Microsoft is now trying to restructure its proposed acquisition of Activision Blizzard to finally get approval from the UK regulator. That’s why the company has announced a new cloud gaming agreement with Ubisoft.
What happened?
- In a blog post, Microsoft stated that after closing the $68.7 billion deal, “cloud streaming rights for all current and new Activision Blizzard PC and console games released over the next 15 years” will be transferred to Ubisoft and will be “in perpetuity.”
- This move should adress cloud gaming concerns raised by the UK Competition and Markets Authority (CMA), which blocked the Activision Blizzard deal in April.
- “Under the restructured transaction, Microsoft will not be in a position either to release Activision Blizzard games exclusively on its own cloud streaming service — Xbox Cloud Gaming — or to exclusively control the licensing terms of Activision Blizzard games for rival services,” the statement reads.
- Ubisoft will be able to license and price Activision Blizzard titles on different cloud gaming services globally. The French publisher will compensate for the rights through a one-off payment to Microsoft and through a “market-based wholesale pricing mechanism, including an option that supports pricing based on usage.”
- Microsoft will continue to provide cloud gaming rights in the European Economic Area. Its previously announced agreements with Nvidia, Boosteroid, Ubitus, and Nware also remain in place.
- “We believe that this development is positive for players, the progression of the cloud game streaming market, and for the growth of our industry,” the company said.
What did Activision Blizzard say about the Ubisoft deal?
- Activision Blizzard CEO Bobby Kotick noted that this agreement will change nothing for the company and its upcoming merger with Microsoft in terms of a closing deadline and the cash consideration to be paid for each share at closing.
- “We will continue to work closely with Microsoft and the CMA throughout the remaining review process, and we are committed to help Microsoft clear any final hurdles as quickly as possible,” he said.
How did the CMA react to Microsoft’s agreement with Ubisoft?
- On August 22, the CMA imposed a final order prohibiting the proposed acquisition of Activision Blizzard on a worldwide basis.
- The reason is that the regulator believes that the “acceptance of binding commitments by the European Commission and a licensing deal agreed between Sony and Microsoft” don’t provide any basis for changing the original decision to block the deal in the UK.
- However, the CMA agreed to investigate the agreement between Microsoft and Ubisoft. The deadline for the probe is set for October 18.
- “This is not a green light,” CMA CEO Sarah Cardell said. “We will carefully and objectively assess the details of the restructured deal and its impact on competition, including in light of third-party comments.”