Microsoft to sell off Activision cloud gaming rights to Ubisoft in bid for UK approval

Microsoft is restructuring its proposed Activision Blizzard deal to switch cloud gaming rights for present and new Activision Blizzard video games to Ubisoft. The switch of rights is designed to appease regulators in the UK which are involved concerning the affect Microsoft’s proposed $68.7 billion deal could have on cloud gaming competitors. The restructured deal has triggered a brand new regulatory investigation in the UK that might final till October 18th.

“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,” says Microsoft president Brad Smith. “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.”

This restructured deal implies that if Microsoft does shut its proposed acquisition then it will be unable to launch Activision Blizzard video games completely on Xbox Cloud Gaming. Microsoft gained’t give you the option to completely management the licensing phrases of Activision Blizzard video games on rival providers both. Instead, Ubisoft will management the streaming rights to Activision Blizzard video games exterior of the EU, and license titles again to Microsoft to be included in Xbox Cloud Gaming.

“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,” explains Smith. “It will also give Ubisoft the opportunity to offer Activision Blizzard’s games to cloud gaming services running non-Windows operating systems.”

Ubisoft may even add Activision Blizzard video games to its Ubisoft Plus Multi Access subscription, which is accessible throughout PC, Xbox, Amazon Luna, and on PlayStation through Ubisoft Plus Classics.

The UK’s Competition and Markets Authority (CMA) first blocked Microsoft’s deal in April citing cloud gaming issues, earlier than agreeing to negotiations with the Xbox maker following the Federal Trade Commission’s (FTC) loss in a US federal courtroom final month. Now the CMA has signaled a brand new investigation part thanks to Microsoft’s restructured deal, with a statutory deadline set for October 18th — the identical deadline that Microsoft just lately agreed in its extension of the deal time limit with Activision. A supply acquainted with Microsoft’s plans tells The Verge that the corporate now isn’t anticipating to give you the option to shut its Activision Blizzard deal till early October.

The CMA has now imposed a last order on Microsoft’s authentic deal, prohibiting it worldwide whereas it investigates this new restructuring of the proposed Activision Blizzard acquisition. The CMA notes that “Ubisoft will also be able, for a fee, to require Microsoft to adapt Activision’s titles to operating systems other than Windows, such as Linux, if it decides to use or license out the cloud streaming rights to Activision’s titles to a cloud gaming service that runs a non-Windows operating system.”

The restructured transaction gained’t have an effect on Microsoft’s obligations to the European Commission, although. Microsoft has made a number of cloud gaming offers and EU regulators permitted the Activision Blizzard deal thanks to a free license to customers in EU nations that might enable them to stream through “any cloud game streaming services of their choice” all present and future Activision Blizzard PC and console video games that they’ve a license for.

“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,” says Smith.

The CMA will now assess the reworked deal over the approaching weeks and ship a choice by the October 18th deadline. “This is not a green light. We will carefully and objectively assess the details of the restructured deal and its impact on competition, including in light of third-party comments,” says Sarah Cardell, chief govt of the CMA. “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.”