Microsoft to Acquire Ubisoft Streaming Rights for Activision Blizzard in Bid to Gain UK Approval

In a recent blog post, Microsoft announced a major revision to its proposed merger with Activision Blizzard. The company plans to sell the cloud gaming rights for Activision Blizzard games to Ubisoft, a rival company. This move aims to address the concerns raised by UK regulators, who previously blocked the deal due to Microsoft’s potential monopoly in cloud gaming. However, the approval for this revised proposal is not expected until October 18th.

“As a result of the agreement with Ubisoft, Microsoft believes that its proposed acquisition of Activision Blizzard is a materially different transaction under UK law than the transaction that Microsoft submitted for consideration by the CMA in 2022,” Microsoft president Brad Smith wrote.

If the merger is successful, Microsoft will transfer “the cloud playback rights for all current and new Activision Blizzard PC and console games over the next 15 years to Ubisoft Entertainment SA, a leading global game publisher. The rights are in perpetuity,” Smith added. This means that Microsoft would not be able to make Activision Blizzard games exclusive to Xbox Cloud Gaming, and would have no say in how they are published on competing services. It also allows Ubisoft to offer Activision Blizzard cloud gaming services to Apple and other non-Windows systems.

As for the terms of the deal, “Ubisoft will compensate Microsoft for the cloud streaming rights to Activision Blizzard’s games for a one-time fee and through a market-based wholesale pricing mechanism, including an option to support usage-based pricing,” says Smith. said.

In its own blog post, Ubisoft announced that Activision Blizzard games will be available on multiple services if the deal goes through. “With a single subscription to Ubisoft+ Multi Access, gamers will soon be able to play their favorite Ubisoft and Activision Blizzard games across multiple platforms, including PC, Xbox consoles and Amazon Luna, as well as PlayStation via Ubisoft+ Classics,” wrote Ubisoft’s Daniel O. ‘Connor.

The UK’s Competition and Markets Authority (CMA) blocked the proposed merger earlier this year, citing monopoly concerns over cloud gaming as the primary issue. However, after the US Federal Trade Commission (FTC) lost its appeal to block the merger, the CMA agreed to continue negotiations until August 29. “Based on discussions to date, both parties – Microsoft and the CMA – are confident that Microsoft announcing the restructuring will be able to address the concerns identified by the CMA,” the CMA said in July.

The UK regulator is now reviewing the restructuring and will make a decision by October 18, it said in an article published today. “This is not a green light. We will carefully and objectively evaluate the details of the reorganization and its impact on competition, including comments from third parties,” said CMS CEO Sarah Cardell. “Our goal has not changed – any future decision we make on this new agreement will ensure that the growing cloud gaming market continues to benefit from open and effective competition that drives innovation and choice.”