To appease the UK, Microsoft restructures its Activision deal by agreeing to sell off Activision cloud gaming rights to Ubisoft; the UK CMA will now investigate

Microsoft is restructuring its proposed Activision Blizzard deal to transfer cloud gaming rights for current and new Activision Blizzard games to Ubisoft.

The Verge 2023-08-22 Tom Warren

Context & Ripple Effects

Microsoft and Activision had reportedly been considering a sale of UK cloud-gaming rights to address the regulator's objections; this restructuring turns that prospective remedy into a transaction with Ubisoft. The CMA's investigation makes the buyer and the transferred rights central to whether the acquisition can proceed.

The subsequent coverage traces a clear regulatory arc: the CMA later said the revised proposal appeared to address its concerns and ultimately approved the acquisition after the rights remedy cleared the way for approval.

First-order effects

Ubisoft becomes the holder of cloud-gaming rights for current and new Activision Blizzard games under the revised arrangement, while Microsoft gives up direct control of those rights in the affected scope.
The CMA shifts from blocking the original structure to investigating the revised one, leaving Microsoft and Activision with a regulatory review rather than an immediate resolution.

Second-order effects

Ubisoft gains a stronger position in negotiations over cloud distribution of Activision titles; Microsoft must pursue its cloud strategy within the licensing arrangement instead of solely through ownership.
Other cloud-gaming providers have a clearer reason to watch the remedy's terms, since access to major game catalogs can be determined by a rights holder separate from the platform owner.

Third-order effects

The deal suggests merger remedies in digital markets may increasingly separate control of content rights from ownership of the underlying publisher when regulators focus on emerging distribution channels.
If this model holds, large platform acquisitions may be judged not only on present market share but on whether post-deal licensing preserves independent routes to cloud distribution.

The trend: Cloud gaming is becoming a distinct antitrust layer in game-industry consolidation, with rights divestitures used to preserve rival distribution options.

Discussion

Gameranx Ryan Parreno on x
Ubisoft Will Now Stream Activision Blizzard Games, Compelling The CMA To Start Over
Pure Xbox Fraser Gilbert on x
Microsoft Announces Plan To Sell Activision Cloud Gaming Rights To Ubisoft
@ubisoft @ubisoft on x
The Ubisoft+ lineup is expanding! 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..…
@kellen_browning Kellen Browning on x
The CMA focused its concerns around Microsoft attaining dominance in cloud gaming, so this could appease it. But also, don't know how significant this is in the overall scope of the acquisition. Really depends on if cloud gaming ends up taking off — right now it's negligible.
@charlieintel @charlieintel on x
Microsoft has announced it intends to sell cloud gaming rights for Activision Blizzard games to Ubisoft, following the acquisition's closure. UK CMA is now opening a new merger investigation, and now the deal most likely won't close till October. [image]
@steffanpowell Steffan Powell on x
I did not have UbiSoft getting involved in the Microsoft / Activision / CMA negotiations on my bingo card for this story but here we are. On the surface, looks like a win win for both parties - CMA save face as the deal is changed - Msft get a deal https://www.gov.uk/...
@aarmstrong_says Ashley Armstrong on x
Big news on Microsoft-Activision Blizzard deal : Microsoft files new deal with UK competition regulators for Call of Duty video game maker, agreeing to spinoff cloud streaming rights on closure . CMA will likely feel vindicated for being the lone regulatory voice to block. [image…
@martinsfp @martinsfp on x
Under Microsoft and Activision Blizzard's new deal to appease the UK's CMA, “Activision's cloud streaming rights outside the European Economic Area will be sold to Ubisoft” Well that will make cloud gaming more complicated and confusing for consumers. https://giftarticle.ft.com/.…
@tomwarren Tom Warren on x
regulators in the UK and Europe have managed to secure big changes to Microsoft's Activision Blizzard deal that will ultimately benefit consumers through choice. What has the FTC managed to do?
@cmagovuk @cmagovuk on x
Microsoft has proposed a new, restructured deal to acquire Activision and submitted it to the CMA for review. The CMA has now opened a new phase 1 investigation into the deal. https://www.gov.uk/...
@fosspatents Florian Mueller on x
At first sight I would say the glass is half-full, but it's a test for many people's patience. I will study the documents published by the CMA and Microsoft&Activision's announcement now, and will then do a Twitter (X) Space to explain what I think it all means.
@kprescott Katie Prescott on x
Back to the drawing board for Microsoft and Activision in the latest dramatic twist, as the competition watchdog pushes their deal submission back to square one. The US company will submit a “new” deal and the CMA will look at it afresh in a “new” phase 1 investigation
@lulumeservey Lulu Cheng Meservey on x
The next step in the UK for Activision Blizzard's deal with Microsoft: Our CEO just sent this email to all employees... [image]
@bradsmi Brad Smith on x
Today we submitted a restructured proposal to the CMA for approval of our Activision Blizzard acquisition under UK law. This new proposal also honors our prior commercial and regulatory commitments. Read more here: https://blogs.microsoft.com/ ...
@swiftonsecurity @swiftonsecurity on x
@tomwarren I'm so sick of this fucking story. Microsoft needs to either cancel the Activision purchase or just ban every British person from Xbox and unify Ireland.
@lewis_crofts Lewis Crofts on x
Microsoft-Activision deal has been reshaped in the UK with a side-deal with Ubisoft. New deal is notified to the @CMAgovUK. The new transaction ensures that Msft can continue to honour the commitments it gave to @CMAgovUK Blog by @BradSmi here https://blogs.microsoft.com/ ...
@jamesrbuk James Ball on x
Am a little baffled that the CMA has come to a totally different conclusion from its EU and US counterparts and is just stubbornly insisting its position is the right one. Microsoft entitled to be quite frustrated imo.
r/xboxone r on reddit
Microsoft to sell off Activision cloud gaming rights to Ubisoft in bid for UK approval
r/Games r on reddit
Microsoft and Activision Blizzard Restructure Proposed Acquisition and Notify Restructured Transaction to the UK's Competition and Markets Authority
r/XboxSeriesX r on reddit
Microsoft to sell off Activision cloud gaming rights to Ubisoft in bid for UK approval

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