What just happened? Microsoft is taking drastic measures as it attempts to win approval from the UK's anti-trust regulator to acquire Activision Blizzard. The Redmond giant has announced it will sell its streaming rights for current and new Activision Blizzard games to Ubisoft in the hope of addressing concerns about the impact of the proposed acquisition on cloud game streaming.
The UK's Competition and Markets Authority (CMA) has been a thorn in the side of Microsoft's attempted $69 billion acquisition of Activision Blizzard. It was the first regulator to block the deal and is the last opposed to the merger. The CMA has cited concerns about the cloud gaming sector, saying the buyout would damage competition in this market, leading to less innovation and choice for gamers.
In a post earlier today, Microsoft president Brad Smith wrote that the company would be restructuring the transaction to acquire a narrower set of rights. This includes transferring the cloud streaming rights for all current and new Activision Blizzard PC and console games released over the next 15 years to Ubisoft (this excludes the European Economic Area). The agreement will be effective at the closing of the merger, and the rights will be in perpetuity.
The Ubisoft+ lineup is expanding!– Ubisoft (@Ubisoft) August 22, 2023
We're excited to announce a new agreement that will bring Activision Blizzard games to Ubisoft+ via streaming upon the completion of Microsoft's acquisition of Activision Blizzard!
We'll also be licensing the games to a range of cloud streaming… pic.twitter.com/sZTnEFJedC
The restructure means that if Microsoft does manage to close the deal, it will not be allowed to release Activision Blizzard games exclusively on Xbox Cloud Gaming, nor will it be able to dictate licensing terms for rival services.
The agreement will also allow Ubisoft to control licensing and pricing of Activision Blizzard games on cloud game streaming services, including those running on non-Windows operating systems. Smith wrote that the French company will "compensate Microsoft for the cloud streaming rights to Activision Blizzard'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's own announcement confirms that the complete and upcoming slate of Activision Blizzard games will be coming to Ubisoft+. With a single subscription to Ubisoft+ Multi Access, players will receive access to Ubisoft and Activision Blizzard games across multiple platforms including PC, Xbox consoles, and Amazon Luna, and on the PlayStation platform through Ubisoft+ Classics.
After the CMA blocked the deal in April, Microsoft defeated the US FTC in federal court to leave the UK watchdog as the sole agency it had to appease. The regulator agreed to renegotiate with Microsoft last month, extending negotiations until August 29. Having informed it of the restructured transaction, the CMA will carry out a new investigation with the deadline for a decision set for October 18. The regulator emphasized that this does not mean it has given Microsoft a green light for the deal to go ahead.
While Microsoft might have done enough to satisfy the the CMA, the restructuring could force the EU to reassess the deal. "The Commission is carefully assessing whether the developments in the UK require another notification to the Commission," European Commission spokesperson Arianna Podesta told The Verge.