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Activision Sells Streaming Rights to Ubisoft to Push Through Microsoft Takeover

Updated: Dec 30, 2023

[Edited] In a bid to secure approval for its $69 billion sale to Microsoft, Activision Blizzard has announced that it will sell its streaming rights to Ubisoft Entertainment.

Credits: REUTERS

The move comes after Britain's anti-trust regulator blocked the acquisition, citing concerns about Microsoft gaining too much control of the cloud gaming market.

Shares of Activision rose by 1.1%, while Microsoft saw a 0.7% increase before noon in New York. Ubisoft shares listed in Paris closed 8.8% higher, making it the biggest gainer on the pan-European STOXX 600 index.

Microsoft's proposed acquisition of Activision was initially blocked by the Competition and Markets Authority (CMA) in the UK. After months of negotiations, the CMA maintained its decision to veto the deal, prompting Microsoft to come up with new terms.

Under the restructured deal, Microsoft will not have exclusive rights to release Activision games on its own cloud streaming service, Xbox Cloud Gaming, or control the licensing terms for rival services. Instead, Ubisoft will acquire the cloud streaming rights for Activision's existing PC and console games, as well as any new games released by Activision in the next 15 years.

The deal will apply globally, except in Europe where the original deal was already accepted. In Europe, Ubisoft will have a non-exclusive license for Activision's rights to offer the games in the region.

To use Activision's games on its Xbox cloud platform outside the European Economic Area, Microsoft will need to license the rights from Ubisoft, according to the CMA.

The European Union's antitrust regulators are also examining Microsoft's proposal to gain approval in the UK and its potential impact on its concessions to the European Commission.

Tom Smith, a partner at law firm Geradin Partners and former legal director at the CMA, expressed optimism that the deal would go through. He stated, "The process has been torturous, and there's still possibly scope for the wheels to come off, but we shouldn't expect Big Tech deals to sail through nowadays."

Microsoft expects its new proposal to be reviewed by the CMA by October 18. The CMA will examine the new deal under its usual system, with a Phase 1 process ending on that date. If concerns about competition remain, the CMA could initiate a longer Phase 2 examination.

The deadline for the deal has already been extended by three months to October 18 due to the lengthy regulatory process. Competition partner Alex Haffner from UK law firm Fladgate believes that Microsoft would not have taken this new step if it did not believe it could get the new deal past the British regulator.

CMA Chief Executive Sarah Cardell stated that the regulator would closely examine the new deal and seek the thoughts of third parties. The CMA's goal remains to ensure that the growing cloud gaming market continues to benefit from open and effective competition.

The CMA's stance on the deal showcases its tough approach to tech deals since becoming a standalone regulator after Britain's departure from the European Union. However, the back-and-forth over the deal and the divergence with Brussels have introduced significant uncertainty to the regulatory landscape.

While the Federal Trade Commission in the United States also opposed the deal, it failed to block it. The European Union, on the other hand, accepted the deal after Microsoft committed to licensing Activision's games to other platforms.

Microsoft stated that Ubisoft would acquire the rights through a one-off payment and a market-based wholesale pricing mechanism, including an option for pricing based on usage. Ubisoft's shares listed in Paris saw a nearly 10% increase following the announcement.


Activision Blizzard will sell its streaming rights to Ubisoft Entertainment in a bid to secure approval for its sale to Microsoft.

Microsoft's proposed acquisition of Activision was blocked by the UK's Competition and Markets Authority.

Under the restructured deal, Ubisoft will acquire the cloud streaming rights for Activision's games.


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