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Microsoft Will Sell Activision Cloud Rights To Ubisoft In Latest Attempt To Secure Its Acquisition

Ubisoft has entered the deal.


Microsoft has announced its latest attempt to adjust its acquisition of Activision Blizzard in order to satisfy regulators in the UK. The company has entered into a partnership with Ubisoft, which will see cloud streaming rights for all current and new Activision Blizzard games transferred to Ubisoft over the next 15 years.

This move is a response to a block by the UK's Competition and Markets Authority (CMA), which aimed to prevent the Microsoft and Activision Blizzard merger because the joint entity would have too much power in the cloud gaming space. In an internal memo obtained by The Verge, Xbox's Phil Spencer reportedly confirmed such, saying, "To address the concerns about the impact of the proposed acquisition on cloud game streaming raised previously by the UK Competition and Markets Authority, we are modifying the transaction to acquire a narrower set of rights."

Under this new restructured transaction, Microsoft won't be able to offer Activision Blizzard games exclusively on Xbox Cloud Gaming or to control the licensing terms of those games for competing services. Ubisoft will also compensate Microsoft for the cloud streaming rights to Activision Blizzard's games, and Ubisoft will also be able to offer those same games to cloud gaming services running on non-Windows systems.

"The agreement with Ubisoft has been structured so that Microsoft will still acquire the rights needed to honor fully 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," explained Microsoft vice chair and president Brad Smith.

One possible implication of this new deal is that Activision Blizzard games may not come to Game Pass as streaming titles, although that remains to be seen. Microsoft would have to convince Ubisoft to license its own games back to them for a subscription service like Game Pass.

Microsoft and Activision Blizzard have renegotiated their merger deal and its new deadline to close is October 18. So the two companies are trying to clear any roadblocks before then. While the deal has already been approved in the European Union, the EU Commission stated that it might need to reaccess the deal again. The CMA is now doing a new investigation that's also expected to be done by October 18.

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