead to them losing money in comparison to actual game sales. But we're not done because Lulu Cheng mess survey. I probably butchered the name. So I do apologize. She is the EVP of Corporate Affairs and CCO of Activision Blizzard and she did not take kindly to these things coming out publicly stating that Microsoft has not been negotiating in good faith with Sony that they're that it's all a bunch of hogwash. Well, she works for Activision. So here's Activision site because throughout all of this we haven't heard anything from Activision. So she responded on Twitter and says Microsoft offered Sony the dominant console leader for over a decade with 80% market share a 10 year agreement on far better terms than Sony would ever get from us. She literally just said you're talking about how this is not a fair business agreement. They were offering you better terms than we've ever offered you when we were independent. Activision Blizzard would never give you these terms for them. It's insane to offer the terms that that that Microsoft is offering. So how can you call it not fair when you signed worse agreements with Activision Blizzard? That's the part that Activision Blizzard doesn't understand. Microsoft's offering you way more than we ever did. And you're just like, nope, it's not in good faith. Really? Who's not negotiating good faith? We're about to find out in a moment. We've also offered Sony guaranteed long term access to Call of Duty, which that implies beyond the 10 years. The 10 years just like a starting point. But Activision came in and said, hey, we'll make sure that you always have Call of Duty, but they keep refusing. Why? Well, Lulu Cheng knows why because Jim Ryan told them back at the end of February, she points out that the CEO of Sony Interactive Entertainment answered the question on why they wouldn't sign the deal in Brussels. In his words, remember, this is Jim Ryan. I don't want a new Call of Duty deal. I just want to block your merger. Let that sink in. Let that sink in what Jim Ryan just said. All these accusations of, oh, Switch isn't a competitor. Oh, Call of Duty can't run on Nintendo Switch. Oh, we're worried you're going to give us a worse version and create a competitive advantage. Oh, we're just, you're not negotiating with us in good faith. We can't sign the deal with you because the contract you're offering is not fair, even though it's probably more than what they offered Nintendo. And he just said, I don't want a new Call of Duty deal. I just want to block your merger. Who's not operated in good faith now? The truth shall set you free. And the truth is that Microsoft in the middle of February last year put in a legal request for Sony to have to unveil all of their documentation about the contracts they have made to create exclusivity of DLC and exclusive video games like Final Fantasy 16. Their platform that created a competitive advantage for Sony. Sony has been doing what Microsoft is doing for years on a different scale because they're not straight up buying up companies, but they've been buying rights to massive video games and exclusive DLC and exclusive perks in games like Call of Duty for decades. And it has helped them maintain a stranglehold in their position. And Microsoft called their bluff and said, you're going to talk about us. Let's talk about what you've done to us in this space and what we don't have because of you. And the moment that Sony was going to be legally required to air their dirty laundry, the truth comes out. This wasn't about Call of Duty. We just want to block your merger. This is the line of not only someone who is very full of himself. And Jim Ryan has said a lot of stupid things over the years, but he doesn't get fired because Sony keeps making a lot of money. You know, his job is to make Sony money, his job is to keep them number one. And he's done a good job at that. So it doesn't really matter what he says. He's not getting fired, but these words are damning. It's an admittance of defeat to update you guys in the way things are going right now. It is leaning towards the FTC is going to end up approving the sale. So they're not really going to have to worry about the legal process as much in the US. They were waiting to see the European one play out. And recent reports out of the European Union is about to approve the sale. So all that's left is CMA and CMA was already starting to slowly turn away from the arguments that Sony was making leaning more towards Microsoft because when all of the evidence is laid bare, even the government looks at it and goes, you're not even arguing about this being a monopoly anymore. You're just worried that they might gain ground on you. And that is not anti competitive. That's pro competitive. You're just worried that Microsoft is going to gain ground. But you own so much of the market, especially in the UK, that this can't be true. And then all of your arguments that we initially heard for why the other competitor in this field, Nintendo, don't matter. There's working with Microsoft and getting Call of Duty. My Activision straight up says we can put Call of Duty on switch. Of course, at least people to wonder why they haven't been doing it this whole time, it was probably just a business decision, not really related to the ability to run it, just them being like, whatever. I know some people say, oh, a switch runs it. It's going to, guys, just wait. We're probably going to get at least one Call of Duty game on switch. Maybe it's just Warzone and it's probably going to run just fine. It's not going to be the prettiest looking game or anything. It's going to run just fine. Look, we've already seen games like it run on switch, right? I just think that in all of this. It's weird to me that the trillion dollar company that most people would be against corporate acquisitions comes out looking like the good guys. Well, Sony looks like the kid who had his lollipop taken from him on the playground but then reminded that he never owned that lollipop and he stole it in the first place. It's really weird watching Sony react to this and it's really weird hearing these words come out publicly. It's what we all knew. We all knew that really all this was about with Sony wanting to block the merger because they didn't want to lose any possible market share and they just want to hurt Microsoft's position in the gaming market. We all knew that's really what it was about, but to have them say it publicly after making all these other arguments about, oh, they're not negotiating for Call of Duty in good faith, Nintendo doesn't count as a competitor, blah, blah, blah. And then you get to the end when Sony is literally forced to play their hand and have to show all of their exclusive marketing deals, all their exclusive ways that they've actually kept Xbox down. Like Microsoft's like, look, we're not, we're done. We're done. You've been keeping us down for decades. Let's air your dirty laundry, get your deals out in the wild. Hey, why is Final Fantasy 16 only coming to PlayStation 5? Can you explain this? What's your exclusive deal for that? Sony backs off. It wasn't about Call of Duty. We just wanted to block the merger. We're tucking our tail and going home because Sony doesn't want to do it. Sony's at this point, I think, completely backed off. So because if that stuff comes out, we might find out some very interesting ways that Sony worded their contracts to ensure Xbox was always at a disadvantage. Pot calling the kettle black, huh? Anyways, folks, let me know what you think about this down in the comments below. I am Nathan Ruffa-Jance and I'll catch you in the next video.