In a strategic maneuver, Microsoft is in the process of transferring cloud gaming rights for Activision Blizzard’s extensive portfolio of games to Ubisoft.
This collaboration is part of Microsoft’s effort to address concerns raised by UK regulators over its proposed $69 billion acquisition of Activision Blizzard.
Initially unveiled in early 2022, Microsoft’s plan to acquire Activision Blizzard faced resistance from Britain’s anti-trust regulator, which harbored concerns about potential dominance in the nascent cloud gaming market.
Following months of negotiations, the Competition and Markets Authority (CMA) upheld its decision to thwart the deal. In response, Microsoft crafted a revised proposal aimed at meeting regulatory prerequisites.
Under the restructured terms, Microsoft will relinquish exclusive rights to release games such as “Call of Duty,” “Overwatch,” and “Diablo” on its proprietary cloud gaming platform, Xbox Cloud Gaming. Instead, Ubisoft is set to secure cloud streaming rights for both existing and future Activision Blizzard PC and console games over the next 15 years. This arrangement is slated to encompass global markets, with the exception of Europe, where the original agreement was already greenlit by Brussels.
Brad Smith, President of Microsoft, expressed confidence in the revised proposal and anticipates CMA’s review by October 18. The CMA will meticulously scrutinize the new arrangement using its standard assessment process, with the overarching aim of maintaining an open and competitive environment within the flourishing cloud gaming sector.
This pivotal shift in Microsoft’s approach represents a noteworthy victory for the CMA, underlining its assertive stance on tech-related deals following the UK’s exit from the European Union. While the Federal Trade Commission in the United States initially opposed the deal, the European Union eventually approved it after Microsoft committed to licensing Activision Blizzard games to other platforms.
Ubisoft’s acquisition of cloud streaming rights will be facilitated through a one-time payment and a market-oriented wholesale pricing mechanism. This setup seeks to foster healthy competition, ensuring gamers enjoy a diverse array of choices.
In parallel with Ubisoft’s role in cloud streaming, the prominent French gaming entity intends to seamlessly integrate Activision Blizzard games into its existing Ubisoft Plus Multi Access subscription. While Ubisoft assumes these rights, Microsoft remains steadfast in fulfilling its legal obligations, both as per the European Commission’s directives and ongoing contractual agreements with other cloud gaming providers.
Although the restructured deal demonstrates Microsoft’s commitment to assuaging regulatory apprehensions, the ultimate closure of the transaction hinges on the CMA’s forthcoming verdict in early October. As the industry eagerly awaits the outcome, it’s clear that the result will significantly shape the trajectory of cloud gaming for years to come.