Microsoft defends $69bn Activision merger amidst EU meeting in Brussels

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The saga surrounding Microsoft’s acquisition continues, with recent news surfacing after a press event in Brussels on the 2st of February. Included in this article is the information pertaining to these headlines:

• Microsoft has defended its proposal to buy Activision Blizzard – the maker of Call of Duty – at an EU competitions hearing.
• Microsoft recruits Nvidia and Nintendo to aid in proposition with Sony in a bid for EU regulator confidence
• Sony rejects compromise made for Call of Duty
• Sony accuses Microsoft of “harassment”, whilst Activision accuses Sony of “sabotage”

A key audience for the announcements were the European Union competition regulators who held a closed-door meeting on Tuesday with executives from Microsoft and some of their competitors, including Sony and Google.

Microsoft defends acquisition of Activision Blizzard

During a special press event in Brussels, Microsoft’s president Brad Smith summarised their position with regards to the deal. Smith directed one question to the UK’s Competition and Markets Authority (CMA), which raises concerns with game exclusivity and cloud gaming:

“Do you want to kill a deal and cement Sony’s position and its 80 percent share in the European Economic Area… or do you want to let the future go forward with behavioral guardrails and remedies and bring this title to 150 million more people?”

Smith asks CMA and EU regulators

Smith and other Microsoft executives have been meeting with European lawmakers yesterday in a standoff over Activision and Call of Duty. 

Xbox’s CEO Phil Spencer and other senior Microsoft executives have argued Microsoft’s case, with PlayStation’s CEO Jim Ryan and Activision’s CEO Bobby Kotick. Also present were representatives from Google, Nvidia, Valve, EA, and the European Games Developer Federation.

Nvidia and Nintendo step up to back Microsoft’s proposal

Both Nvidia and Nintendo have stepped up to help Microsoft try to ease regulator concerns. Following on from an agreement from Microsoft and Nvidia officials, Nvidia’s newest GeForce Now cloud gaming service, and an additional deal that made headlines earlier this quarter with Nintendo to bring Call of Duty to its platforms has also gone ahead, merger permitting.

The difference between Nintendo and Nvidia’s deal is that the Nvidia deal invites Xbox PC games to stream on GeForce Now.

The efforts made by all three parties to strengthen the claims of cloud gaming, and the “dominance” that Sony has over the EU market were heard by EU regulators at the Brussels meeting.

Sony rejects compromise made for Call of Duty

Countries such as Chile, Brazil and Saudi Arabia – have already approved the acquisition.

However, Smith’s appeal to the UK’s competition watchdog recently said it was opposed to the deal, although it has yet to announce its final ruling, and the European Commission has ruled for an inquiry.

One suggestion made by the UK CMA was that Call of Duty could be sold off separately.

Microsoft has vowed to make all current Activision Blizzard games available on Nintendo, Sony and Steam platforms for at least the next 10 years. However, Sony has rejected the deal.

Sony accuses Microsoft of “harassment”, whilst Activision accuses Sony of “sabotage”

As the $69 billion merger faces scrutiny from regulators like the FTC, the CMA in the UK, and the European Commission, harsh words begin to fly around in what is truly a hot waters for Microsoft, Activision and Sony.

During filings for an FTC suit against the acquisition, Sony lawyers labelled Microsoft’s demands to see Sony employee performance reviews as “obvious harassment.”

“Microsoft’s demand for performance reviews for SIE’s leadership is obvious harassment,” says the legal filing. “Even in employment cases courts require a specific showing of relevance before requiring production of personnel files.”

This was then followed by Activision Blizzard CEO Bobby Kotick accusing Sony of “trying to sabotage” Microsoft’s takeover of the company and claimed that PlayStation chief Jim Ryan has “stopped talking” to both.