Microsoft President Brad Smith told a news conference on Tuesday he was now more optimistic of getting the Activision acquisition done after the Nvidia deal and a similar arrangement with Nintendo Co Ltd (7974.T).
Instead, Nvidia's 25 million customers will need to pay Nvidia for access to its cloud gaming platform and pay Microsoft for its games.
Shares of Microsoft fell 2%, Nvidia dropped 3.4% and Activision fell 0.7% in a broadly lower market on Tuesday afternoon.
Nvidia said it now supports the Xbox maker's bid to purchase Activision, but the deal could still be a hard sell with regulators.
Smith said he hoped that rival Sony Group Corp (6758.T) will consider doing the same type of deal with Nvidia.