The acquisition of Activision Blizzard by Microsoft is becoming more complex with the arrival of a new player in the equation: Ubisoft. The French publisher buys the rights for cloud gaming on Activision and Blizzard games, if the buyout goes through.
Did you think the acquisition of Activision Blizzard was about to close? This is a new turnaround. Since January 2022, Microsoft has been seeking to buy Activision Blizzard for $68.7 billion. The firm had to face the competition authorities in many countries, but ended up convincing everywhere, except in the United Kingdom. On July 19, 2023, the two companies postponed their commitment to allow themselves until October to convince the United Kingdom to validate this takeover.
Today August 22, 2023, Microsoft officially presents its new proposed takeover to the CMA in the United Kingdom, the competition authority. In particular, it plans to resell part of the rights to the games to Ubisoft, a new player in the equation.
The question of cloud gaming
Remember that the only risk considered by the CMA if it were to validate this takeover was the question of cloud gaming. For the competition authority, leaving Activision Blizzard in the hands of Microsoft was leaving the risk of seeing Xbox Cloud Gaming take too large a share of this nascent market which could explode in the years to come. In addition, this assumption also reinforced other segments of Microsoft, such as the sale of Windows licenses which are used to run games on cloud gaming servers.
To respond to all these remarks and have its takeover validated before October 18, 2023, the new end date for the takeover contract, Microsoft has unveiled rather significant counterparties.
Ubisoft buys streaming rights
The Redmond company announces that if the takeover is validated, the video game streaming rights will be sold to Ubisoft, the French publisher of Yves Guillemot. In this new scenario, Ubisoft is buying in perpetuity the cloud gaming rights for PC and console games from Activision Blizzard available now or to be released over the next 15 years. The publisher can then use this right to offer the game on the cloud gaming services of its choice.
This means that Microsoft will not be able to decide to release its Activision Blizzard games exclusively on Xbox Cloud Gaming, and that Ubisoft will be able to market these games on cloud gaming platforms where the servers do not run Windows.
The payment of the rights by Ubisoft will be made with a one-off payment, allowing the French publisher to have free hand on the economic model to be used to make these rights bear fruit. Finally, it is a redemption of rights on a global scale, but the agreement signed between Ubisoft and Microsoft plans to respect the commitments of the Redmond firm vis-à-vis the European Union. Activision Blizzard games will therefore be offered at Nvidia, Boosteroid, Ubitus, Nware or other services respecting the conditions of the agreement with the European Commission.
UK launches investigation
In response to this announcement, the CMA confirmed that it was launching a new investigation to determine whether this new scenario eliminates all risks for competition and therefore for the future of the market vis-à-vis the consumer. The competition authority also confirms that the first version of the takeover of Activision Blizzard by Microsoft, even including the constraints vis-à-vis the EU and the contract signed with Sony, was now prohibited by the CMA, and this on an international scale.
The new investigation begins with a decision expected no later than October 18, 2023, at the same time as the expiration of the contract.
To follow us, we invite you to download our Android and iOS application. You can read our articles, files, and watch our latest YouTube videos.