Microsoft to Offer Call of Duty on Nintendo Devices if Activision Deal Closes

In a last-minute attempt to placate antitrust regulators, Microsoft said on Tuesday night that it would bring the blockbuster video game franchise Call of Duty to Nintendo devices if its $69 billion acquisition of the game’s maker, Activision Blizzard, was completed.

Microsoft’s deal to buy Activision — the largest consumer technology deal since AOL bought Time Warner two decades ago — faces reviews by antitrust regulators around the globe.

Many in the video game industry expect the Federal Trade Commission to discuss the acquisition in a closed-door session scheduled for Thursday. The commission could vote on whether to file a lawsuit in an effort to block the deal.

Regulators are primarily focused on concerns that consumers would be harmed if Microsoft, which makes the Xbox console, withheld Activision’s games from competitors or unfairly leveraged Activision’s popular titles as more video games were streamed online.

The 10-year deal to bring future releases of Call of Duty to Switch video game devices made by Nintendo, one of Microsoft’s rivals, is part of Microsoft’s efforts to signal that it wouldn’t block the popular game from devices made by other companies.

Microsoft also announced a 10-year commitment to release Call of Duty with Valve, the maker of the Steam distribution platform, which is popular with gamers who play on personal computers rather than game consoles. Call of Duty’s latest release is already available on Steam.

“There’s been some question about whether what we’re saying is actually how we’re acting, and I think having two major industry partners kind of show that our intent is real and that we can reach agreements is an important thing in this time,” Phil Spencer, the chief executive of Microsoft’s gaming business, said in an interview.

Call of Duty is also a key video game for Sony’s PlayStation console, and Microsoft has offered to maintain that relationship for at least another 10 years if the Activision deal goes through. Sony declined to comment on Microsoft’s offer after it was made. Sony has objected to Microsoft’s acquisition of Activision, arguing that it would reduce choices for gamers.

Nintendo and Valve did not immediately respond to requests for comment.

A long-running franchise in which players fight in historical, present-day and futuristic battles, Call of Duty is a crown jewel in Activision’s portfolio. It has earned more than $30 billion in revenue. The latest version, Modern Warfare II, made more than $1 billion in just 10 days.

For Nintendo, adding a violent first-person shooter game like Call of Duty to the host of titles available to play on the Switch would be a surprising departure. The company has long been protective of the playful, family-friendly branding it has developed over decades through iconic franchises like Mario, Pokemon and The Legend of Zelda, though it does offer some more mature games.

Sony and Microsoft have sparred often over a similar segment of so-called hard-core gamers, who might be more drawn to dark, story-driven games or challenging and violent combat games.

But Nintendo has built an empire marketing lovable, candy-colored characters, like the squishy pink Kirby and the smiling dinosaur Yoshi. At the beginning of the pandemic, Animal Crossing: New Horizons, a tranquil game in which players build virtual islands, became a smash hit.

Nintendo’s newest console, the Switch is significantly cheaper than Sony’s PlayStation 5 or Microsoft’s Xbox Series X, and differs from the more expensive, boxier consoles by being small and portable, so players can game on the go.

The Switch has been a huge success, selling 114 million units as of the end of September. But it has less processing power than the newest Microsoft and Sony consoles, raising questions about what kind of an experience playing Call of Duty would be on a Nintendo device.

“Nintendo has done a great job of creating a family-friendly platform that can be successful for all kinds of creators,” Mr. Spencer said, adding that there is “definitely work” to be done to make Call of Duty run well on the Switch.

Gaming has become Microsoft’s most important consumer business, and when it announced the Activision acquisition in January it signaled that getting approval from antitrust regulators could be cumbersome. Microsoft said closing the deal could take a year and a half, and agreed to pay Activision as much as $3 billion if the tie-up falls apart.

In an opinion piece in The Wall Street Journal on Monday, Brad Smith, Microsoft’s president, wrote about the 10-year offer to Sony and said the company was “open to providing the same commitment to other platforms and making it legally enforceable by regulators in the U.S., U.K. and European Union.”

Source link