Brussels, February 21 (Reuters) – If the $69 billion acquisition of Activision by Microsoft Corp. (MSFT.O), the maker of the Xbox, is allowed, Microsoft Corp. (MSFT.O) will sign a 10-year agreement to bring “COD” and other Activision (ATVI.O) titles to Nvidia Corp.’s (NVDA.O) gaming platform.
The proposed Microsoft-Activision merger has received strong opposition from regulators and rivals like Sony. Although regulators worldwide have expressed skepticism about the acquisition, the move may ease worries by providing users with more options for Microsoft-controlled games.
Britain warned earlier this month that the merger could hurt gamers by lessening the competition between Xbox and PlayStation, which would drive up costs, limit player options, and stunt innovation for millions of gamers. It could also stifle competition in the cloud gaming market.
After the Nvidia agreement and a comparable agreement with Nintendo Co. Ltd., Microsoft President Brad Smith stated at a news conference on Tuesday that he was now more optimistic about completing the Activision acquisition.
Other Microsoft-owned games, like “Minecraft,” are covered right away by the 10-year licence agreement, according to Phil Eisler, vice president and head of Nvidia’s GeForce Now division. However, games like “Call of Duty” won’t be accessible on Nvidia’s service until Microsoft acquires Activision.
The Microsoft-Activision agreement “was something we were a little apprehensive about at first,” Eisler admitted. “But after that, when we contacted Microsoft, they wanted to make cloud gaming possible and collaborate with us on a 10-year license deal. As a result, they gradually increased our level of comfort.”
Like other gaming companies like Epic Games, the developer of “Fortnite,” Eisler, claimed Nvidia is not charging Microsoft for accessibility to the titles. Instead, the 25 million users of Nvidia’s cloud gaming platform will have to pay both Nvidia and Microsoft for their games.
In a generally lower market on Tuesday afternoon, shares of Microsoft fell by 2%, Nvidia by 3.4%, and Activision by 0.7%.
The acquisition of Activision by the creator of Xbox has Nvidia’s support, but regulators may still be reluctant to approve the deal. Microsoft could be forced to sell off “Call of Duty,” according to the British antitrust watchdog. Microsoft received a warning about the deal from European officials earlier this month, and the US Federal Trade Commission has urged a judge to halt it.
Smith hoped that Nvidia’s rival Sony Group Corp would consider entering into a similar arrangement.
Since last year, Sony has taken the lead in speaking out against the Microsoft-Activision merger, claiming it is “terrible for competition, awful for the gaming industry, plus terrible for gamers themselves as well.”
Several businesses, besides Sony and Nvidia, have complained to the FTC about the acquisition, according to media reports, including Alphabet Inc.’s (GOOGL.O) Google.
Microsoft has promised to continue to support “Call of Duty” on Sony’s PlayStation. Nearly twenty years after its inception, the first-person shooter franchise’s popularity hasn’t diminished, with the most recent entry selling $1 billion in its first 10 days in October.
According to the American technology giant, the agreement involves more than “Call of Duty.” It has claimed that acquiring the business that also develops “Overwatch” and “Candy Crush” will accelerate its expansion into console, PC, mobile, and cloud gaming, enabling it to compete with companies like Tencent (0700. HK) and Sony.
