Microsoft and Nvidia announce 10-year partnership to reassure regulators about Activision merger

Microsoft has struck a 10-year deal to bring Call of Duty and other Activision games to Nvidia’s gaming platform if maker Xbox is allowed to complete its hotly contested $69 billion (about $5,71,468) acquisition. rupees) from Activision.

Regulators and competitors like Sony have spoken out against the proposed Microsoft-Activision tie-up. The move could assuage concerns by giving consumers more ways to have gaming controlled by Microsoft, but regulators around the world are skeptical of the acquisition.

Britain earlier this month said the deal could hurt gamers by weakening the rivalry between Xbox and PlayStation, leading to higher prices, less choice and less innovation for millions of gamers. , as well as stifling competition in cloud gaming.

Microsoft President Brad Smith told a press conference on Tuesday that he was now more optimistic that the Activision acquisition would be completed after the deal with Nvidia and a similar deal with Nintendo.

Phil Eisler, vice president and general manager of Nvidia’s GeForce Now segment, said titles such as Call of Duty won’t be available on Nvidia’s service unless Microsoft acquires Activision, but other titles owned by Microsoft such as Minecraft are immediately covered by the 10-year license agreement.

“We were a little apprehensive at first,” Eisler said of the Microsoft-Activision deal. “But then we reached out to Microsoft, and they were very open about wanting to enable cloud gaming and working with us on a 10-year licensing agreement. So over time, they gave back to us. more and more comfortable with it.

Eisler said Nvidia does not pay Microsoft for access to titles, which is the same agreement the company has with other game companies such as Fortnite maker Epic Games. Instead, Nvidia’s 25 million customers will have to pay Nvidia to access its cloud gaming platform and pay Microsoft for its games.

Shares of Microsoft fell 2%, Nvidia 3.4% and Activision 0.7% in a broadly lower market on Tuesday afternoon.

Nvidia said it now supports maker Xbox’s bid to buy Activision, but the deal could still be a tough sell with regulators. European officials issued a warning to Microsoft about the deal earlier this month, while the US Federal Trade Commission asked a judge to block it. The UK competition watchdog says Microsoft may have to divest Call of Duty.

Smith said he hopes rival Sony would consider entering into the same type of deal with Nvidia.

Sony led opposition to the Microsoft-Activision deal, saying last year it was “bad for competition, bad for the games industry, and bad for gamers themselves.”

Besides Sony and Nvidia, other companies, including Alphabet’s Google, have raised concerns with the FTC about the deal, according to media reports.

Microsoft has committed to keeping Call of Duty on Sony’s PlayStation. The first-person shooter franchise’s popularity hasn’t waned nearly two decades since its launch, with the latest installment hitting $1 billion in sales in its first 10 days in October.

The US tech giant said the deal is not limited to Call of Duty. He said buying the company, which also makes Overwatch and Candy Crush, would boost its growth in mobile, PC and cloud games, as well as consoles, helping it compete with Tencent and Sony.

© Thomson Reuters 2023