Ubisoft Lands Streaming Rights To Activision Blizzard Games As Microsoft Tries To Woo UK Regulators

Microsoft is inching closer to finalizing its longstanding bid to acquire Activision Blizzard. The $69 billion proposal has already received a green light from regulators across the globe, and recently moved past regulatory concerns in the U.S. following a contentious lawsuit filed by the Federal Trade Commission. 

While the deal still stands unapproved in the U.K., Microsoft is pulling all strings possible to convince regulators in the region. Its latest endeavor is to convince the U.K. Competition and Markets Authority (CMA) by announcing its plans to lease Activision's cloud gaming rights to another gaming studio — Ubisoft.

Microsoft has announced a restructuring of the proposed acquisition, claiming this results in a "narrower set of rights." This restructuring, Microsoft's president and vice chairman Brad Smith writes on the Microsoft blog, will prevent it from releasing Activision Blizzard-made titles exclusively on the Xbox Cloud Gaming platform. 

Granted approval, the reshuffling will confer Ubisoft with exclusive rights to license existing games by Activision — and those released over the next 15 years — to other cloud gaming service providers, which will be liable to pay Ubisoft instead of Microsoft.

Ubisoft has also announced that Activision's games will be available alongside its own titles via Ubisoft+ subscription across platforms including PC, Xbox, PlayStation, and Amazon Luna. Ubisoft CEO Yves Guillemot recently supported the Microsoft-Activision deal in an investor briefing, lauding it as a "fantastic opportunity" for Activision and the mobile gaming industry.

This modified deal remedies the biggest concern for the U.K. CMA, which spoke of Microsoft's anticipated monopoly over the cloud gaming market if the deal was approved. It also appears to align with Smith's assurance to address CMA's concerns after the two parties agreed to negotiate outside of court. Earlier in July, the executive tweeted about tweaking the deal to gain the U.K. regulator's approval, while also disagreeing with the previous opposition.

Our statement on the mutual request with the CMA for a pause of our appeal in the UK: pic.twitter.com/8Aky2IJjxS

— Brad Smith (@BradSmi) July 11, 2023

However, instead of an instant nod, the CMA has initiated another investigation while announcing its original decision to prohibit the Microsoft-Activision deal stays, and is expected to release its findings by October 18, 2023. This extends CMA's previous deadline of August 29, when it was expected to release its conclusions after reviewing Microsoft's appeal against the initial blocking of the deal. 

The CMA CEO Sarah Cardell maintains the re-organization does not warrant approval. Instead, the regulator will decide to ensure "open and effective competition driving innovation and choice" in the cloud gaming industry.

While the deal had already received a green signal in the European Union, the latest changes have compelled the European Commission to re-assess its decision, according to The Verge. As part of its earlier approval, the EU had mandated Microsoft to license Activision's titles to every cloud-based gaming service in the region — that, too, free of cost. Meanwhile, Smith had assured the condition applies to consumers worldwide — and not limited to the EU. It is, however, highly likely that the free license is limited to the EU, while service providers are asked to pay in other regions. 

Meanwhile, Microsoft has long been abating concerns about a monopoly over popular titles and franchises, especially "Call of Duty," while conceding defeat to competitors Sony and Nintendo in the "console wars" and releasing its user statistics for the first time in almost a decade. In July 2023, head of Xbox Phil Spencer also confirmed the company had signed a binding agreement to keep "Call of Duty" available on PlayStation.