September 24, 2023

Brussels — Microsoft said on Tuesday that it would bring its Xbox PC games here nvidia’s cloud gaming service, after the chipmaker reportedly expressed opposition to a major Microsoft gaming deal.

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The announcement comes after Microsoft chairman Brad Smith met with European Union officials on Tuesday to assure them of its planned $69 billion acquisition. activism blizzard Will be good for competition.

Microsoft is offering an olive branch to prevent the acquisition from being blocked and thereby expand its gaming unit, which accounts for 9% of its total revenue. While sales of Microsoft’s Xbox console are slowing, the company is drawing on its cash pile to expand the collection of games it can sell and allow people to play through its cloud data centers.

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Microsoft President Brad Smith said at a press conference that, effective immediately, its Xbox games will be available on Nvidia’s GeForce Now cloud game service. Smith said that if the Activision deal closes, it will bring all Activision Blizzard titles to GeForce Now.

Nvidia is now with Microsoft pending deal for regulatory purposes, the two companies said in a joint statement Confirmation of 10 year deal of both companies. In January Bloomberg reported That Nvidia went to the US Federal Trade Commission with complaints about the Activision deal.

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“Combining the incredibly rich catalog of Xbox first party games with the high-performance streaming capabilities of GeForce Now will propel cloud gaming into a mainstream offering that appeals to gamers at all levels of interest and experience,” for GeForce Now. said Jeff Fischer, senior vice president of Nvidia. was quoted as saying. “Through this partnership, the world’s most popular titles will now be available from the cloud with just one click, playable by millions of gamers.”

Microsoft proposed its Activision Blizzard acquisition in January 2022, but since then, the buyer has faced pushback from regulators in the US, EU and UK.

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The Nvidia arrangement is meaningful because “we are now addressing the full range of issues that have been raised by regulators not only as matters of interest but in some cases as concerns,” Smith said at the press conference. .

In November, the European Commission, the executive branch of the European Union, launched an in-depth investigation of the deal, citing concerns that it could reduce competition in the video game market.

Activision Blizzard is the company behind the popular game franchise Call of Duty. The EU Commission said last year that Microsoft could block access to the game on other platforms if the deal goes through.

The commission is also concerned that it could give Microsoft an unfair edge in the nascent field of cloud gaming. Microsoft has a service called Game Pass through which it charges gamers $9.99 per month for access to its library of games. Activision will add some high-profile titles to the takeover Game Pass.

Nvidia’s GeForce Now has more than 25 million members, while Microsoft said last year that 25 million people subscribe to Game Pass. Nvidia offers free and paid GeForce Now tiers, although the higher resolution is only available to those who pay. GeForce Now members will be able to stream games listed in Epic Games and Steam’s app stores, as well as games purchased through Microsoft’s App Store, through the cloud.

In December, Microsoft said it had “entered into a 10-year commitment” to bring Call of Duty to Nintendo when the Activision acquisition closed. The announcement was seen as a move to calm antitrust concerns from regulators. on Tuesday, Smith Tweeted That two signs have now signed a “binding 10-year legal agreement” to bring Call of Duty to Nintendo players on the same day as Microsoft’s Xbox “with full feature and content parity.”

Smith declined to comment on the European Commission’s views at the hearing, but said the Nintendo and Nvidia deal is good for competition in the gaming market.

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“I think if you’re a competition regulator, and you’re focused on the interests of consumers and competition, today was a good day,” Smith told CNBC.

Microsoft hopes for Sony deal

Sony was not immediately available for comment when contacted by CNBC.

During a press conference on Tuesday, Smith held up a piece of paper saying it was a settlement he was ready to send to Sony.

Smith told CNBC that Microsoft is offering Sony a similar deal to Nintendo — with Call of Duty available on PlayStation with features similar to Xbox. However, Sony is still opposed to the deal.

“I’m living with hope that we’ll get a deal with Sony,” Smith told CNBC.

“We’re not there yet. But I think as we make progress with the others, if we can get a deal with Nintendo, if we can get a deal with Nvidia, that’s going to provide a way to which others like Sony can make.” But even.”

UK, US regulators aim for deal

It is not only European regulators who are concerned about the deal.

The UK’s Competition and Markets Authority said this month that the acquisition raises competition concerns and could result in higher prices, less choice and less innovation. The regulator said it may move to block the deal and suggested a number of measures Microsoft could take. One of them is Microsoft divesting the business responsible for Call of Duty.

Smith said that Microsoft does not see a “viable path” to sell Call of Duty games.

“It’s not something that appears to be lining up,” Smith told CNBC.

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“The only reason for selling it is the CMA’s potential concern that if we buy it, we won’t be able to provide it widely to others. I think the two agreements we signed today should put that concern to rest “

In December, the FTC filed an antitrust case against Microsoft, attempting to block the Activision deal.

google guardian Alphabet With discontent about Microsoft deal, Bloomberg also went to the FTC informed of,

A Google spokesperson told CNBC in an email, “The European Commission sought our views during their inquiry on this issue. We will continue to cooperate with any process if requested.”

Smith declined to comment on Alphabet’s exact concerns with the Activision deal, but acknowledged the company’s potential missteps.

“It’s easy to understand that Google may have questions about whether something like Call of Duty will be available on Chromebooks and the Chrome operating system in the future,” Smith said.

The Nvidia agreement means that the GeForce Now cloud gaming service is available on ChromeOS, Smith said. During the press conference, he said that Microsoft is able to maintain compliance with the kind of agreements it has with European regulators, which may require it to keep Call of Duty on Chrome OS.

“With the agreement we’ve made with Nvidia, we’ve made sure Google benefits as well,” Smith said.

Microsoft has said that its acquisition of Activision Blizzard will not harm competition in video gaming and instead increase competition against big players such as Sony and Chinese giant Tencent.

Microsoft has lagged behind the likes Sony And nintendo in the video-gaming business. microsoft xbox lags behind sony’s playstation 5 and Nintendo’s Switch. Sony and Nintendo’s popularity came from a large number of successful first-party games. Microsoft is looking to boost its game library with the Activision acquisition.

Shares of Activision Blizzard rose during Tuesday’s US trading session following the announcement.