Microsoft signs deals with Nintendo and Nvidia to make Activision acquisition palatable News

A little over a year ago, Microsoft announced that it would buy Activision Blizzard for $68.7 billion. It’s instantly the largest acquisition in Microsoft’s history, and with this deal, the tech giant will take over one of the world’s largest game publishers. Activision Blizzard King (ABK) owns the popular games ‘Call of Duty’ and ‘Overwatch’, as well as ‘Candy Crush’ and a host of other highly successful mobile games.

Since Microsoft also operates its own gaming platform with the Xbox game console, and its own game streaming service (Xbox Cloud), the acquisition has been followed with suspicion by regulators around the world since the announcement. The European Commission, among others, has expressed concern about the possibility that competition in the gaming sector could be severely restricted as a result. So the commission launched an investigation, which was due to conclude by 11 April.

In a conversation behind closed doors, Brad Smith, Vice President and President at Microsoft, addressed the panel. Representatives from Google and Sony, among others, were also heard today. Sony is one of the biggest opponents of the acquisition, as the company, which publishes PlayStation gaming hardware, fears it may miss out on some important games in the future. For example, Microsoft may decide not to release a popular game on PlayStation. There is no escape, says Brad Smith at a news conference in Brussels attended by Data News. “We’re not going to spend that much money to make titles like Call of Duty more accessible,” said Smith. We’ll spend money on that. We want to use this acquisition to bring more games to more people.”

Microsoft’s argument is that it opens up games to different platforms. To support this argument, Smith shows the deals he’s had with other services. Microsoft has agreements with Nintendo to, among other things, bring Xbox games to the Switch game console for ten years. Should Activision’s acquisition of Blizzard King go ahead, a series of ABK games will also be added, presumably including games like Call of Duty. A deal with Sony was proposed in December, but the Japanese tech giant is holding back at the moment.

Remarkably, Microsoft also entered into an agreement with Nvidia on Tuesday. This company, best known for its graphics cards, is a competitor to Microsoft’s game streaming service in terms of cloud gaming. Starting today, Microsoft will bring its Xbox games to the Nvidia Geforce Now cloud streaming service. If the acquisition is approved, ABK titles will also be available on the streaming service. “This is how we approach a range of questions that regulators are asking,” said Brad Smith.

How wide is the gaming market

The argument Microsoft makes before the panel is, among other things, that the Xbox sells less well than the PlayStation. In Europe, about 80% of the next-generation heavyweight game consoles sold are from Sony, compared to 20% for the Xbox. This suggests that Microsoft is the small player here, but these stats don’t take into account other consoles, such as the Nintendo Switch, nor do PC games, cloud streaming, or mobile games. And let the ABK acquisition give a tech giant like Microsoft more control over content for platforms like streaming services and PCs, platforms where Sony doesn’t have a finger right away.

Thus, the question is whether Microsoft will heed these arguments. In other words, will the EC look at the specific market for the next gen consoles, or at the broader gaming market with different platforms. Tuesday’s hearing comes two weeks after Britain’s competition watchdog, the CMA, announced the preliminary findings of its in-depth investigation. That regulator ruled that the takeover could drive up prices and reduce supply to British players. In December, the US Competition Authority, the FTC, had already launched legal action to block the deal. “I’m an optimist,” says Smith in Brussels. “We have shown that we are ready to make agreements and adjustments.”

A little over a year ago, Microsoft announced that it would buy Activision Blizzard for $68.7 billion. It’s instantly the largest acquisition in Microsoft’s history, and with this deal, the tech giant will take over one of the world’s largest game publishers. Activision Blizzard King (ABK) owns the popular games ‘Call of Duty’ and ‘Overwatch’, as well as ‘Candy Crush’ and a host of other highly successful mobile games. Since Microsoft also operates its own gaming platform with the Xbox game console, and its own game streaming service (Xbox Cloud), the acquisition has been followed with suspicion by regulators around the world since the announcement. The European Commission, among others, has expressed concern about the possibility that competition in the gaming sector could be severely restricted as a result. So the commission launched an investigation, which was due to conclude by 11 April. In a conversation behind closed doors, Brad Smith, Vice President and President at Microsoft, addressed the panel. Representatives from Google and Sony, among others, were also heard today. Sony is one of the biggest opponents of the acquisition, as the company, which publishes PlayStation gaming hardware, fears it may miss out on some important games in the future. For example, Microsoft may decide not to release a popular game on PlayStation. There is no escape, says Brad Smith at a news conference in Brussels attended by Data News. “We’re not going to spend that much money to make titles like Call of Duty more accessible,” said Smith. We’ll spend money on that. We want to use this acquisition to bring more games to more people. Microsoft’s argument is that it just opens games on different platforms. To support that argument, Smith lays out the deals it has with other services. Microsoft has agreements with Nintendo to, among other things, bring Xbox games to the Switch game console for ten years. In If Activision’s acquisition of Blizzard King goes ahead, ABK’s series of games will also be added, presumably to include games like Call of Duty.A deal with Sony was proposed in December, but the Japanese tech giant is holding back at the moment. To consider, Microsoft also entered into an agreement with Nvidia on Tuesday. This company, which is best known for its graphics cards, is a competitor to Microsoft’s game streaming service in terms of cloud games. Starting today, Microsoft will bring its Xbox games to the cloud streaming service Nvidia Geforce Now If the acquisition is approved, ABK titles will also be available on the streaming service.“This is how we approach a host of questions that regulators are asking,” Brad Smith said, Microsoft’s argument before the committee. It is, among other things, that Xbox sells less well than PlayStation. In Europe, about 80% of the next-generation heavyweight game consoles sold are from Sony, compared to 20% for the Xbox. This suggests that Microsoft is the small player here, but these stats don’t take into account other consoles, such as the Nintendo Switch, nor do PC games, cloud streaming, or mobile games. And let the ABK acquisition give a tech giant like Microsoft more control over content for platforms like streaming services and PCs, platforms where Sony doesn’t immediately have a finger in the pie. So the question is whether Microsoft will listen to these arguments. In other words, will the EC look at the specific market for the next gen consoles, or at the broader gaming market with different platforms. Tuesday’s hearing comes two weeks after Britain’s competition watchdog, the CMA, announced the preliminary findings of its in-depth investigation. That regulator ruled that the takeover could drive up prices and reduce supply to British players. In December, the US Competition Authority, the FTC, had already launched legal action to block the deal. “I’m an optimist,” says Smith in Brussels. “We have shown that we are ready to make agreements and adjustments.”