Microsoft Sells Activision Cloud Gaming Rights to Ubisoft In an Attempt to Win Over the CMA

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If you thought Microsoft’s proposed acquisition of Activision Blizzard would be nearing an end as the CMA’s decision was due later this month, you were wrong. In a new turn of events, the UK regulators have extended their deadline to October 18, which is also the termination date of the deal, in response to Microsoft “restructuring” the transaction.

Announced today to appease the CMA, Microsoft has sold their cloud streaming rights for all current and new (for the next 15 years) Activision Blizzard titles (on PC and consoles) to Ubisoft Entertainment. The rights will be in perpetuity.

As a result, the transaction has become a “substantially different” merger, and Microsoft has notified the CMA of this restructured merger. Under the restructured transaction, Microsoft will not be in a position either to release Activision Blizzard games exclusively on its own cloud streaming service – Xbox Cloud Gaming – or to exclusively control the licensing terms of Activision Blizzard games for rival services.

The agreement provides Ubisoft with:

  • a unique opportunity to commercialize the distribution of games via cloud streaming.
  • enable Ubisoft to innovate and encourage different business models in the licensing and pricing of these games on cloud streaming services worldwide.
  • Ubisoft will compensate Microsoft for the cloud streaming rights to Activision Blizzard’s games through a one-off payment and through a market-based wholesale pricing mechanism, including an option that supports pricing based on usage.
  • give Ubisoft the opportunity to offer Activision Blizzard’s games to cloud gaming services running non-Windows operating systems.

In response to this, the CMA has started its merger inquiry for the new transaction today and is asking for comments from other gaming companies. The deadline for the CMA to provide Microsoft with a phase 1 decision is on October 18, but of course, that can be extended if the merger goes into a phase 2 investigation.

Microsoft claims that today’s development brings them one step closer to bringing the “joy of gaming to players everywhere.” But we will have to wait and see how it all pans out.

Source(s): CMA, Microsoft

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