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Microsoft Plans to Transfer Activision Blizzard Streaming Rights to Ubisoft for UK Regulatory Approval

AP Foto/Peter Morgan

Microsoft is altering its Activision Blizzard acquisition strategy, offering cloud gaming rights for Activision Blizzard titles to competitor Ubisoft, as stated in a recent blog post. This move comes in response to concerns raised by UK regulators about Microsoft’s potential supremacy in the cloud gaming sector. The final decision is expected around October 18th.

Microsoft’s President, Brad Smith, expressed confidence that this new approach would present the merger in a different light under UK regulations, compared to the original proposal submitted in 2022.

Should the merger be approved, Microsoft intends to hand over the “cloud streaming rights for all current and upcoming Activision Blizzard PC and console games for the subsequent 15 years to Ubisoft Entertainment SA, a top-tier global gaming publisher. The rights will have no expiration,” detailed Smith. This arrangement implies that Microsoft cannot make Activision Blizzard’s games exclusive to Xbox Cloud Gaming and will not influence their release on competitive platforms. Furthermore, Ubisoft will have the liberty to offer cloud gaming services for Activision Blizzard games on platforms like Apple and those not running on Windows.

Regarding the deal’s specifics, Smith mentioned, “Ubisoft will reimburse Microsoft for Activision Blizzard game streaming rights through an initial payment and a market-aligned wholesale pricing structure, which includes a usage-based pricing option.”

Ubisoft shed light on its strategy, should the deal proceed, emphasizing the broad availability of Activision Blizzard titles. “With an all-inclusive subscription to Ubisoft+ Multi Access, players will soon have the ability to indulge in their beloved Ubisoft and Activision Blizzard titles across diverse platforms. This encompasses PC, Xbox consoles, Amazon Luna, and via Ubisoft+ Classics on the PlayStation platform,” highlighted Ubisoft representative Daniel O’Connor.

The initial merger proposal faced a blockade by the UK’s Competition and Markets Authority (CMA) due to predominant worries about a monopoly in the cloud gaming realm. However, after the US Federal Trade Commission’s (FTC) appeal to prevent the merger was overruled, the CMA decided to prolong negotiations until August 29th. In a July statement, the CMA voiced optimism, explaining, “From the dialogues so far, both Microsoft and the CMA harbor a belief that Microsoft introducing a reconfigured deal can aptly address the CMA’s voiced concerns.”

The CMA’s next step involves a thorough analysis of the modified proposal, aiming to declare their judgment by October 18th, as highlighted in a recent publication. “This shouldn’t be perceived as an automatic approval. We’ll meticulously and impartially delve into the specifics of the revamped proposal and gauge its implications on market competition, also taking third-party viewpoints into account,” stated CMA’s chief executive, Sarah Cardell. She further emphasized, “Our core objective remains unwavering — any ensuing decision regarding this fresh proposition will ensure the burgeoning cloud gaming sector consistently thrives on robust competition, which fuels innovation and expands options.”

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