Microsoft President Brad Smith Challenges Regulators: “Do You Want To Kill A Deal And Cement Sony’s Position?”

Microsoft President Brad Smith has made a defiant challenge to regulators, in a press conference in Brussels following a closed hearing with the European Commission regarding their deal to acquire Activision Blizzard King.

Yesterday, Brad revealed that they signed a deal with Nintendo to get Call of Duty with feature parity for ten years. This deal does not include all Microsoft games, but is a positive extension for the relationship between the two companies that has seen cross platform publishing for many games, including the recent remaster of GoldenEye 007 on Xbox and Nintendo Switch.

Brad revealed in this same press conference today that they also signed a deal with Nvidia. This time, not only Call of Duty games but Microsoft games in general will be getting licensed to be playable on Nvidia’s GeForce Now cloud service.

And so, Brad weaponizes both these deals in this press conference, pointing out that these pre-emptive deals now places regulators in a position where they can cancel the deals, making Call of Duty available on less platforms than they are now.

As Tom Warren covered for The Verge, this statement was addressed specifically to the UK CMA:

“Do you want to kill a deal and cement Sony’s position and its 80 percent share in the European Economic Area… or do you want to let the future go forward with behavioral guardrails and remedies and bring this title to 150 million more people?  I think that’s the fundamental choice that most regulators are going to need to address.”

Brad is of course alluding to Sony’s market dominance in the video game console space through the eight and ninth generation of video game consoles.

Tom also notes that Brad did not share any details of the closed hearing with the EU that he just came from. It is possible that Brad is simply legally constrained from addressing that meeting itself. If that is the case, he can still talk about the issues that that meeting involves, outside of that context.

This is the strongest case Microsoft has made to gain support for the acquisition with the public, and is likely a part of the arguments they have made in front of the regulators themselves. If one understands that the video game industry is now much bigger than the consoles themselves, one can also appreciate that the window Sony wants regulators to see the market as, between PlayStation and Xbox, is only a fraction of what it actually is. Between Nintendo’s, Valve’s, and Nvidia’s platforms, Microsoft has proven that Sony isn’t actually the competition that regulators need to protect.