Google and NVIDIA backed Sony’s stance by raising concerns with the US Federal Trade Commission (FTC) over Microsoft’s likely purchase of games giant Activision Blizzard, fueling a state lawsuit over a $69 billion deal in question, Bloomberg reported, citing sources. Familiar with the situation”
The FTC took action to block the deal back in December last year on the pretext that such a takeover would hamper competition in the video game industry. Internal hearings are scheduled for August this year. Representatives of the respective companies are called as witnesses. Google and NVIDIA have reportedly provided information supporting the FTC’s claim that Microsoft may gain an unfair advantage in the cloud, mobile, and subscription gaming markets. NVIDIA emphasized the need for equal access to games, but did not openly deny the purchase.
The Activision acquisition was first announced almost a year ago, when Microsoft was looking to revitalize its gaming business by adding blockbusters like Call of Duty and World of Warcraft to its portfolio. However, regulators believe such measures could make it harder for competitors to access Activision’s most popular games. According to Bloomberg, after the agency released the latest news, Activision’s stock fell from $95 to $76.75, while Microsoft’s stock price barely changed.
Both Google and NVIDIA are serious players in the industry. The latter produces popular graphics cards not only for ordinary users, but also for the GeForce Now service, while Google competes with Microsoft in the cloud services segment and owns the Stadia gaming service, which stopped working this month. In addition, the Android platform is the main platform for millions of people to enjoy gaming. Sony is competing with Microsoft in the console market and says the deal to buy Activision won’t be competitive.
Microsoft has previously announced that it has reached a 10-year agreement with Nintendo to provide access to Call of Duty for the company’s gaming platforms, and has agreed to release future versions of the game on Valve’s Steam platform – concurrently with their release for Xbox. “We want people to have more access to games, not less” – already said in Microsoft.
However, the new evidence will add weight to arguments that suggest Microsoft could increase the amount of exclusive content available to Xbox Game Pass users through the deal, which is already leading the gaming subscription market. Microsoft itself argues that regulators are giving too much weight to Sony’s statements, which are simultaneously raising alarms and complaining to regulators in many regions.
Microsoft believes Sony is “overestimating” the importance of the Activision catalogue. At the same time, Microsoft is offering personal deals to various market participants. So she’s already offered the Call of Duty franchise 10-year access to PlayStation consoles. In addition, the offer is said to include the right to host games on Sony’s subscription services.
Just how important everything is in the cloud gaming space is illustrated by the fate of the Google Stadia service, which never caught on. NVIDIA, which launched its own GeForce Now service in 2020, now has 20 million subscribers, allowing even weak devices like Chromebooks or handheld electronics to be used for resource-intensive gaming.
Still, it’s nothing compared to the Xbox Game Pass subscription, which also includes cloud gaming on the Ultimate plan. The service has over 25 million subscribers. When the deal with Activision closes, it will be even more attractive for users.