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Microsoft one step closer to finalizing Activision deal

by SuperiorInvest

Microsoft (MSFT) agreed to provide Nvidia (NVDA) and Nintendo (NTDOY) access to the “Call of Duty” franchise, its latest effort to convince European and U.S. regulators that the games will remain competitive if officials allow them to acquire the game’s publisher, Activision Blizzard (ATVI).

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

Key things

  • Microsoft has finalized a deal with Nvidia and Nintendo that will grant competitors access to the popular “Call of Duty” franchise for 10 years.
  • EU and US antitrust regulators fear Microsoft’s $69 billion acquisition of Activision will harm competition; The FTC sued to block the acquisition in December.
  • Nvidia officials say the deal eases their concerns about the acquisition.

The deal is the latest in an eleventh-hour public relations campaign by Microsoft to win approval for the proposed acquisition – the biggest tech acquisition ever, if successful – from regulators in the US, UK and EU.

The The FTC filed the complaint in December to block the acquisition, which it said would allow Microsoft to “harm competition in high-performance gaming consoles and subscription services by denying or impairing competitors’ access to its popular content.” The agency’s British counterpart said Microsoft may have to get rid of “Call of Duty” due to concerns about competition in the market.

EU antitrust officials met with Microsoft president Brad Smith and representatives of rivals Sony and Google in a closed-door meeting on Tuesday. European regulators are expected to make a decision by April 11.

“We were a little concerned about it at first,” Nvidia GeForce Now vice president Phil Eisler said of the deal. “But then we approached Microsoft, and they were very open about enabling cloud gaming and working with us on a 10-year license agreement. Over time, they made it more and more comfortable for us.”

Sony, the maker of PlayStation and Microsoft’s biggest game console rival, is still working to convince antitrust regulators to block the deal.

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