Microsoft Corporation (NASDAQ:MSFT), maker of the Xbox, faces a potentially tall order today — convincing European Union regulators that its proposed US$69bn acquisition of Activision Blizzard Inc (NASDAQ:ATVI) (Activision Blizzard Inc (NASDAQ:ATVI)) will increase competition in the video game sector rather than reduce it.
At the crux of the matter is Call of Duty, Acitvision’s massively popular first-person shooter.
Opponents of the deal, including Microsoft rival Sony, which makes Playstation consoles, want the deal blocked on the grounds that games like Call of Duty could be restricted to Microsoft’s Xbox Game Pass platform.
The closed hearing is expected to be attended by Microsoft President Brad Smith and Xbox head Phil Spencer, along with Activision chief executive Bobby Kotick, Sony gaming chief Jim Ryan and a bevvy of representatives from Google, Nvidia, Valve, Electronic Arts, the European Games Developer Federation and others, according to Reuters.
Microsoft has attempted to take a bite out of those criticisms by announcing a 10-year deal with fellow video games giant Nintendo that would make Call of Duty and other games available to its users at the same time the game is released on Xbox.
The deal, first unveiled in December, is likely meant to pressure Sony into accepting a similar agreement.
That’s an option available to them, according to Xbox’s Smith but Sony’s Ryan called a previous Microsoft offer to keep Call of Duty on its consoles “inadequate on many levels.”
Microsoft shares traded 1% lower in premarket trading in New York.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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