Microsoft has announced a restructuring of its planned acquisition of Activision Blizzard that it believes will allow the deal to be approved by the UK Competition and Markets Authority. The company has revealed that if the $69 billion deal goes through, Microsoft will sell off the cloud gaming rights for all current and future Activision Blizzard PC games for 15 years to another game publisher, Ubisoft.
In a blog post, Microsoft president Brad Smith stated:
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. The agreement will enable Ubisoft to innovate and encourage different business models in the licensing and pricing of these games on cloud streaming services worldwide.
Ubisoft will make a one-time payment to Microsoft for the Activision Blizzard cloud gaming rights, along with “a market-based wholesale pricing mechanism, including an option that supports pricing based on usage.” Ubisoft can also offer Activision Blizzard’s PC games to cloud gaming services that don’t use Windows-based operating systems.
The UK CMA regulation agency blocked Microsoft’s purchase of Activision Blizzard in April, stating that the deal would “would damage competition in the Cloud Gaming market.” Today, the CMA announced that it will “now consider this deal under a new Phase 1 investigation.” The deadline for a decision based on the new investigation is October 18.
However, the CMA added that this new Microsoft deal proposal is not a guarantee that it will approve the company’s purchase of Activision Blizzard:
This is not a green light. We will carefully and objectively assess the details of the restructured deal and its impact on competition, including in light of third-party comments. Our goal has not changed – any future decision on this new deal will ensure that the growing cloud gaming market continues to benefit from open and effective competition driving innovation and choice.
The CMA also revealed it had rejected Microsoft’s submission that the final order to block its originally proposed deal should not be enforced:
Microsoft argued that, for various reasons, there had been a material change of circumstances since the original decision. After careful consideration, this was rejected by the independent inquiry group.
That’s likely the reason why Microsoft is making this new proposal. Ubisoft has posted its own announcement, stating:
With a single subscription to Ubisoft+ Multi Access, players will soon be able to play their favorite Ubisoft and Activision Blizzard games across multiple platforms including PC, Xbox consoles and Amazon Luna, and on the PlayStation platform through Ubisoft+ Classics. The agreement will offer players even greater access to a large library of beloved and classic titles as well as the newest releases, all through cloud streaming.
So now everyone has to wait for another couple of months while the UK CMA makes a final decision on this revised proposal.