Microsoft sells Activision cloud game rights to Ubisoft in a bid to gain UK approval

Microsoft is restructuring a proposed Activision Blizzard deal to transfer cloud gaming rights to existing and new Activision Blizzard games to Ubisoft. The transfer of rights is designed to appease UK regulators who are concerned about the impact of Microsoft’s proposed $68.7 billion deal on cloud gaming competition. The restructured deal has sparked a new regulatory investigation in the UK that could run until October 18.

“To address concerns about the impact of the proposed acquisition on cloud gaming streaming raised by the UK Competition and Markets Authority, we are restructuring the deal to gain a narrower set of rights.” Says Microsoft President Brad Smith. This includes the execution of an agreement effective upon closing of our merger that transfers the cloud streaming rights to all current and new Activision Blizzard games for PC and consoles released over the next 15 years to Ubisoft Entertainment SA, the leading global game publisher. The rights will be perpetual. .”

This restructured deal means that if Microsoft closes the proposed acquisition, it will not be able to release Activision Blizzard games exclusively on Xbox Cloud Gaming. Microsoft will not be able to exclusively control the license terms for Activision Blizzard games on competing services either. Instead, Ubisoft will control the streaming rights to Activision Blizzard games outside the EU, and license the titles back to Microsoft to be included in Xbox Cloud Gaming.

“Ubisoft will reimburse Microsoft for the cloud streaming rights to Activision Blizzard games through a one-time payment and through a market-based wholesale pricing mechanism, including an option that supports usage-based pricing,” Smith explains. “It will also give Ubisoft the opportunity to bring Activision Blizzard games to non-Windows cloud gaming services.”

Ubisoft will also add Activision Blizzard games to its system Ubisoft Plus Multiple Access Subscription available on PC, Xbox, Amazon Luna and on PlayStation via Ubisoft Plus Classics.

The UK’s Competition and Markets Authority (CMA) first blocked Microsoft’s deal in April over cloud gaming concerns, before agreeing to negotiations with the Xbox maker after the Federal Trade Commission (FTC) lost in a US federal court last month. Now the CMA has signaled a new investigation phase thanks to Microsoft’s restructured deal, with a statutory deadline of October 18 — the same deadline that Microsoft recently agreed to extend the closing date of the deal with Activision. says a source familiar with Microsoft’s plans the edge The company now doesn’t expect to be able to close the Activision Blizzard deal until early October.

The CMA has now imposed a final injunction on the original Microsoft deal, blocking it worldwide while it investigates this new restructuring of the proposed acquisition of Activision Blizzard. the Notes of the Capital Markets Authority “Ubisoft will also be able, for a fee, to request Microsoft to adapt Activision titles to operating systems other than Windows, such as Linux, if you decide to use or license cloud streaming rights to Activision titles to a non-Windows operating system cloud game service.”

However, the restructured deal will not affect Microsoft’s obligations to the European Commission. Microsoft has struck several cloud gaming deals and EU regulators approved the Activision Blizzard deal thanks to a free license for EU consumers that allows them to stream on “any cloud game streaming services of their choice” to all current and future Activision Blizzard PCs and consoles. console games for which they have a license.

“The agreement with Ubisoft is structured so that Microsoft will still obtain the rights necessary to fully fulfill its legal obligations under its obligations to the European Commission, in addition to its existing contractual obligations to other cloud game streaming providers, including Nvidia, Boosteroid, Obitus, and Noir,” Smith says.

The Capital Markets Authority will now evaluate the reformulated deal over the coming weeks and issue a decision by the October 18 deadline. “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,” says Sarah Cardell, CEO of the Capital Markets Authority. “Our objective has not changed – any future decision on this new deal It will ensure that the growing cloud gaming market continues to benefit from open and efficient competition that drives innovation and choice.”