Google And NVIDIA Join Sony To Complain About Microsoft’s Activision Deal

LOS ANGELES, CALIFORNIA – JUNE 09: Phil Spencer, Executive President of Gaming at Microsoft, speaks … [+] during the Xbox E3 2019 Briefing at The Microsoft Theater on June 09, 2019 in Los Angeles, California. (Photo by Christian Petersen/Getty Images)

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The longer this goes, the less I’m sure this Microsoft Activision acquisition may actually happen. Through it all, I figured megacorp muscle would get it done, but what’s the biggest threat to a megacorp? A bunch of other megacorps ganging up on it. And that’s what’s happening now to Microsoft.

While Microsoft’s chief antagonist throughout this whole process has been Sony, mostly centered on complaints about Call of Duty and its potential exclusivity (which Microsoft denies will occur), now Google and NVIDIA are joining the fray, “voicing concerns” to the FTC about the deal. And for once, the complaints are not based on Call of Duty.

The issues they’re raising are that Microsoft may gain an unfair advantage in the cloud gaming, subscription and mobile spaces through this deal. It’s a bit of a weird complaint coming from Google, a company that just shuttered its own failed cloud gaming subscription service, Google Stadia, which will go fully offline just five days from now. And that failed spectacularly all on its own, given that this deal has not occurred yet.

SAN FRANCISCO, CALIFORNIA – MARCH 19: Google vice president and general manager Phil Harrison speaks … [+] during the GDC Game Developers Conference on March 19, 2019 in San Francisco, California. Google announced Stadia, a new streaming service that allows players to play games online without consoles or computers. (Photo by Justin Sullivan/Getty Images)

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NVIDIA, meanwhile, wants to compete with Xbox Cloud Gaming through GeForce Now, which seems to be the main force behind their concern. And yet simultaneously, despite raising this complaint, they also say specifically they’re not outright opposed to the deal.

To my knowledge, this is also one of the only times that anyone has brought up the mobile aspect of all this, as Microsoft is gaining an absolutely huge mobile arm in the form of King, which makes up the majority of Activision Blizzard’s MAUs and DAUs and a sizable chunk of its revenue from the maker of Candy Crush and a zillion other games. And yet Microsoft’s argument here is that they essentially have zero presence in the mobile market at all right now, so this just them getting a foothold.

The FTC very much feels like they are doing whatever they can to tank this acquisition for Microsoft, joining similarly antagonistic EU regulators who have been repeating a lot of Sony’s talking points. But now, Google and NVIDIA being involved, and raising new issues about the cloud, Game Pass and mobile aspects is just more ammunition, even if they say they’re not directly opposed to the deal. Sure they’re not.

Activision Blizzard stock has remained high this past year, up 20%, though it’s currently $20 below the $95 a share Microsoft agreed to pay for it originally. If this deal did collapse, however, Activision has reiterated how devastating it would be for the company, indicating how much they’re relying on it going through.

It’s unclear whether Microsoft will eventually be able to convince regulators of their position here, or what steps they might try to take to bypass any unfavorable outcomes in the future. Microsoft maintains this deal will close this year, but who knows how long that may taken, given the current situation, and I’d be pretty surprised if this was resolved by the time Blizzard’s Diablo 4 comes out this June. New drama every day here.

Update: Here’s Microsoft’s statement on this new development:

We are prepared to address and have been proactively addressing issues raised by regulators and competitors to ensure that the deal closes with confidence. We want people to have more access to games, not less.

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