Representatives from Microsoft made their best case to European regulators Wednesday that its proposed US$69bn takeover of Activision Blizzard would increase competition rather than tilt the scales toward its flagship Xbox consoles.
To do that, Microsoft vice chair Brad Smith pointed repeatedly to the fact that Xbox was bringing Call of Duty, the widely popular Activision franchise, to millions more players than previously had access.
Following the closed-door meeting with European watchdog organizations, along with executives from Activision, rival console maker Sony and industry stakeholders like Nvidia, Smith announced a deal with the chipmaker.
Xbox games that are playable on PC, notably including Call of Duty, will be made available on Nvidia's Geforce service. If approved, the deal would bring Call of Duty to 25 million GeForce Now users, Smith said.
Sony, who makes the PlayStation, opposes the deal on concerns that franchises like Call of Duty could become restricted to Xbox consoles, or at the very least blocked from Sony.
But Smith countered those concerts by pointing to Sony’s global market share.
"Think about the market in Europe. It is a market where Sony has an 80% share,” Smith said. “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."
"This has never been about spending $69bn so we could acquire titles like Call of Duty and make them less available," he added. "That's not a great way to turn a $69bn asset into something that will become more valuable over time."
Microsoft shares were up 1% in premarket trading in New York.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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