Valve's Gabe Newell improves Microsoft's chances in closing Activision merger

Valve's Gabe Newell has significantly helped improve Microsoft's chances in closing the Activision merger.

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Image Credit: The Project NZ

Microsoft is pulling out all the stops to get the Activision merger approved. Just two days ago Microsoft announced a significant 10-year deal that guarantees Call of Duty on both Nintendo and Steam, both of which are competing platforms to the Xbox brand. The tech giant is aggressively trying to debunk Sony's claims of industry foreclosure due to Call of Duty exclusivity.

Interestingly enough, Valve disregarded Microsoft's offer. Not because Valve doesn't agree with the deal, but because the PC publisher simply doesn't need the guarantee. Valve Corp. President Gabe Newell trusts Microsoft enough already and doesn't need a binding contract. Newell believes that Microsoft will keep its word, which is something that will significantly help Microsoft's chances in closing the deal.

Here's what Newell told Kotaku:

We're happy that Microsoft wants to continue using Steam to reach customers with Call of Duty when their Activision acquisition closes. Microsoft has been on Steam for a long time and we take it as a signal that they are happy with gamers' reception to that and the work we are doing.

Our job is to keep building valuable features for not only Microsoft but all Steam customers and partners.

Microsoft offered and even sent us a draft agreement for a long-term Call of Duty commitment but it wasn't necessary for us because

a) We're not believers in requiring any partner to have an agreement that locks them to shipping games on Steam into the distant future.

b) Phil and the games team at Microsoft have always followed through on what they told us they would do so we trust their intentions.

c) We think Microsoft has all the motivation they need to be on the platforms and devices where Call of Duty customers want to be.

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Securing Valve's trust is a big deal for Microsoft as a kind of character reference, especially since Valve beats all other dedicated video game platforms in terms of monthly active users.

The enormity of Newell's comments can't be understated. Valve's assertions have tremendously benefited Microsoft's cause.

Regulators are concerned about possible foreclosure strategies from Microsoft involving shutting down competition by withholding access to big games like the $31 billion Call of Duty franchise. Sony has argued that Microsoft could harm competition by making Call of Duty exclusive. Microsoft has repeatedly countered this argument, and days ago, backed up its promises with obligatory contracts to major competitors.

Valve is a competitor to Microsoft on the gaming front. Valve's Steam platform dominates the PC market which Microsoft has a foothold in with its Microsoft Store, which sells PC versions of its first-party games.

At the same time, Valve and Microsoft are also partners. Following slower adoption on its Microsoft Store platform, Microsoft has opted to sell its games on Steam for quite some time, and more importantly, keep the first-party games on Steam that were already there before it acquired major studios like inXile and Obsidian Entertainment.

Microsoft even kept Zenimax titles on Steam after it purchased the media company in 2021.

It's also worth noting that Gabe Newell was receptive and interested in possibly bringing Xbox Game Pass to Steam.

"We'd be more than happy to work with them to get that on Steam," Newell said in February 2022.

Valve's good faith in Microsoft will undoubtedly offer regulators critical perspective and clarity in the PC gaming front. It's true that Microsoft is less of a competitor to Valve in PC gaming than it is to Sony in console gaming, however this is the first major competitor to really support and speak out favorably in a public forum to Microsoft's post-merger plans.