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Standard game theory cannot describe microbial interactions mediated by diffusible molecules. Nevertheless, we show that one can still model microbial dynamics using game theory with parameters renormalized by diffusion. Contrary to expectations, greater sharing of metabolites reduces the strength of cooperation and leads to species extinction via a nonequilibrium phase transition. We report analytic results for the critical diffusivity and the length scale of species intermixing. We also showdoi:10.1101/013144 fatcat:ryqowllnzvexlgqn2ffcgojsxu