Microsoft One Step Closer to Completing Activision Deal After Nvidia Support

Merger would be largest in history of tech industry -- if it's approved

Call of Duty

Microsoft (MSFT) agreed to give Nvidia (NVDA) and Nintendo (NTDOY) access to the "Call of Duty" franchise, its latest effort to persuade European and U.S. regulators that gaming will remain competitive if officials allow it to acquire the game's publisher, Activision Blizzard (ATVI).

The 10-year deal struck on Tuesday will bring "Call of Duty" as well as other Activision and Xbox games to Nintendo devices and Nvidia's cloud-streaming service GEForce Now if Microsoft's $69 billion Activision acquisition is completed. Microsoft-published games will be available immediately on competitors' platforms.

Key Takeaways

  • Microsoft completed a deal with Nvidia and Nintendo that will guarantee the competitors access to the popular "Call of Duty" franchise for 10 years.
  • EU and U.S. antitrust regulators have worried Microsoft's $69 billion acquisition of Activision will hurt competition; the FTC sued to block the acquisition in December.
  • Representatives for Nvidia say the deal allays their fears about the acquisition.

The deal is the latest in Microsoft's eleventh-hour public relations campaign to get approval for its proposed acquisition—the largest tech acquisition ever, if successful—from regulators in the U.S., U.K., and EU.

The FTC filed a complaint in December to block the acquisition, which it says would enable Microsoft to "harm competition in high-performance gaming consoles and subscription services by denying or degrading rivals' access to its popular content." The agency’s U.K. counterpart has said Microsoft may have to divest “Call of Duty” over worries about market competition. 

E.U. antitrust officials met Microsoft President Brad Smith and representatives of competitors Sony and Google in a closed-door meeting Tuesday. European regulators are expected to make a decision by April 11.

"We were a little concerned about it at the beginning," Nvidia’s GeForce Now Vice President Phil Eisler said of the deal. "But then we reached out to Microsoft, and they were very open about wanting to enable cloud gaming and work with us on a 10-year license agreement. So over time, they made us more and more comfortable with it."

Sony, the maker of PlayStation and Microsoft's top gaming console rival, is still working to persuade antitrust regulators to block the deal.

Article Sources
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  1. Microsoft. "Microsoft and NVIDIA announce expansive new gaming deal."

  2. U.S. Federal Trade Commission. "FTC Seeks to Block Microsoft Corp.'s Acquisition of Activision Blizzard, Inc."

  3. European Commission. "Competition Policy - M.10646."

  4. Bloomberg. "Microsoft Wins Nvidia Support for Embattled Activision Deal."

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