Ubisoft To Acquire Cloud Gaming Rights From Microsoft and Activision Blizzard

Microsoft on Tuesday submitted a revised proposal to Britain’s antitrust watchdog to approve its $68.7 billion purchase of gaming giant Activision Blizzard.

As part of the restructuring, Microsoft will transfer the cloud gaming rights for current and new Activision Blizzard games to French video game publisher Ubisoft.

“We are addressing the concerns raised by the UK Competition and Markets Authority (CMA) about the impact of the proposed acquisition on cloud game streaming. We are restructuring the deal and acquiring a narrower set of rights,” said Brad Smith, Microsoft’s vice chairman and president.

This includes the implementation of an agreement, effective upon completion of the merger, that will transfer cloud streaming rights for all current and new Activision Blizzard PC and console games over the next 15 years to Ubisoft Entertainment.

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.

“Therefore, Microsoft has notified the CMA of the restructuring and expects that the CMA’s review processes can be completed before the 90-day extension of its acquisition agreement with Activision Blizzard expires on October 18,” Smith added.

With the restructuring, Microsoft will not be able to publish Activision Blizzard games exclusively on its own cloud streaming service, Xbox Cloud Gaming, or exclusively control the licensing terms of Activision Blizzard games on competing services.

Smith said the deal will allow Ubisoft to innovate and encourage different business models for licensing and pricing these games on cloud streaming services worldwide.

“Ubisoft will compensate Microsoft for the cloud streaming rights to Activision Blizzard’s games with a one-time fee and a market-based wholesale pricing mechanism, including an option that supports usage-based pricing,” he said.

It also allows Ubisoft to offer Activision Blizzard games to cloud gaming services with non-Windows operating systems.

Microsoft has also made binding legal commitments to bring Call of Duty video games to rival consoles and Activision Blizzard games to rival cloud streaming platforms.