“To address concerns raised by the CMA about the impact of the proposed acquisition on cloud gaming streaming, we are restructuring the transaction to acquire a more limited set of rights,” Microsoft President Brad Smith explained.
What does this new deal mean?
If regulatory authorities approve this new agreement, the executive said, Microsoft will not be able to launch Activision Blizzard video games exclusively on Xbox Cloud Gaming and will not be able to control the licensing terms of the titles on competing services.
On the other hand, Ubisoft will be the company in charge of controlling the broadcast rights of Activision Blizzard games outside the European Union and will license titles to Microsoft to include them in its Cloud Gaming service.
Smith also detailed that “Ubisoft will compensate Microsoft for the cloud streaming rights to Activision games with a one-time payment and through a market-based wholesale pricing mechanism.”
After the announcement, the shares of the French video game studio, Ubisoft, shot up 9%. The company also noted that Activision games will be included in Ubisoft Plus Multi Access, a platform available on PC, Xbox, PlayStation and Amazon Luna.
The CMA definitively blocks the original agreement
Although Microsoft has had to go through different regulatory stages to complete the purchase agreement, one of the most difficult was in the United Kingdom, a territory where the CMA first blocked the deal, due to concerns about exercising dominance in the fledgling Cloud Gaming market.
This Tuesday, Sarah Cardell, executive director of the CMA confirmed that the “deal as originally proposed cannot continue.” In other words, the companies must reach a new agreement and that is why the technology company proposed to sell the rights to the games to Activision.
“This will allow players to access Activision titles in different ways, including through cloud-based multi-game subscription services,” said Cardell, who stressed that this is not an appropriation of the agreement, but also left it clear clear that “this is not a green light”
The relevance of video games in the cloud is becoming more evident and is emerging as the next frontier in the gaming industry, to the point that competitors from other areas, such as Netflix, launched their own platforms to play without the need for A console.