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EU 'poised' to OK Microsoft's Activision biz gobble

Crunch licensing talks with rivals may ease antitrust fears

Microsoft may be catching a break on its contentious bid to buy game maker Activision Blizzard for $69 billion.

The European Union appears poised to clear the acquisition next month without asking Microsoft to divest any of its assets in return, according to a report late last week from Reuters. A go-ahead from the EU would remove one hurdle from the software maker's path, but would still leave antitrust concerns in the US and UK to deal with.

Citing three unnamed sources, Reuters said that Microsoft's efforts to sign licensing deals with rivals is playing a role in the thinking of the EU, which is set to make its decision by April 25.

Microsoft president Brad Smith and other executives have argued that such licensing agreements will ensure that rivals like Sony, Nintendo, and Nvidia will have the same timing and access to popular Activision games – in particular Call of Duty – as Microsoft's Xbox division.

During a barnstorming tour through Europe late last month that included meeting with regulators and Sony PlayStation executives, Smith announced 10-year licensing deals with Nintendo and Nvidia, each of which dropped their opposition to the acquisition.

If Microsoft buys Activision, it will bring Xbox PC games to Nvidia's GeForce NOW cloud gaming service and its more than 25 million members. In addition, Call of Duty will be available to Nintendo players, with new versions of the game being available to Nintendo at the same time that they come to Xbox.

Sony remains the key holdout as both the US Federal Trade Commission (FTC) and the UK's Competition and Markets Authority (CMA) continue to question the acquisition. The CMA has suggested that Microsoft divest Call of Duty from the deal as a step toward getting the green light from UK regulators, a move Smith pushed back against.

The licensing agreements with competitors – the same deal has been offered to Sony – are designed to ensure that the widely popular game is accessible to 150 million more people, which should alleviate antitrust concerns, Smith said after meeting with EU regulators last month.

The Register has asked both Microsoft and the European Commission to comment and will update the story if either responds.

For its part, the FTC is suing Microsoft over antitrust concerns to stop the Activision acquisition from going forward. Microsoft won a skirmish in that battle on February 23 when a judge overseeing the case sided with the software company in its efforts to force Sony to produce documents outlining exclusivity deals that Sony has with third-party game makers, including ones aimed at keeping some games from Microsoft's Xbox Game Pass subscription service.

Microsoft has argued that buying Activision is a way to make it more competitive in a global game console market dominated by Sony. However, Microsoft is ahead of its rivals in the growing games subscription service space, making more than 300 games available to players on a range of devices – not only Xbox consoles, but also PCs and mobile devices and the like – via Xbox Game Pass.

The software giant is also facing off against a federal lawsuit launched by gamers in California and last week responded to a motion for a preliminary injunction that would force it to press pause on the $68.7 billion buyout. It said that contrary to gamers' claims it could potentially withhold titles from rivals, its has signed agreements with Nvidia and Nintendo to share titles.

"Microsoft does not have the 'means' to withhold competitors' access to the downstream content because such withholding is contractually impossible," it argued in the filing [PDF]. ®

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