Microsoft to Sell Activision Blizzard Cloud Streaming Rights to Ubisoft to Get UK Approval - News
by William D'Angelo , posted on 22 August 2023 / 4,631 Views
Microsoft has offered a new remedy to get its Activision Blizzard acquisition approved by the UK regulator, the Competition and Markets Authority (CMA), which is the one place to have blocked the deal.
The proposed restructure by Microsoft in order to get the deal approved includes selling the cloud gaming rights for current and new Activision Blizzard games to Ubisoft. This is designed to address concerns from the CMA over cloud gaming.
"Today, we are taking another important step regarding this transaction," said Microsoft president Brad Smith. "To address the concerns about the impact of the proposed acquisition on cloud game streaming raised by the UK Competition and Markets Authority, we are restructuring the transaction to acquire a narrower set of rights.
"This includes executing an agreement effective at the closing of our merger that transfers the cloud streaming rights for all current and new Activision Blizzard PC and console games released over the next 15 years to Ubisoft Entertainment SA, a leading global game publisher. The rights will be in perpetuity.
"As a result of the agreement with Ubisoft, Microsoft believes its proposed acquisition of Activision Blizzard presents a substantially different transaction under UK law than the transaction Microsoft submitted for the CMA’s consideration in 2022. 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.
"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 compensate Microsoft for the cloud streaming rights to Activision Blizzard’s games through a one-off payment and through a market-based wholesale pricing mechanism, including an option that supports pricing based on usage. It will also give Ubisoft the opportunity to offer Activision Blizzard’s games to cloud gaming services running non-Windows operating systems.
"Of importance, Microsoft’s obligations to provide cloud streaming rights in the European Economic Area remain in place, in full compliance with Microsoft’s commitments to the European Commission. 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. Microsoft is engaging closely with the European Commission to support the EC’s assessment of the agreement and confirmation that the commitments remain undisturbed."
The Ubisoft+ lineup is expanding!
— Ubisoft (@Ubisoft) August 22, 2023
We're excited to announce a new agreement that will bring Activision Blizzard games to Ubisoft+ via streaming upon the completion of Microsoft’s acquisition of Activision Blizzard!
We’ll also be licensing the games to a range of cloud streaming… pic.twitter.com/sZTnEFJedC
Ubisoft has since announced it has signed "an agreement which will give Ubisoft cloud streaming rights to games like Call of Duty and more, coming into effect upon the completion of Microsoft’s acquisition of Activision Blizzard.
"The agreement includes the complete slate of current Activision Blizzard games, as well as all their new titles launching in the 15 years after the closing of Microsoft’s acquisition of Activision Blizzard. The games will land on Ubisoft+, while also allowing Ubisoft to license them to cloud gaming companies, service providers, and console makers."
Ubisoft will be adding the Activision Blizzard games to its Ubisoft Plus Multi Access subscription, which is currently available on Xbox consoles, PlayStation consoles via Ubisoft Plus Classics, PC, and Amazon Luna.
The CMA has now published its final order on the original deal Microsoft had in place, which prohibits them from closing the deal, while it investigates the deal again with this new restructure.
The CMA says "Ubisoft will be able to license out Activision’s content under different business models, including subscription services. The deal also proposes that Ubisoft would have the ability to require Microsoft to provide versions of games on operating systems other than Windows."
The acquisition has been approved in New Zealand, Turkey, South Africa, South Korea, China, the European Union, Ukraine, Japan, Chile, Brazil, Saudi Arabia, and Serbia. Microsoft also won its case against the FTC in the US, which was trying to block the deal.
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
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MS will just buy Ubisoft after this approval..
Which will put them back under review of the CMA and they'll end up back in the same situation. They'd be better off just buying other devs and not drawing the attention of anymore regulators for now.
Alot smaller
Yeah i know, im just having alittle fun. MS wont attempt buying Ubi, just was funny since they are buying so much these days
They'd be even better still to buy parts of companies (such as certain franchises, or certain divisions). Far less government oversight that way. For example, Sega Sammy selling off just Sega (as most of their profit comes from pachinko), or Konami selling off their console PC division (most of their profit comes from pachinko and mobile), or Ubisoft selling off everything that's not Assasin's Creed. :P
Less government oversight when selling parts of a company vs. the whole thing.
Hopefully not
Nah, they will go for a Japanese one first. But they might buy shares in Ubisoft.
Good to see the CMA doing their job and (it appears) getting an outcome which is better for gamers. The fact it’s world wide (bar the eu) means more will benefit.
How is this outcome better for gamers?
First of all - the agreement is worldwide (bar the EU). If the deal/compromise with UBI was bad for gamers, to minimise the damage or fallout Microsoft could have applied this solely to the UK. Instead they said they will go further and also without pre-agreeing this form of remediation with the CMA.
Second - its for every single game past, present & future (for 15years) with no restrictions with a games developer who is independent of the main platforms.
