Microsoft Signs Third ‘Call of Duty’ Deal as It Seeks Approval to Buy Activision Blizzard

Microsoft said Boosteroid is the largest independent cloud-streaming company, with about four million users globally, including in the European Union, the U.K. and the U.S. The 10-year agreement would allow its customers to stream Activision games including ‘‘Call of Duty” if the acquisition goes through, Microsoft said. It is the third such pact Microsoft has signed. It previously reached similar deals with console maker

Nintendo Co.

NTDOY -0.42%

and chip maker

Nvidia Corp.

NVDA 4.67%

Nintendo makes the Switch gaming console and hit game franchises like “Mario” and “The Legend of Zelda.” Nvidia offers a cloud-streaming service for computers and other devices.

Mr. Smith said in an interview with The Wall Street Journal that the company wants to show through the distribution agreements that its plan to buy Activision will improve users’ access to “Call of Duty.” 

Competition authorities in the EU, the U.S. and the U.K., which are examining the acquisition, have said they are concerned it could allow Microsoft to control how consumers access Activision games, potentially reducing competition in the videogame market.

“If the only argument is that Microsoft is going to withhold ‘Call of Duty’ from other platforms, and we’ve now entered into contracts that are going to bring this to many more devices and many more platforms, that is a pretty hard case to make to a court,” Mr. Smith said. He said any decision on the deal would be subject to judicial review.

Decisions from regulators in Europe and the U.K. are expected this spring. The European Commission, which is responsible for competition regulation in the EU, has until April 25 to decide whether to approve the acquisition, and the U.K. regulator has set an April 26 deadline.

Some antitrust lawyers have said the U.K.’s Competition and Markets Authority could pose the biggest hurdle for the deal, which Microsoft values at nearly $69 billion after adjusting for Activision’s net cash. The CMA prefers structural change, such as divestments, to resolve competition concerns, rather than commitments to behave in a particular way.

The CMA recently published a list of possible ways for Microsoft to ease the regulator’s concerns about the deal. One of the suggestions was for Microsoft to divest Activision’s publishing unit, which owns the studios that make the “Call of Duty” franchise. Microsoft has said the company isn’t interested in divesting part of Activision’s business.

“The reason we want to buy Activision Blizzard is to round out our titles to have a fuller library, especially to have more mobile titles where we don’t have a strong presence, and build a stronger gaming business,” Mr. Smith said.

Mr. Smith said behavioral commitments in the videogaming industry would be similar to those Microsoft agreed to with the European Commission in 2009, when the company settled an antitrust investigation after making commitments regarding its Internet Explorer browser and its Office software suite and server. 

“Regulators have in fact dealt with these issues for a long time. So have we. And they have proven to be eminently manageable,” Mr. Smith said.

The Activision deal also faces U.S. scrutiny. The Federal Trade Commission sued Microsoft to block the deal in December, saying the company could raise prices for people who don’t use Microsoft’s hardware to access Activision games or cut off their access entirely. Microsoft has said it wouldn’t do those things.

Boosteroid said its deal with Microsoft should help the company with its goal of bringing games to any device a user has available.

Mr. Smith said Microsoft expects to reach additional deals in the coming weeks. “More will follow,” Mr. Smith said.

Microsoft earlier made a similar offer to

Sony Group Corp.

, the most prominent critic of the planned Activision deal. Mr. Smith said the companies haven’t reached a formal agreement and aren’t currently in discussions.

Sony didn’t immediately respond to a request for comment.

—Sarah E. Needleman contributed to this article.

Write to Kim Mackrael at [email protected]

Microsoft said Boosteroid is the largest independent cloud-streaming company, with about four million users globally, including in the European Union, the U.K. and the U.S. The 10-year agreement would allow its customers to stream Activision games including ‘‘Call of Duty” if the acquisition goes through, Microsoft said. It is the third such pact Microsoft has signed. It previously reached similar deals with console maker

Nintendo Co.

NTDOY -0.42%

and chip maker

Nvidia Corp.

NVDA 4.67%

Nintendo makes the Switch gaming console and hit game franchises like “Mario” and “The Legend of Zelda.” Nvidia offers a cloud-streaming service for computers and other devices.

Mr. Smith said in an interview with The Wall Street Journal that the company wants to show through the distribution agreements that its plan to buy Activision will improve users’ access to “Call of Duty.” 

Competition authorities in the EU, the U.S. and the U.K., which are examining the acquisition, have said they are concerned it could allow Microsoft to control how consumers access Activision games, potentially reducing competition in the videogame market.

“If the only argument is that Microsoft is going to withhold ‘Call of Duty’ from other platforms, and we’ve now entered into contracts that are going to bring this to many more devices and many more platforms, that is a pretty hard case to make to a court,” Mr. Smith said. He said any decision on the deal would be subject to judicial review.

Decisions from regulators in Europe and the U.K. are expected this spring. The European Commission, which is responsible for competition regulation in the EU, has until April 25 to decide whether to approve the acquisition, and the U.K. regulator has set an April 26 deadline.

Some antitrust lawyers have said the U.K.’s Competition and Markets Authority could pose the biggest hurdle for the deal, which Microsoft values at nearly $69 billion after adjusting for Activision’s net cash. The CMA prefers structural change, such as divestments, to resolve competition concerns, rather than commitments to behave in a particular way.

The CMA recently published a list of possible ways for Microsoft to ease the regulator’s concerns about the deal. One of the suggestions was for Microsoft to divest Activision’s publishing unit, which owns the studios that make the “Call of Duty” franchise. Microsoft has said the company isn’t interested in divesting part of Activision’s business.

“The reason we want to buy Activision Blizzard is to round out our titles to have a fuller library, especially to have more mobile titles where we don’t have a strong presence, and build a stronger gaming business,” Mr. Smith said.

Mr. Smith said behavioral commitments in the videogaming industry would be similar to those Microsoft agreed to with the European Commission in 2009, when the company settled an antitrust investigation after making commitments regarding its Internet Explorer browser and its Office software suite and server. 

“Regulators have in fact dealt with these issues for a long time. So have we. And they have proven to be eminently manageable,” Mr. Smith said.

The Activision deal also faces U.S. scrutiny. The Federal Trade Commission sued Microsoft to block the deal in December, saying the company could raise prices for people who don’t use Microsoft’s hardware to access Activision games or cut off their access entirely. Microsoft has said it wouldn’t do those things.

Boosteroid said its deal with Microsoft should help the company with its goal of bringing games to any device a user has available.

Mr. Smith said Microsoft expects to reach additional deals in the coming weeks. “More will follow,” Mr. Smith said.

Microsoft earlier made a similar offer to

Sony Group Corp.

, the most prominent critic of the planned Activision deal. Mr. Smith said the companies haven’t reached a formal agreement and aren’t currently in discussions.

Sony didn’t immediately respond to a request for comment.

—Sarah E. Needleman contributed to this article.

Write to Kim Mackrael at [email protected]