Microsoft's Brad Smith and Phil Spencer brief the media afer a closed hearing at the European Commission
Microsoft is speaking to the media following a closed hearing at the European Commission, as the tech giant tries to convince the regulator to approve its bid to buy Activision Blizzard.
The deal is facing opposition from regulators in Europe, UK and US.
If you’re a bit lost around what’s going on, let’s recap.
- Microsoft propsed to buy Activision Blizzard in January in a deal worth $68.7bn
- The deal is currently getting approved from global competition regulators, but the three main regulators in the US (the Federal Trade Commission), Europe (the European Commission) and the UK (the Competition and Markets Authority) are currently opposed to the deal
- The US process requires the FTC to take Microsoft to court to block the deal, which it is currently doing.
- For the UK and Europe, Microsoft needs to convince these regulators that the deal is not anti-competitive by proposing remedies that alleviate their concerns around the deal.
- The first concern is around Call of Duty and what might happen if the game is exclusive, or better, on Xbox compared with PlayStation. PlayStation argue that this would cause a large number of players to leave its platform for Xbox.
- The second concern is around the growth of video game subscriptions and the potential of video game streaming. Microsoft already holds a strong position in these spaces with Game Pass and Xbox Game Streaming, and has other advantages including the Azure cloud platform and its Windows PC operating system. Regulators are concerned about Microsoft being dominant in these markets, which may prove more significant in the future.
- Microsoft’s biggest counter to these concerns is the promise to keep Call of Duty, with content parity, on PlayStation for ten years. It has also promised to release the game on Nintendo consoles, too. It has also pledged to keep releasing the game on PC via the Steam distribution service.
Today, Microsoft will be making its case to the European Commission at a closed hearing, attended by major companies including PlayStation, Nvidia and Google, alongside various other games businesses.
Our live coverage of this event has finished.
Brad Smith is on stage right now to brief the media. He’s reminding us that they’ve promised to make Call of Duty on Nintendo consoles.
Brad Smith at Microsoft has announced a new deal with Nvidia, that will bring Call of Duty and all Xbox games (that are on PC) to its services. “Nvidia’s GeForce Now service already has 25 million” players, Smith says.
Microsoft will be bringing its Xbox games, that play on PC, to Nvidia’s Geforce service. If the deal is approved, it will bring Activision Blizzard’s games to GeForce Now, too, including Call of Duty.
Microsoft is now listing all the companies and organisations that support the Activision Blizzard deal. Including Nvidia, Valve, and more.
Microsoft says it is ‘more than ready’ to answer regulator concerns.
Brad Smith says: “Think about the market in Europe. It is a market where Sony has an 80% share. Globally, it is about 70/30. In Japan, it is 96/4. These numbers have been remarkably steady for two decades. Even last year, when there were issues with Sony’s supply chain, they came back strong.”
Sony outsold Microsoft by 69/31 towards the end of last year.
Brad Smith: “Regulators is not here to protect super dominant companies. Believe me, I know.”
We are bringing Call of Duty to 150 million more people who don’t get it today, says Microsoft’s Brad Smith
Brad Smith says Microsoft has deep and long experience of delivering on remedies to get satisfy the EU, citing past acquisitions like LinkedIn.
We have come here to make this kind of solution work, he says.
“We haven’t agreed a deal with Sony, but I hope we will.”
Smith says he has an envelope in his pocket with the deal on paper.
“I hope today is a day that will advance our industry and regulation in a responsible way.”
Sony can spend all its energy trying to block this deal, which will reduce competition and slow the evolution of the market. Or they can sit down with us, and hammer out a deal.
Smith: Sony says Call of Duty is a must-have product, but that ‘must have title’ was only available on 120 million devices. And if this deal goes through, it’ll be available on 150 million more devices.
Smith says he’s more optimistic about the deal going through because of the deals with Nvidia and Nintendo.
There’s only one barrier to stopping this deal going through, Smith says. It’s the regulators.
Activision Blizzard has accused Sony of simply trying to “protect its two-decade dominance in video games”, and believes the proposed merger will enhance competition and “create greater opportunities” for workers
We don’t think it’s realistic that one part of this company can be carved out from the rest, says Brad Smith, responding to a question about whether they would consider selling the brand to get the deal over the line.
Smith is talking about multi-platform gaming, and the fact Call of Duty needs to run well on all consoles, including Nintendo Switch.
Brad Smith says he ‘has to believe the future is cross-platform’, which is what this deal is all about.
The number one concern that people have expressed about this acquisition is that Call of Duty will be less available to people, what we have proved is the opposite will be true. And if this deal is approved, the game will be available to 150 million more players around the world.
That was a Brad Smith quote, as he wraps-up his press conference. That was it.
To recap, Microsoft has signed a deal with Nvidia and Nintendo to bring Call of Duty to GeForce Now and Nintendo Switch consoles. It will also bring all Xbox games (that are on PC) to GeForce Now. Sony, however, remains opposed to the deal and will not sign the agreement.
That’s it! Stay tuned to GamesIndustry.biz for more over the coming weeks.
Christopher Dring
Head of Games B2B
Chris is a 15-year media veteran specialising in the business of video games. And, erm, Doctor Who
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