Microsoft’s pending $68.7 billion acquisition of Activision-Blizzard has been a highly debated topic in recent times. The conversation around the deal only appears to be intensifying, particularly after Microsoft’s recent meeting with EU regulators. During the meeting, Microsoft looked to make its case, mostly countering Sony’s opposition to the deal. One of the biggest points about the Activision purchase pertains to the potential implications for the Call of Duty franchise.
Sony argues that the acquisition would grant Microsoft too much control over a franchise like Call of Duty and the potential restrictions may give the company an unfair advantage. However, Microsoft counters this argument claiming that it’s not in the company’s best interest to restrict access to Activision-Blizzard properties and that it remains committed to continuing offering Call of Duty and other IPs to other platforms. In fact, the tech giant has explicitly stated that Microsoft offered to continue bringing Call of Duty to PlayStation for the foreseeable future in a long-term agreement.
Rallying Support from Nvidia and Nintendo for Microsoft's Acquisition
Now, in what looks to be the latest attempt at gaining support for the acquisition, Microsoft announced that the company is partnering up with Nintendo, just as the Xbox maker met with EU regulators recently. Accordingly, the 10-year agreement will bring Call of Duty to Nintendo players on the same day as Xbox, with full feature and content parity. While Microsoft has assured Call of Duty’s performance on Nintendo, the company is yet to share more details on the specifics of the deal.
But Nintendo wasn’t the only partnership Microsoft made public during the week. Merely hours after, the company announced that Microsoft partnered up with Nvidia in another 10-year agreement. As per the deal, Microsoft will be bringing its Xbox PC games to Nvidia GeForce Now. This means that players can either buy Xbox PC games on the Windows Store or from third-party stores like Epic Games and Steam to stream via GeForce Now. While the agreement covers Xbox PC games in general, the announcement specifically singles out Call of Duty as a title that will be made available on the platform as a result of its Nvidia partnership.
Sony vs Microsoft
This is likely a calculated move from Microsoft in an effort to entice the regulators in the company’s favor. Of course, while the tech giant has managed to sway support from the likes of Nvidia and Nintendo, it still hasn’t been able to gain its most vocal opposer’s favor. Microsoft has been repeatedly trying to convince Sony that Call of Duty will remain on the platform for years to come. However, the two companies haven’t managed to agree on terms. At a recent press event in Brussels, Microsoft President Brad Smith even claimed that its own 10-year agreement with Sony remains unsigned and that the company is still willing to negotiate terms with the PlayStation maker. Incidentally, this comes at a time when Sony’s PlayStation deal with Activision-Blizzard is almost at an end.
So far, PlayStation CEO Jim Ryan has called Microsoft’s Call of Duty agreement “inadequate on many levels,” though details of the potential deal, in particular, haven’t been made public. Previously, the company has also claimed that Microsoft’s information requests amount to harassment. Microsoft has also pointed the finger at Sony, accusing the company pays off developers to keep games from Xbox Game Pass. Even at its recent Brussels event, Brad Smith inquired if the regulators would rather “kill a deal and cement Sony’s position and its 80 percent share in the European Economic Area” as opposed to letting the “future go forward with behavioral guardrails and remedies” to bring Call of Duty to 150 million more people.
Microsoft’s Supporters for the Activision-Blizzard Deal
Although hostilities between the two companies seem to be ongoing, Sony isn’t the only company that has opposed or raised concerns about the $68.7 billion acquisition. The UK’s CMA recently revealed that half of Xbox rivals are concerned about the Activision purchase. While it doesn’t name the opposing parties, both Nvidia and Google were reportedly concerned with the deal previously, though Nvidia has since turned in favor of Xbox.
Despite the vocal opposition, few others from the tech industry have come in support of the acquisition. Back in October 2022, Take-Two CEO Strauss Zelnick supported the Activision deal, claiming that Microsoft’s takeover will be a net positive to the industry and that it will help draw in more gamers to the market. Other industry players like Tencent and Meta have also shared similar sentiments, along with the Communications Workers of America (CWA) which believes the deal will yield better outcomes for workers and union-related matters.
Why Regulators are Still Question Microsoft's Acquisition
Despite the seemingly growing support for Microsoft, there are questions that still loom over the potential implications of the company gaining control over Activision-Blizzard. In December, the FTC sued to block the Activision acquisition claiming the deal would allow Microsoft to stifle competition. The regulator further mentioned that the acquisition could translate to Microsoft "manipulating Activision's pricing, degrading Activision's game quality or player experience on rival consoles and gaming services" as well as "changing the terms and timing of access to Activision's content, or withholding content from competitors entirely."
This was followed by the CMA’s own investigations on the pending deal. The UK regulator raises concerns over game exclusivity and cloud gaming. While Microsoft holds a commanding position in the cloud gaming market, the CMA points out that acquiring Activision may bump up Microsoft’s cloud gaming market share to about 60-70 percent.
The Impact of Nintendo and Nvidia's Support for Microsoft
Amid CMA’s ongoing efforts, the EU regulators have stated that a final decision regarding the Activision acquisition will be conveyed by April 11. As of now, it’s unclear how Microsoft’s deals with Nintendo and Nvidia will impact the regulatory decisions. It wouldn’t be out of the ordinary if the Xbox maker managed to forge more Call of Duty-related partnerships, especially since the tech giant has already gained approval from Brazil, Serbia, Saudi Arabia, and Chile regions. Reportedly, China will also approve Microsoft’s Activision purchase in the near future.
Regardless, it will be interesting to see how the events surrounding the Activision acquisition will pan out. Of course, support from both regional markets and industry players on the scale of Nvidia and Nintendo will likely skew things to Microsoft’s side. But the end decision and the answer to the question of too much power in Microsoft’s hands with Activision will fall onto the regulatory bodies.