Microsoft to sell off Activision Blizzard’s cloud gaming rights to Ubisoft

SAN FRANCISCO: Microsoft on Tuesday submitted a restructured proposal to UK’s anti-trust watchdog for approval of its $68.7 billion acquisition of gaming giant Activision Blizzard.

As part of the restructuring, Microsoft will transfer cloud gaming rights for current and new Activision Blizzard games to French video game publisher Ubisoft.

"To address the concerns about the impact of the proposed acquisition on cloud game streaming raised by the UK Competition and Markets Authority (CMA), we are restructuring the transaction to acquire a narrower set of rights,” said Brad Smith, Microsoft Vice Chair and President.

This includes executing an agreement effective at the closing of its 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.

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 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,” Smith added.

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, said Smith, 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,” he informed.

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

Microsoft has also entered into binding legal commitments to bring Call of Duty video game to rival consoles and Activision Blizzard games to rival cloud streaming platforms.