Summary
- Microsoft has taken steps to address the UK regulator's concerns about its acquisition of Activision Blizzard, which the CMA believes could lead to an unfair advantage in the video game cloud streaming space.
- Microsoft has divested itself of cloud streaming rights for Activision Blizzard games, transferring them instead to Ubisoft Entertainment for the next 15 years.
- If approved, Activision Blizzard games would be available on the Ubisoft+ subscription service via cloud streaming, and Ubisoft also intends to license these games to other cloud streaming and subscription services.
Microsoft has revealed the next steps in its attempt to get the UK’s CMA to approve the pending acquisition of Activision Blizzard. The Competition and Markets Authority, which oversees that country's businesses and anti-competitive behavior, has expressed concerns about the deal since it was first announced in January 2022. In April 2023, the CMA officially moved to block the Activision Blizzard acquisition from going through, which was followed shortly after by an approval from the EU’s European Commission.
The primary concern for the UK regulator was the potential for Microsoft to gain an unfair advantage in the video game cloud streaming space. Despite the roadblock posed by the UK’s decision, both Microsoft and the CMA expressed a desire to come to an agreement, and gamers worldwide have been waiting to see the Xbox giant's new proposal that might appease the UK marketing authority. The amended agreement between Microsoft and Activision Blizzard turns out to be rather unexpected and interesting.
In a surprising turn, Microsoft president Brad Smith announced that a new merger application has been filed in the UK that divests the company of cloud streaming rights of ABK games. Instead, Ubisoft Entertainment will obtain the rights to stream “all current and new Activision Blizzard PC and console games released over the next 15 years.” This transfer of rights will exist “in perpetuity.” Ubisoft, which in the past expressed support for Microsoft’s acquisition of Activision Blizzard, shared its excitement at the new development.
According to the terms of the new agreement, Activision Blizzard games will become part of the Ubisoft+ subscription service via cloud streaming. This does seem like a logical decision, considering that Ubisoft+ is already available on Xbox consoles, through a monthly fee separate from Game Pass, and also offers cloud gaming via Amazon Luna. Just where Luna will fit into this new deal, if at all, is unclear. However, Ubisoft has said that it intends to license the Activision Blizzard library of games to other cloud streaming and subscription services.
For now, the CMA and United States FTC are the only remaining major hurdles for Microsoft to overcome in completing its acquisition of Activision Blizzard. Even after the CMA’s rejection of the deal and a riveting trial between the FTC and Microsoft in June, other countries continued to approve the pending deal.
The CMA, for its part, will hopefully review and share its decision about the new acquisition terms before October 18. Originally, Microsoft’s agreement with ABK had a deadline of July 18, after which the Xbox company would be required to pay a $3 billion termination fee to Activision Blizzard. After the FTC trial, that deadline was extended by 90 days, to October 18, when it became clear that the pivotal CMA and FTC approvals would not be obtained in time.
Source: Microsoft