Microsoft’s (MSFT) $69 billion acquisition of Activision Blizzard is seemingly one step closer to becoming a reality. According to Reuters, the European Union’s European Commission will likely approve the blockbuster deal after Microsoft made concessions to both Nvidia (NVDA) and Nintendo (NTDOY).
In February, Microsoft announced it reached agreements with Nintendo and Nvidia to bring its games, including the wildly popular “Call of Duty” to the competitors’ platforms for the next 10 years.
For Nintendo that means Activision Blizzard games like “Call of Duty” will be available on its Switch and future consoles. Nvidia, meanwhile, will be able to offer “Call of Duty” and other Activision Blizzard titles via its Nvidia Geforce Now cloud gaming platform. Nvidia opposed the acquisition until the last-minute deal with Microsoft.
The crux of the deal is “Call of Duty,” one of the most popular game franchises in the world. The most recent edition of the series, “Call of Duty Modern Warfare II,” reached $1 billion in sales in its first 10 days on the market.
Sony contends that Microsoft plans to make Activision Blizzard’s titles Microsoft exclusives, in an attempt to get PlayStation users to switch to Microsoft’s Xbox platform. Even if Microsoft enters a 10-year sharing agreement with Sony, the gaming giant fears Microsoft will just pull its games back after the arrangement expires.
After Microsoft acquired Zenimax, the parent company of “Fallout” and “The Elder Scrolls” developer Bethesda in 2021, the company announced that Bethesda’s first new franchise in more than 20 years, “Starfield” will be an Xbox and PC exclusive.
Given the massive popularity of “Fallout” and “The Elder Scrolls,” it’s little wonder why Sony is more than wary of Microsoft’s Activision Blizzard acquisition.
If Microsoft manages to get past both the FTC and CMA, it will add Activision Blizzard’s arsenal of games to not only its Xbox console and PC lineup, but its Xbox Game Pass cloud gaming platform.
Cloud gaming, which allows you to stream and play games to everything from your smartphone and smart TV to your tablet and Chromebook, is still in its early stages. But with its enormous cloud computing capabilities, Microsoft has an edge over the likes of Sony, Nvidia, Nintendo, and Amazon (AMZN), which operates its own Luna cloud gaming service.
Microsoft also has the financial muscle to undercut competitors on pricing by subsidizing its cloud gaming service via the cash it brings in through its business products.
The company still has to get past major roadblocks, and even the E.U.’s approval still isn’t guaranteed. But if it does break through, it could upend the gaming industry for years to come.
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