Microsoft signs Nvidia game deal to calm regulators in the Activision merger. Microsoft reached a deal over a decade for the release of “Call of Duty” and other Activision games to the gaming platform of Nvidia in the event that the Xbox maker concludes its Activision acquisition.
Microsoft Corp. has struck an agreement for 10 years for the release of “Call of Duty” and other Activision games to the Nvidia Corp. gaming platform if Xbox maker is permitted to conclude its highly-contested $69 billion purchase of Activision.
Microsoft signs Nvidia game deal to calm regulators in the Activision merger
Regulators and other competitors such as Sony have come out against the planned Microsoft-Activision tie-up. The deal could ease worries by providing more avenues consumers can access games that are controlled by Microsoft however, regulators across the world are skeptical regarding the deal.
Britain earlier this month stated that the agreement could hurt gamers by weakening competition among Xbox and PlayStation which could result in higher costs, less options and less creativity for millions of gamers and also limiting the competition in cloud gaming.
Microsoft president Brad Smith told a news conference on Tuesday that he was looking forward to making the Activision acquisition accomplished following the Nvidia deal as well as a similar agreement in place with Nintendo Co Ltd.
Phil Eisler, vice president and general manager of Nvidia’s GeForce Now segment, told that games like “Call of Duty” will not be accessible on Nvidia’s service until Microsoft buys Activision but other Microsoft-owned games like “Minecraft” are covered immediately in the 10-year licensing agreement.
“We were a little concerned about it at the beginning,” Eisler stated about the Microsoft-Activision agreement. “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 stated that Nvidia does not pay Microsoft in exchange for the right to access its games, the same deal Nvidia is in with gaming firms, such for “Fortnite” maker Epic Games. Instead the company’s 25 million customers will have to pay Nvidia to access the cloud-based gaming platform as well as pay Microsoft for the games it offers.
The shares of Microsoft declined by 2%, Nvidia dropped 3.4% and Activision was down 0.7 percent in a generally lower market in the afternoon of Tuesday.
Nvidia announced that it has now backed the Xbox maker’s offer to buy Activision however, the deal may be difficult to deal for regulators. European officials gave Microsoft warnings regarding the deal in the last month, and officials from the U.S. Federal Trade Commission has requested a judge oppose the deal. The British competition regulator has suggested that Microsoft could be forced to exit “Call of Duty.”
Smith stated that he hopes that the rival Sony Group Corp. will be able to negotiate the same kind agreement with Nvidia.
Sony has led the opposition to the Microsoft-Activision merger in the past, claiming that the deal was “bad for competition, bad for the gaming industry and bad for gamers themselves.”
Other than Sony and Nvidia other companies like Google Inc.’s Google had expressed concerns to the FTC about the deal according to reports from the media.
Microsoft has committed to keeping “Call of Duty” on Sony’s PlayStation. The success for the shooter first person series remains unaffected almost two decades after its launch and the most recent installment having sold $1 billion within its initial 10 days in October.
The U.S. tech giant has stated that the deal is much more than “Call of Duty.” It has also said that purchasing the company behind “Overwatch” and “Candy Crush” could boost its expansion in PC, mobile, and cloud gaming and consoles, which will help it keep up with competitors like Tencent and Sony.