Microsoft has submitted a new Activision Blizzard deal for review after the UK’s Competition and Markets Authority (CMA) confirmed the original deal is blocked.
To address the CMA’s concerns, Microsoft has restructured the deal to buy a “narrower” set of rights. This includes signing a deal with Assassin’s Creed maker Ubisoft to sell the cloud streaming rights for all current and new Activision Blizzard PC and console games released over the next 15 years, and for non-exclusive rights to stream in the European Economic Area. The rights will be in perpetuity.
“As a result of the agreement with Ubisoft, Microsoft believes its proposed acquisition of Activision Blizzard presents a substantially different transaction under UK law than the transaction Microsoft submitted for the CMA’s consideration in 2022,” Microsoft president Brad Smith said.
“As such, Microsoft today has notified the restructured transaction to the CMA and anticipates that the CMA review processes can be completed before the 90-day extension in its acquisition agreement with Activision Blizzard expires on October 18.”
Microsoft said that under the restructured buyout, it will not be in a position either to release Activision Blizzard games exclusively on Xbox Cloud Gaming, or exclusively control the licensing terms of Activision Blizzard games for rival services, opening the possibility of Activision Blizzard games appearing on PlayStation and Nintendo consoles on cloud gaming services. Ubisoft can now commercialise the distribution of the games via cloud streaming, including to Microsoft itself.
Ubisoft will buy the cloud streaming rights to Activision’s games through a one-off payment and through a market-based wholesale pricing mechanism, including an option that supports pricing based on usage. Ubisoft will have the ability to license out to third-parties the cloud streaming rights to Activision’s games under any business model of its choosing, including buy-to-play, multigame subscription services, or any other model that may arise, the CMA said. Ubisoft will also be able, for a fee, to require Microsoft to adapt Activision’s titles to operating systems other than Windows, such as Linux, if it decides to use or license out the cloud streaming rights to Activision’s titles to a cloud gaming service that runs a non-Windows operating system.
Sarah Cardell, Chief Executive of the CMA, said: “The CMA has today confirmed that Microsoft’s acquisition of Activision, as originally proposed, cannot proceed.
“Separately, Microsoft has notified a new and restructured deal, which is substantially different from what was put on the table previously. As part of this new deal, Activision’s cloud streaming rights outside of the EEA will be sold to a rival, Ubisoft, who will be able to license out Activision’s content to any cloud gaming provider. This will allow gamers to access Activision’s games in different ways, including through cloud-based multigame subscription services. We will now consider this deal under a new Phase 1 investigation.
“This is not a green light. We will carefully and objectively assess the details of the restructured deal and its impact on competition, including in light of third-party comments. Our goal has not changed – any future decision on this new deal will ensure that the growing cloud gaming market continues to benefit from open and effective competition driving innovation and choice.”
“We believe that this development is positive for players, the progression of the cloud game streaming market, and for the growth of our industry,” Smith added. “And as we continue to navigate the review process with the CMA, we remain as committed as ever to bringing the incredible benefits of the acquisition to players, developers, and the industry. Today’s development brings us one step closer to bringing the joy of gaming to players everywhere.”
Ubisoft said the deal will “further strengthen Ubisoft’s content offering through its subscription service Ubisoft+, as well as allowing Ubisoft to license streaming access of the Activision Blizzard catalogue of games, including future releases, to cloud gaming companies, service providers, and console makers”.
“Ubisoft+ will be able to further expand its growing library of titles enabling players the ability to play across multiple platforms including PC, Xbox consoles and Amazon Luna with a single subscription to Ubisoft+ Multi Access, and on the PlayStation platform with Ubisoft+ Classics.”
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Wesley is the UK News Editor for IGN. Find him on Twitter at @wyp100. You can reach Wesley at wesley_yinpoole@ign.com or confidentially at wyp100@proton.me.