Activision Blizzard will sell its streaming rights to Ubisoft Entertainment in an effort to gain approval from the United Kingdom's anti-trust regulator for its $69 billion sale to Microsoft. The new terms state Ubisoft will acquire the cloud streaming rights for Activision's games globally, except in Europe, where the original deal was accepted by Brussels, according to an Aug. 22 Reuters report.
"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," Competition and Markets Authority Chief Executive Sarah Cardell said in the release.
Shares of Activision showed a 1.1% rise, and Microsoft's stock climbed 0.7% in New York before noon, the release reported. Meanwhile, Ubisoft's shares listed in Paris surged by 8.8%, marking the highest gain on the pan-European STOXX 600 index.
In a historical gaming deal announced by Microsoft early in 2022, the acquisition was thwarted by Britain's competition regulator due to concerns of Microsoft gaining excessive control over the budding cloud gaming market. After a protracted deliberation, the Competition and Markets Authority reaffirmed its initial decision to block the deal, compelling Microsoft to present fresh terms, according to the release.
Under the restructured arrangement, Microsoft will be barred from exclusively releasing Activision games like "Overwatch" and "Diablo" on its Xbox Cloud Gaming service or controlling licensing terms for rival platforms. Instead, French gaming competitor Ubisoft will secure the cloud streaming rights for Activision's existing PC and console games, along with any new releases within the next 15 years, the release said.
This global arrangement, however, won't apply in Europe, where the original deal had already been approved by Brussels. Within Europe, Ubisoft will gain a non-exclusive license to Activision's rights, enabling it to offer those games in the region, according to the release.
Microsoft will need to obtain the rights from Ubisoft for Activision's games on its Xbox cloud platform outside of the European Economic Area, as stipulated by the Competition and Markets Authority. EU antitrust regulators are assessing whether Microsoft's proposal to gain UK approval would affect its agreements with the European Commission, the release said.
While the path to approval has been labyrinthine, industry observers, like Tom Smith, a partner at Geradin Partners and former legal director at the Competition and Markets Authority, believe the deal is likely to be cleared, according to the release.
"The process has been torturous, and there's still possibly scope for the wheels to come off, but we shouldn't expect Big Tech deals to sail through nowadays," Smith said in the release.
Microsoft expressed confidence its revamped proposal, markedly different, would be evaluated by the Competition and Markets Authority by Oct. 18, the release reported.
