Monday, September 25

Microsoft: Microsoft defends $69bn Activision Blizzard deal: What happened, who said what and more

Microsoft went all in to save its $68.7 billion acquisition of Call of Duty maker Activision Blizzard in Europe. Apart from trying to orally convince the EU regulators about offering multi-year deals to other platforms, Microsoft also announced two quick deals with Nintendo and Nvidia in a bid to counter regulators’ concerns. Here are the highlights of what happened at the hearing.
Microsoft secures two allies
Microsoft announced two deals on the day: The first is a 10-year deal with Nintendo where Call of Duty will be available on the console. The game makes a comeback on the platform after a 10-year hiatus.
The second 10-year deal was announced after Microsoft President Brad Smith met with European Union officials. The executive said that, effective immediately, its Xbox games will be available on Nvidia’s GeForce Now cloud games service and it will bring all Activision Blizzard titles (like Candy Crush and Call of Duty) to the platform if the deal goes through.

“Combining the incredibly rich catalogue of Xbox first-party games with GeForce Now’s high-performance streaming capabilities will propel cloud gaming into a mainstream offering that appeals to gamers at all levels of interest and experience. Through this partnership, more of the world’s most popular titles will now be available from the cloud with just a click, playable by millions more gamers,” Jeff Fisher, Nvidia’s senior vice president for GeForce, was quoted as saying.
‘Call of Duty to become valuable over time’
Smith rejected regulators’ and Sony‘s concerns post-acquisition, Activision Blizzard games, especially Call of Duty, might become restricted to Xbox.
“This has never been about spending $69 billion so we could acquire titles like Call of Duty and make them less available. That’s not a great way to turn a $69 billion asset into something that will become more valuable over time,” he said after the hearing.

Microsoft targets Sony
Smith also compared both Microsoft and Sony’s gaming divisions saying that Sony is a “super dominant company” that is outselling Xbox consoles and opposes competition in the form of the Activision acquisition. Smith even questioned the UK’s Competition and Markets Authority (CMA), which raised concerns similar to Sony’s.
“Do you want to kill a deal and cement Sony’s position and its 80% share in the European Economic Area… or do you want to let the future go forward with behavioural guardrails and remedies and bring this title to 150 million more people. I think that’s the fundamental choice that most regulators are going to need to address,” asked Smith.
He pointed out that when Sony suffered supply chain constraints last year and saw its numbers dip, they came back strong.
“In the fourth quarter as their supply chain recovered, by our calculation on a global basis, Sony outsold Microsoft in the fourth quarter by a margin of 69 to 31. Pretty much consistent with the global market shares we’ve seen for 20 years,” he said.

The Microsoft president also said, “I walk around with an envelope that contains the definitive agreement that we sent Sony two days before Christmas.” He said the companies will reach an agreement with Sony over Call of Duty.
Activision Blizzard is hopeful
“We are confident regulators will find that our proposed merger will enhance competition and create greater opportunities for workers and better games for our players,” Activision Blizzard said in a statement.
It is to be noted that Microsoft’s proposed Activision Blizzard deal is the company’s largest ever and one of the 30 biggest acquisitions of all time.

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