Microsoft Proposes New Deal to CMA for Ubisoft to Stream Activision Blizzard Games
Microsoft has submitted a new deal to the U.K.’s Competition and Markets Authority (CMA) regulatory agency, proposing that Ubisoft be granted the rights to stream Activision Blizzard games for the next 15 years. This comes after the CMA blocked Microsoft’s previous proposed acquisition of Activision Blizzard for $69 billion due to concerns over cloud gaming.
Alternative Solution
In response to the CMA’s decision, Microsoft turned to the U.S. Federal Trade Commission (FTC) for approval. However, a California judge denied the FTC’s request for a preliminary injunction against the acquisition. Microsoft then decided to put its appeal efforts on hold and negotiate with the CMA, with the deadline extension set to August 29, 2023.
Today, the CMA confirmed that it is blocking Microsoft’s original proposed deal. However, Microsoft has presented a new deal that would transfer the streaming rights of Activision Blizzard games to Ubisoft for 15 years. This includes games on both PC and consoles.
Microsoft’s Perspective
Microsoft believes that this new deal with Ubisoft represents a significantly different transaction than what was originally submitted to the CMA. In their blog post, Microsoft states, “As such, Microsoft today has notified the restructured transaction to the CMA and anticipates that the CMA review processes can be completed before the 90-day extension in its acquisition agreement with Activision Blizzard expires on October 18.”
Restructured Transaction
Under the restructured transaction, Microsoft states that it will not have the exclusive rights to release Activision Blizzard games on its cloud streaming service, Xbox Cloud Gaming, nor will it have exclusive control over the licensing terms of these games on rival services. Ubisoft will compensate Microsoft for the streaming rights to Activision Blizzard games through a one-off payment and a market-based wholesale pricing mechanism, including an option for pricing based on usage.
This deal also allows Ubisoft to offer Activision Blizzard games on cloud gaming services on non-Windows machines.
CMA Review Process
The CMA has confirmed that it has received this new deal proposal, but it has yet to give it the green light. CMA chief executive Sarah Cardell states, “We will now consider this deal under a new Phase 1 investigation,” essentially treating it as a completely new offer. Cardell emphasizes that the goal remains the same—to ensure that competition drives innovation and choice in the growing cloud gaming market.
Microsoft Vice Chair and President Brad Smith tweeted about the restructured proposal, stating that it also upholds their prior commitments. He provided a link to further information on the matter.
Regulatory Approval
Microsoft has been working to earn regulatory approval for the acquisition since the initial announcement in January of last year. They have addressed concerns by entering legally binding contracts to bring Activision Blizzard games to rival platforms. This has resulted in approvals from more than 40 countries.
Microsoft sees this development as positive for players and the growth of the cloud gaming market. They remain committed to bringing the benefits of the acquisition to players, developers, and the industry. The aim is to continue the review process with the CMA and move closer to making gaming accessible to players everywhere.
Statements from Activision Blizzard and Ubisoft
In a message to the company, Activision Blizzard CEO Bobby Kotick expressed appreciation for Microsoft’s new proposal and its commitment to clearing any final hurdles in the review process. Ubisoft Senior Vice President Chris Early expressed his excitement over the deal, stating that it will provide players with more opportunities to access and enjoy some of the biggest gaming brands.
Conclusion
The proposal for Ubisoft to handle the streaming of Activision Blizzard games in the U.K. is still under review. The CMA will thoroughly assess the details of the restructured deal and its impact on competition, taking third-party comments into account throughout the process. The ultimate goal is to ensure open, effective competition that drives innovation and choice in the cloud gaming market.
Let us know what you think about Ubisoft taking on the streaming rights for Activision Blizzard games in the U.K. in the comments below!