Activision takeover will deliver 'low prices and increased choice' insists president of Microsoft

Joel Hills reports on Microsoft's attempted purchase of Activision as the firm's president attended talks in Brussels to get the multi-billion pound deal over the line

Blockbuster games don’t come much bigger than Call of Duty.

Worldwide, the franchise has grossed $30 billion (£24.8 billion) and counting. It is the jewel in Activision’s crown and Microsoft wants a piece of the action.

But in the UK the Competition and Markets Authority (CMA) is threatening to block a takeover, which it says could result in higher prices and less choice for gamers. Regulators in Europe and the United States have similar concerns.

Today, the president of Microsoft was at an EU hearing in Brussels. Brad Smith arrived brandishing ten-year agreements to supply Call of Duty to Nintendo and Nvidia, and offering to make the same legally-binding commitment to Sony.

Mr Smith told ITV News that Microsoft’s $69 billion (£57 billion) takeover of Activision, which was agreed last January, would prove to be "good for the people of Britain", insisting there’s no reason to worry that Call of Duty would be removed from rival platforms.

"The UK government’s own survey of gamers showed that 75% of people want [the Activision] deal to go through," he said.

"Microsoft has entered into two agreements today [with Nintendo and Nvidia] that will bring the number one game that everyone is talking about, Call of Duty, to 150 million more people around the world than have it today."

Sony and Nintendo each hold around 40% of the games console market, according to Ampere Analysis.

Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To Know...

Microsoft’s Xbox accounts for just 20% of installed consoles, but the CMA worries that ownership of Call of Duty would tip the balance of power in Microsoft’s favour.

The CMA is also concerned that ownership of Activision's library of games - which include World of Warcraft and Candy Crush - would enable Microsoft to dominate game streaming (known as "cloud-gaming") in the way Netflix dominates video streaming.

Cloud-gaming is in its infancy and is where games are streamed remotely from computer servers rather than downloaded and installed on devices. The market is tiny (accounting for 0.02% of games sales in 2022), but growing in popularity. Microsoft already has a leading position, but hopes that its deal with Nvidia - which runs a cloud-gaming service - will allay regulators’ concerns.

"I believe that we can offer with great confidence a future where prices remain low and choices increase," Mr Smith said.

"The deal that the CMA reviewed two weeks ago is different to today because we have these two new agreements - one to address cloud-gaming with Nvidia, one to address console gaming with Nintendo."

The CMA has indicated it will only allow Microsoft to buy Activision if it then agrees to sell Call of Duty.

This is not something Microsoft is willing to do.

Mr Smith would not say if Microsoft would pull out if the CMA insists on divestment, but told reporters he was now "more optimistic" the takeover would proceed.

The CMA will make its final decision at the end of April.