Regulators and competitors like Sony have come out hard
against the proposed Microsoft-Activision tie-up. The move may allay concerns
by ensuring more ways for consumers to get games controlled by Microsoft, but
regulators around the world have been sceptical about the acquisition.
Britain, earlier this month, said the deal could harm gamers
by weakening the rivalry between Xbox and PlayStation, resulting in higher
prices, fewer choices and less innovation for millions of players, as well as
stifling competition in cloud gaming.
Microsoft President Brad Smith told a news conference on
Tuesday he was now more optimistic about getting the Activision acquisition
done after the Nvidia deal and a similar arrangement with Nintendo.
Phil Eisler, vice president and general manager of Nvidia's
GeForce Now segment, said that titles such that Call of Duty will not be
available on Nvidia's service unless Microsoft acquires Activision but that
other Microsoft-owned titles such as Minecraft are covered immediately under the
10-year license agreement.
“We were a little concerned about it at the beginning,”
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
work with us on a 10-year license agreement. So over time, they made us more
and more comfortable with it.”
Eisler said Nvidia is not paying Microsoft for access to the
titles, which is the same arrangement the company has with other gaming
companies such as Fortnite maker Epic Games. Instead, Nvidia's 25 million
customers will need to pay Nvidia for access to its cloud gaming platform and
pay Microsoft for its games.
Shares of Microsoft fell 2 percent, Nvidia dropped 3.4
percent, and Activision fell 0.7 percent in a broadly lower market on Tuesday
afternoon.
Nvidia said it now supports the Xbox maker's bid to purchase
Activision, but the deal could still be a hard sell with regulators. European
officials issued Microsoft a warning about the deal earlier this month, while
the US Federal Trade Commission has asked a judge to block it. The British
competition watchdog has said Microsoft may have to divest Call of Duty.
Smith said he hoped that rival Sony will consider doing the
same type of deal with Nvidia.
Sony has led opposition to the Microsoft-Activision deal,
saying last year it was “bad for competition, bad for the gaming industry, and
bad for gamers themselves.”
Apart from Sony and Nvidia, other companies including
Alphabet's Google had expressed concerns to the FTC about the deal, according
to media reports.
Microsoft has pledged to keep Call of Duty on Sony's
PlayStation. The popularity of the first-person shooter franchise is undimmed
nearly two decades after launch, with the latest instalment achieving $1
billion in sales in its first 10 days in October.
The U.S. tech giant has said the deal is about more than
Call of Duty. It has said buying the company that also makes Overwatch and
Candy Crush would charge its growth in mobile, PC, and cloud gaming, as well as
consoles, helping it compete with the likes of Tencent as well as Sony. ©
Reuters 2023
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