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Microsoft to finalize Activision Blizzard acquisition

Microsoft Store sign., tags: activision - unsplash

Microsoft has made significant progress toward completing its $69 billion acquisition of Activision Blizzard.

EU regulators are expected to decide on Microsoft’s Activision merger by April 25, which indicates that the company’s last-minute license deals with Nintendo and Nvidia may have helped Microsoft earn favor in Europe.

According to Reuters, the European Commission of the European Union would not require Microsoft to sell any Blizzard assets in exchange for regulatory approval.

The sale of Call of Duty has been the subject of conflict since Microsoft wishes to keep the property while using licensing agreements to appease regulators.

If the purchase is completed, however, Microsoft has pledged to maintain the franchise’s availability across multiple platforms for at least ten years.

A Microsoft spokesperson told Reuters that it is committed to providing “long-term 100% equal access to Call of Duty to Sony, Steam, NVIDIA, and others,” preserving the deal’s benefits to gamers and developers while increasing market competition.

The 10-year-agreement means that titles from Blizzard, including CoD, Warcraft, StarCraft, Diablo and Overwatch, will be playable on the Nintendo Switch and any other systems developed by Nintendo in the future.

It also allows Nvidia to distribute Blizzard games through its Nvidia Geforce Now cloud gaming service.

Nvidia initially opposed the deal but agreed to move forward after negotiations with Microsoft.

Sony’s opposition

Previously, in January 2022, Microsoft said the agreement would allow the company to compete with industry titans like Tencent and Sony while building its version of the metaverse.

At the time, Microsoft CEO Satya Nadella said that games would play a significant role in the evolution of metaverse platforms because they represent “the most dynamic and exciting category of entertainment across all platforms.”

“Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms.”

Satya Nadella, CEO of Microsoft

Sony was offered a 10-year CoD deal, but the company opted not to take advantage of the opportunity. Then, PlayStation’s CoD deal with Activision will expire in 2024, putting Sony in a precarious position regarding the popular shooter franchise.

Sony continues to oppose the deal, and it is not alone — the deal has also been challenged by the US Federal Trade Commission and is being reviewed by the Competition and Markets Authority in the United Kingdom.

If Microsoft successfully passes the FTC and CMA, it will add Blizzard’s game library to its Xbox console, PC lineup and Xbox Game Pass cloud gaming platform.

According to the Japanese firm, Microsoft wants to coerce Blizzard into making their games exclusively available on the Xbox One to convert PlayStation users to the Xbox platform.

Sony is concerned that even if they sign a 10-year agreement, Microsoft will stop sharing its games with Sony. The company’s concern about Microsoft’s acquisition of Blizzard is not without reason.

After Microsoft’s 2021 acquisition of Zenimax, the parent business of Bethesda, the developer of “Fallout” and “The Elder Scrolls,” Microsoft announced that “Starfield,” Bethesda’s first new franchise in than 20 years, would be a PC and Xbox exclusive.

Cloud gaming

There has been a lot of hype surrounding cloud gaming recently, but the technology is still in its infancy. Cloud gaming allows players to stream and play games on everything, from their smartphones and smart TV to their tablets and Chromebook.

Microsoft has an advantage over Sony, Nvidia, Nintendo and Amazon, which runs its own Luna cloud gaming service, because of its superior cloud computing capabilities.

Microsoft can undercut competitors’ pricing on its cloud gaming service by using the money it makes from its other commercial products to subsidize the service.