Microsoft doesn’t see an Activision deal without Call of Duty

Less than two weeks ago, Britain’s antitrust watchdog suggested that Microsoft shut down Call of Duty – one of the most lucrative game franchises in the world – over concerns about its Activision Blizzard takeover being harmful to gaming market competition. may need to be removed. Microsoft President Brad Smith told reporters after a closed-door hearing with EU regulators in Brussels that it is “not possible or realistic to think that one game or one piece of this company can be isolated and can be distinguished from the rest” of the acquisition.

Antitrust regulators have a choice, he said: block the deal or “let the future move forward with behavioral guardrails and remedies and extend this title to more than 150 million people.”

That said, Smith struck an optimistic tone Tuesday after a day-long meeting defending the controversial deal. An agreement with Nintendo Co. and Nvidia Corp. to share the game with their platforms means that more than 150 million people will be able to access it if the Activision deal is approved, he said.

Microsoft’s proposed Activision Blizzard deal is the company’s largest ever and one of the 30 biggest acquisitions ever. In addition to Call of Duty, antitrust regulators are concerned about Microsoft’s leading position in cloud gaming.

The technology is still in its early days, but Microsoft is ahead of the pack with its Xbox Game Pass subscription service, which offers a library of more than 300 titles for around $10 a month to gamers who want to play on Xbox. Want to download game for . or PC. A higher tier of subscription at $15 per month includes cloud gaming, which enables subscribers to stream some games to any device, even tablets and phones.

By bringing Activision titles like Candy Crush and Call of Duty under its roof, Microsoft is betting that it will be able to offer more games to its Game Pass subscribers. While Tuesday’s hearing focused on concerns from the EU, authorities in the US and UK have all started processes that could potentially block the deal, amid concerns that Microsoft will lose an early edge in the cloud by adding Activision’s games. will eventually make them all exclusive. Its own platform.

The UK’s Competition and Markets Authority presents perhaps its biggest hurdle yet, with the agency earlier this month suggesting a range of structural measures, including divestment of the Call of Duty-related business, active divestitures of the business or complete mergers. Including stopping. Microsoft and other interested parties have until Wednesday to respond to the CMA’s provisional findings. A hearing will take place in London later this month to discuss possible treatments.

“If we can sort out these issues in Brussels, if we can sort things out in London, I’m hopeful that we’ll move past Washington DC as well,” Smith said in an interview on Bloomberg TV.

Earlier Tuesday, Smith said the company was “more than willing, given our strategy, to address the concerns of others, whether it be through contracts, as we did with Nintendo this morning, or whether it regulatory undertakings, as we have consistently done. Open to addressing.”

He was referring to the signing of a 10-year deal with Nintendo that “will bring Call of Duty to Nintendo devices.” Microsoft last year publicly offered a similar license for the blockbuster game to other rival Sony Group Corp.

Smith used the press conference to impeach Sony into agreeing to a deal to bring the games to a wider audience. He added that he was ready to “take out a pen” for Sony’s signature branding on stage with what he said was the real deal. Sony did not immediately respond to a request for comment.

Microsoft recently communicated preliminary findings to EU regulators about the bloc’s key concerns about the deal in a so-called statement of objections, or the deal, according to people familiar with the review.

With the European Union hearing — which included Bobby Kotick, chief executive officer of Activision, Nvidia as well as nearly 100 lawyers, executives and critics of Sony, and Alphabet Inc. – SO will set the path for Microsoft to submit a formal remedy in the coming weeks.

The EU aims to finalize its review by 11 April, but the date could still be pushed forward. The UK investigation is due to conclude by April 26, while in the US, the Federal Trade Commission is locked in a potentially lengthy process after formally suing to veto the transaction.

An Activision Blizzard spokesperson said, “Sony continues to deny the opportunity for a long-term agreement and is undermining the deal to protect its two decades of dominance in video games.”