Microsoft is altering its proposed $68.7 billion deal with Activision Blizzard to address concerns raised by the UK Competition and Markets Authority (CMA) regarding potential competition issues in the cloud gaming sector. The restructured deal aims to transfer cloud gaming rights for both existing and future Activision Blizzard games to Ubisoft, another major game publisher. The transfer of rights is intended to appease regulators and prevent Microsoft from having exclusive control over cloud gaming for Activision Blizzard titles.
Under the restructured agreement, Ubisoft will gain control over cloud streaming rights for Activision Blizzard PC and console games for the next 15 years, excluding the European Union (EU) region. Ubisoft will then license these titles back to Microsoft for inclusion in Xbox Cloud Gaming. This arrangement will prevent Microsoft from exclusively offering Activision Blizzard games on its cloud gaming platform, and instead, Ubisoft will manage the streaming rights.
Ubisoft will compensate Microsoft for the cloud streaming rights through a one-time payment and a market-based wholesale pricing mechanism, which might include usage-based pricing. Additionally, Ubisoft will be able to offer Activision Blizzard games on cloud gaming services that run non-Windows operating systems. Ubisoft plans to add these games to its Ubisoft Plus Multi Access subscription, available on various platforms including PC, Xbox, Amazon Luna, and PlayStation through Ubisoft Plus Classics.
The CMA, which initially blocked Microsoft’s deal with Activision Blizzard in April due to cloud gaming concerns, has now imposed a final order on the original deal and is investigating the restructured agreement. The CMA’s investigation phase is set to conclude by October 18th, which coincides with the new deadline for the closing of the deal between Microsoft and Activision Blizzard. This delay means that Microsoft may not be able to finalize its acquisition until early October.
Despite the restructured deal, Microsoft’s obligations to the European Commission remain unaffected. EU regulators approved the deal, thanks in part to Microsoft’s commitment to providing free licenses to EU consumers, allowing them to stream Activision Blizzard games through their preferred cloud gaming services. Microsoft’s obligations to other cloud gaming providers, such as Nvidia, Boosteroid, Ubitus, and Nware, will also be upheld.
Xbox chief Phil Spencer praised the company’s handling of the regulatory processes in an internal memo and expressed optimism that the CMA’s review will be completed before the new October 18th deadline. The CMA’s goal remains to ensure that the cloud gaming market maintains healthy competition to foster innovation and choice for consumers.
(Source: Tom Warren | The Verve | – Ashley Capoot | Arjun Kharpal | CNBC)
