The FTC Challenge to Microsoft: The Puzzle of a Big-picture Game Cosmic-GeForce-Now Deal and the Break of the Cloud Gaming Chicken-and-Egg Cycle
The FTC is challenging Microsoft’s largest acquisition in history by taking it to court.
The FTC complaint claims that the blockbuster deal would give Microsoft both the means and motive to harm competition, and could negatively affect the prices of video games.
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 allegation that this deal is anti-competitive doesn’t align with the facts, and we believe we’ll win this challenge,” he said.
The US merger challenge represents the biggest blow yet for Microsoft as it has aggressively courted regulators around the world in an effort to convince them to approve the deal. The FTC sued to break up Facebook owner Meta in 2020, which was the most significant challenge to the tech industry since then.
The deal was scrutinized by officials from the United Kingdom and European Union. But the FTC complaint marks the first attempt by an antitrust regulator to block the deal outright.
In February, Microsoft promised to make an 11-point pledge related to its app marketplaces and gaming business. The list included a promise, which would cover the proposed Activision deal, not to give preferential treatment to its own published games on digital marketplaces it runs.
And though Microsoft, Activision Blizzard, and Bethesda were among the first companies to pull their games from GeForce Now back in 2020, that shouldn’t happen again under the terms of this agreement. “Once we onboard them, we’ll have the rights to them for 10 years,” says Eisler. (If Microsoft later decides to sell off studios, though, he’s not sure the agreement would bind future owners.)
What does that mean for 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.
Big picture, Eisler thinks this deal could finally break the cloud gaming “chicken-and-egg” cycle — providing enough games to attract enough gamers to convince publishers to provide more games, too.
The company that makes the graphics doesn’t sell games. Unless they are free to play then you have to buy them from Steam, the Unreal Games Store and/or the Microsoft Store. If the deal goes through, Battle.net could be in the future. He says that he is the one who developed the tool that lets you see what’s happening. We can let authorized owners know about it.
I have a question about whether I will be able to play games that I have the rights to play on GeForce Now if I subscribe to Microsoft’s Game Pass. Will Microsoft stop me from buying the game again? Eisler won’t say. “We have no announcement about Game Pass right now.”
Sound neat? Remember, we are talking about streaming rights for games that you have already purchased, and free games, so you should not 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 doesn’t have the capacity to do more than maybe 10 games per week at present, he suggests. 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.
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That is just an estimate at the moment. The companies haven’t worked on detailed implementation plans yet, because 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.