Microsoft’s acquisition of Activision has hit a snag in the United Kingdom. In a bid to secure the merger in that country, it has offered to sell its cloud gaming portion to Ubisoft, another major game company.
Microsoft’s ownership of Xbox already makes it a major player in the gaming world. Cloud Gaming is still a new industry that hasn’t fully developed yet. The Verge reports:
Microsoft is restructuring its proposed Activision Blizzard deal to transfer cloud gaming rights for current and new Activision Blizzard games to Ubisoft. The transfer of rights is designed to appease regulators in the UK that are concerned about the impact Microsoft’s proposed $68.7 billion deal will have on cloud gaming competition. The restructured deal has triggered a new regulatory investigation in the UK that could last until 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.”
Microsoft had already agreed for Sony’s Playstation and other gaming hardware to carry Activision’s games. Call of Duty, Activision’s flagship product, is continuously in the top 3 franchise in the world. Kotaku has more:
Ubisoft confirmed in its own blog post that this means Activision Blizzard games like Modern Warfare II will soon be added to its own Ubisoft+ Multi Access subscription service, as well as its Ubisoft+ Classics add-on for PlayStation users. While the games can still be licensed for Microsoft’s own Game Pass subscription service, they would not be able to become exclusive to any one cloud gaming platform. Ubisoft+, which includes big blockbusters like Assassin’s Creed, Far Cry, and Rainbow Six Siege, already costs more than Game Pass on console, and it will be interesting to see how this new side-deal transforms the service.
How exactly will this messy divestiture work? According to the Competition and Markets Authority in the UK, Ubisoft will compensate Microsoft through a “one-off payment” as well as a “wholesale pricing mechanism” that includes the option to pay based on usage. Ubisoft will then have the ability to license out the games to other subscription services, as well as to pay a fee to force Microsoft to port Activision Games to competing PC gaming operating systems like Linux.
Microsoft has already escaped anti-trust measures in the United States. If this change goes through, Microsoft will solidify its global lead as a gaming and tech giant.
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