The technology major's new move comes after the British competition watchdog confirmed its decision to block the original $68.7bn acquisition of the US-based video game holding company on grounds of protecting innovation and choice in cloud gaming
Microsoft to offload cloud streaming rights of Activision PC and console games, outside of the EEA, to Ubisoft Entertainment. (Credit: Coolcaesar/Wikimedia Commons)
Microsoft has submitted a restructured deal for the acquisition of Activision Blizzard to the UK Competition and Markets Authority (CMA) for review after excluding the latter’s cloud streaming rights outside of the European Economic Area (EEA).
The technology major’s new move comes after the British competition watchdog confirmed its decision to block the original $68.7bn acquisition of the US-based video game holding company. The regulator blocked the deal on grounds of protecting innovation and options in cloud gaming.
According to the terms of the restructured deal, Microsoft will not be acquiring cloud rights for the existing PC and console games of Activision, or for new games released by the latter during the next 15 years. Instead, the rights will be sold to Ubisoft Entertainment.
The cloud streaming rights to the games will be divested prior to Microsoft’s acquisition of Activision.
Microsoft said the newly structured deal is aimed at addressing the concerns set out in the UK regulator’s final report published in April 2023.
The deal will also enable Ubisoft to supply Activision’s gaming content to all cloud gaming service providers, including Microsoft.
Besides, Ubisoft will have the opportunity to license out Activision’s content using various business models, including subscription services.
The UK CMA will carry out a new investigation on the restructured deal in accordance with its usual Phase 1 processes.
CMA Chief Executive Sarah Cardell said: ”The CMA has today confirmed that Microsoft’s acquisition of Activision, as originally proposed, cannot proceed.
”Separately, Microsoft has notified a new and restructured deal, which is substantially different from what was put on the table previously. As part of this new deal, Activision’s cloud streaming rights outside of the EEA will be sold to a rival, Ubisoft, who will be able to license out Activision’s content to any cloud gaming provider.
”This will allow gamers to access Activision’s games in different ways, including through cloud-based multigame subscription services.”
For helping with the assessment, the CMA is seeking comments on the newly structured deal from any interested party. The last date for filing the comments is 1 September 2023.
The competition watchdog has set itself a deadline of 18 October 2023 to declare the Phase 1 decision.
In May 2023, the European Commission gave conditional approval to the deal. This was after Microsoft proposed to offer a 10-year free license to users in the EEA and a corresponding free license to cloud game streaming service providers for a period of 10 years.