Microsoft had made their deal with the EU apply on a worldwide basis which was a free license to any Cloud Gaming Provider. The CMA's deal is handing the licenses over to Ubisoft who will charge for the licenses. The CMA deal is WW because the CMA wants WW concessions.
They can't go fully WW now because a contract between Microsoft/EU already exists and still stands, however, Ubisoft does have a EU contract as part of this deal, for now though, it would be a choice between Ubisoft (paid license) or Microsoft (free license) in the EEA.
This deal is worse for businesses who have to pay Ubisoft for ABK licenses rather than the free offer before. That may be worse for consumers as there could be less options if they can't afford the licenses. Costs of license acquisition may also be passed down to the consumer.
This deal also doesn't appear to prevent anyone from just paying a large fee to Ubisoft to get content exclusively or barring out other rivals. However, I am not sure if Nvidia/Boosteroid/Ubitus/Nware deals still apply WW or will be changed to EU only.
But it's a bit unfair if those still apply worldwide, a free license to all ABK content (and XGS/Zenimax) but now everyone else will have to pay Ubisoft, Lol. Cloud Gaming is hard enough to get into without adding extra fees everywhere.
It would have been simpler for everyone and better if the CMA just accepted EU's concessions but tweak them a little. Extend them to 15 years and get it down in writing to apply WW because Microsoft's current deal with EU is EEA only but Microsoft informally applied it WW.
But the CMA's ego is large and they wanted a deal of their own making. They didn't want to accept the EU's and tweak them, not after they moaned at them for approving it. They could have made some good tweaks to a free license but instead just changed it to a paid license.
I don't think it really matters if Ubisoft has 15 years worth of ABK content after the 15 years is up, not when like 80% of ABKs content is online only or online focused, Microsoft can easily just shut down the servers for older games and turn them into paperweight.
what a joke!!!
If the joke that is the CMA still decides to oppose after this over-generous deal from Microsoft, they need to just take the nuclear option and pull business out of the UK in order to close the deal. No single country is worth sinking a deal this big over, not even Xbox's 2nd largest market.
They wont do that. Gaming isn't worth that much to Microsoft they that will pull out all their business from the UK.
Don't think they would need to pull everything out, just Xbox. CMA has no jurisdiction over a gaming acquisition if Xbox operates no gaming in the UK.
Sounds fair. ^^
I'll find it completely hilarious if MS just straight up shakes hands with ubisoft for this, then turns around shortly after "oh I'm buying you guys out too btw, so I'll need that back in a year or two".
I wouldnt be suprised if they are a target 10 years from now
Suddenly Ubisoft in one swoop will be completely fine financially xD
Also pretty much immune to a takeover as I'm pretty sure in the event of them being bought the licenses will revert to MSFT who will auction them off again.
then when goes through they will announce a ubisoft+ merger with Gamepass to get them on x-cloud like did with EA play, LOOPHOLE :D but ive never really cared about cloud gaming myself aslong as it dont effect them coming to gamepass
I don't think you understand what the deal is if you see a loophole there. Ubisoft+ is a service... Ubisoft is a company (that the CMA will never let Microsoft acquire now). Even if Ubisoft+ is merged (which makes no sense anyway); everything that the CMA wants is still there. Ubisoft (not Ubisoft+) can still sell the licence to stream to cloud provider and Microsoft is out of the equation.
So no, Ubisoft+ merging with GamePass would have zero impact on any of this.
I'm not sure if this actually addresses the complaint.... which is that UK businesses would be disadvantaged in cloud by this deal. Perhaps rights should be sold to a UK company? Or perhaps they should give rights to all companies including Sony and Nintendo.
The complaint... Is about Microsoft having control over the cloud market by choosing who is getting those games or not. By giving this right to another company, it solves the problem of the Microsoft acquisition.
The goal of this is not to solve all possible problems for another cloud provider, this removes the problem from Microsoft's standpoint... This is not about preventing Microsoft to try to do things to get an edge in the cloud if they can (all competitors can do that and have the right to do so), it is about preventing them to use Activision games to do so. This completely fixes it and 100% addresses the complaint from the CMA.
Xbox/MS “leadership” humiliated once again. If they just accepted the far better CAT ruling, this deal would have been done already, and they wouldn’t lose any money in the UK cloud market.
Who in their idiotic mind at MS or Xbox made this decision ? Well, what we know for sure, is that the joke that is the gaming media will never ask this serious question.
And if Xbox thinks that this pathetic deal will curry favour with the UK regulators, watch the corrupt UK CMA immediately try to block the next “big” Publisher Xbox tries to buy .
The CMA hates Xbox, and through this whole torturous process they’ve literally never shown that they are seriously willing to change their mind. Embarrassing.
I'm going to take a guess here and believe that MS found that paying for lawyers to continue a trial with CAT would be more expensive than any profit they would make out of cloud gaming in the foreseeable future. On the plus side of things, if their cloud game starts making money they'll get everything right back in 15 years and no one will be able to stop them.
