Microsoft will sell Activision cloud gaming rights to Ubisoft to gain UK approval. It's a major restructuring of Microsoft's $68,7 billion Activision Blizzard deal.
Microsoft is restructuring its proposed Activision Blizzard agreement to transfer cloud gaming rights to Ubisoft for existing and new Activision Blizzard games. The transfer of rights is designed to appease regulators in the UK, who are concerned about the impact of Microsoft's proposed $68.7 billion deal on cloud gaming competition. The restructured deal triggered a new regulatory investigation in the UK that could run until 18 October.
“To address concerns about the impact of the acquisition recommended by the UK Competition and Markets Authority on cloud game publishing, we are restructuring the transaction to acquire a narrower set of rights,” said Microsoft President Brad Smith. “This includes the signing of an agreement transferring the cloud streaming rights of all existing and new Activision Blizzard PC and console games to be released within the next 15 years to Ubisoft Entertainment SA, a leading global game publisher, that will go into effect at the close of our merger. These rights will last forever.”
This restructured deal means that Activision Blizzard won't be able to stream its games exclusively on Xbox Cloud Gaming if Microsoft completes its proposed deal. Microsoft will also not be able to exclusively control the license terms of Activision Blizzard games on competing services.
“Ubisoft will pay Microsoft for cloud streaming rights to Activision Blizzard's games through a market-based wholesale pricing mechanism, including a one-time payment and an option that supports usage-based pricing,” Smith said. “This agreement will also give Ubisoft the opportunity to offer Activision Blizzard's games to cloud gaming services running non-Windows operating systems.”
Ubisoft will also add Activision Blizzard games to its Ubisoft Plus Multi Access subscription, available on PC, Xbox, Amazon Luna, and PlayStation via Ubisoft Plus Classics.
Britain's Competition and Markets Authority (CMA) first blocked Microsoft's deal in April, citing cloud gaming concerns, then agreed to negotiate with the Xbox manufacturer after the Federal Trade Commission (FTC) lost the case in US federal court last month. Now, thanks to Microsoft's restructured deal, the CMA has signaled a new phase of investigation and has set a legal deadline for October 18 – the same deadline Microsoft recently agreed when extending the deal closing date with Activision. A source familiar with Microsoft's plans told The Verge that the company does not expect to finalize the Activision Blizzard deal until early October.
The CMA has now placed a final order on Microsoft's original deal, banning it worldwide as it investigates this new remake of the proposed Activision Blizzard acquisition. The CMA also states that “if Ubisoft decides to use or license the cloud streaming rights of Activision's games to a cloud gaming service running a non-Windows operating system, Microsoft will request a fee from Microsoft to adapt Activision's games for non-Windows operating systems such as Linux. he can do”.
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However, the restructured transaction will not affect Microsoft's obligations to the European Commission. Microsoft has entered into several cloud gaming deals, and EU regulators have approved the Activision Blizzard agreement, thanks to a free license that allows consumers in EU countries to stream any current and future Activision Blizzard PC and console games they have licensed through “any cloud game streaming service of their choice.”
“The agreement with Ubisoft aims to obtain the rights necessary for Microsoft to fully comply with its legal obligations under its commitments to the European Commission, as well as its existing contractual obligations to other cloud game streaming providers, including Nvidia, Boosteroid, Ubitus and Nware. It is structured to continue.”
The CMA will now consider the reworked deal in the coming weeks and make a decision by October 18. “This is not a green light. We will carefully and objectively evaluate the details of the restructured agreement and its impact on competition, including comments from third parties,” said Sarah Cardell, CMA Chief Executive Officer. “Our aim remains unchanged – any future decision regarding this new deal will ensure that the growing cloud gaming market continues to benefit from open and effective competition that fosters innovation and choice.”
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