Microsoft loops Nintendo and Valve into push for Activision bid approval

Microsoft has pledged to bring Call of Duty to Nintendo platforms as part of a 10-year commitment, should its $69 billion deal to acquire CoD publisher Activision Blizzard win regulatory approval.

Why it matters: It’s part of an unprecedented sequence of actions by Microsoft this week to press the benefits of the deal, as rumors of regulatory skepticism swirl.

• The acquisition could be blocked if the U.S Federal Trade Commission or regulators in the EU or the U.K. object.
• Last week, Politico reported that it was “likely” that the FTC would challenge the deal, though even a lawsuit from the regulator is a hurdle Microsoft could potentially overcome.

Driving the news: Microsoft announced the decade-long Nintendo deal on Tuesday night along with a pledge to continue to bring Call of Duty to Valve’s popular Steam marketplace on PC.

• Nintendo platforms haven’t hosted a Call of Duty since 2013’s Call of Duty: Ghosts.
• Call of Duty games skipped Steam in recent years before returning with this year’s Modern Warfare 2.

That news followed an op-ed in Monday’s Wall Street Journal from Microsoft president Brad Smith arguing the merits of the deal, including the company’s repeated refrains that it will offer players more choice and is, overall, “good for gamers.”

• Also on Monday, the Communication Workers of America said that nearly 300 game testers at Microsoft’s ZeniMax studios (Bethesda, Arkane, Id Software and more) were voting to unionize and that Microsoft was expected to voluntarily recognize the union if the drive prevails.
• Microsoft pledged in June to remain neutral on unionization efforts at its game studios, a contrast with current Activision management that has forced intervention from the National Labor Relations Board. (U.S. Senators had expressed concern to the FTC about the Activision deal’s impact on workers; the CWA has since said it would support the merger.)

Between the lines: A clear sticking point for U.K. regulators, at least, has been the status of Call of Duty and the potential for Microsoft to pull the franchise from rival platforms.

• This concern has been pressed by Microsoft rival Sony, which has so far declined to accept Microsoft offers to extend an existing Call of Duty deal.
• Annual Call of Duty releases tend to be the best or second-best selling games of the year, particularly in the U.S., and Microsoft has said it would not make economic sense to deprive future releases from PlayStation.
• Sony, however, says that Microsoft could use Call of Duty to gain unfair advantages in the console, subscription and cloud gaming markets.

The intrigue: Aside from the drama of whether the deal will go through is the subplot of what Call of Duty’s return to Nintendo might look like.

• In an interview with The Washington Post, Microsoft gaming chief Phil Spencer said the intention was for the company to provide new Call of Duty releases to Nintendo the same time it would for Xbox, PlayStation and PC.
• But compared to rival, and even last-gen, devices, Nintendo’s current Switch console is much weaker and has much smaller storage.

Nintendo did not elaborate on the deal, when asked about whether it has a current arrangement with Activision for the franchise or would pursue one if Microsoft’s Activision bid fails.

• “Nintendo confirms the accuracy of the Microsoft statement,” a rep told Axios. “We have nothing further to announce on this topic.”
• An Activision rep declined to comment on whether it would pursue a Nintendo deal if Microsoft fails to acquire the company.

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Editor’s note: This story has been corrected to show that the last time Nintendo hosted a Call of Duty game was 2013's Call of Duty: Ghosts, not 2012's Black Ops II.