The FTC Challenge in the Deal to Buy Microsoft from Nvidia: Microsoft’s Game Studio, its App Store, and iPlayer
Microsoft COO Brad Smith wrote in the Wall Street Journal that an FTC suit to block the deal would be a huge mistake and that the acquisition would allow Microsoft to introduce new features like the ability for the consumer to play games on multiple devices.
The director of the FTC’s Bureau of Competition, Holly Vedova, said in a statement that Microsoft was intending to harm the competition in multiple gaming markets by taking over a leading independent game studio.
In an email sent to employees and provided to CNN, Activision CEO Bobby Kotick said the FTC suit may sound “alarming” but he remains confident the deal will close. The allegations that this deal is anti-competitive do not correspond with the facts, and we think we will win this challenge.
The US merger challenge reflects the biggest setback yet for Microsoft as it has aggressively courted regulators around the world in hopes of persuading them to bless the deal. It also marks the FTC’s most significant challenge to the tech industry since it sued to break up Facebook-owner Meta in 2020, underscoring US officials’ vocal promises of a tough antitrust enforcement agenda.
Officials in the United Kingdom and the European Union have also scrutinized the deal as potentially anticompetitive. The FTC is the first to try and block the deal completely.
Months earlier, in February, Microsoft made an 11-point pledge related to all of its app marketplaces and its gaming business. It has promised not to give preferential treatment to it’s own published games on the digital marketplaces that it runs under the proposed deal.
Microsoft is trying to convince the world that it should be able to buy the company for $69 billion, and it brokered a 10-year contract with Nvidia to stream its games over the internet.
What does that mean for gamers like you and me? Well, I just got off the phone with Nvidia GeForce Now VP Phil Eisler, who gave me both a big-picture answer and the shorter-term practical details to go with it.
The big picture is that this deal could finally break the “chicken-and-egg” cycle of cloud gaming by providing enough games to draw in enough players to convince publishers to provide more games.
You shouldn’t have to wait for future Microsoft-owned games to show up in GeForce Now, either. “The agreement is to release new titles day-and-date or as close to day-and-date as we can with the PC release of the games,” Eisler says. The rights are tied to the PC games, not the console games.
Even though Microsoft has an Xbox Cloud Gaming service, it is possibly possible to play games from the console in a place other than the cloud. In comparison to the tens of thousands you would find on the steam platform, he’s hoping that the deal will translate into more titles at the GeForceNow store.
Sound neat? Just remember that we’re just talking about streaming rights for games that you’ve already purchased and games that are free to play — and even then, you shouldn’t expect to have access to every Microsoft game right away.
Practically speaking, Nvidia plans to roll out just a few games a week, says Eisler. The company does not have the strength to do more than 10 games per week. While Nvidia plans to make the first Microsoft games available in the next few weeks from Steam and the Epic Games Store, he estimates it’ll take between six and 12 months to enable the Microsoft Store catalog and enable all existing games.
Is Gamepass an Expeditious Agreement? Analysis of the DWDM-Project and the Strategy of a Separate Game Pass
It is just an estimate, by the way. The companies haven’t worked on implementation plans yet despite the fact the deal came together last week.
It wouldn’t be surprising if Game Pass is entirely separate: in 2021, Microsoft gaming boss Phil Spencer made it clear that studio acquisitions like Bethesda were about securing exclusive games for Game Pass.