Unveiling Microsoft's Game-Changing Acquisition: What the Activision Blizzard Deal Means for the Future

Highlights

In response to the UK regulator's concerns regarding Microsoft's acquisition of Activision Blizzard, the company has taken appropriate measures to alleviate any potential unfair advantage it may have in the video game cloud streaming industry.

Microsoft has transferred the cloud streaming rights for Activision Blizzard games to Ubisoft Entertainment for a period of 15 years. If it is approved, gamers will be able to access Activision Blizzard games through the Ubisoft+ subscription service using cloud streaming. Additionally, Ubisoft plans to license these games to other cloud streaming and subscription services.

Microsoft has disclosed its latest strategies to secure approval from the UK's Competition and Markets Authority (CMA) for the pending acquisition of Activision Blizzard. The CMA has raised concerns regarding the deal since it was initially announced in January 2022. In April 2023, the CMA officially moved to block the acquisition, but soon after, the European Commission of the EU granted approval.

The primary focus of the UK regulator has been the potential unfair advantage Microsoft could gain in the video game cloud streaming sector. Despite the obstacle faced in the UK, both Microsoft and the CMA have expressed their willingness to reach an agreement. Gamers worldwide eagerly anticipate Microsoft's new proposal that could satisfy the UK marketing authority. The revised agreement between Microsoft and Activision Blizzard has proven to be unexpected and intriguing.

Microsoft president Brad Smith made a surprising announcement, stating that a new merger application has been submitted in the UK, which will result in Microsoft divesting its cloud streaming rights of ABK games. Instead, Ubisoft Entertainment will acquire the rights to stream "all current and new Activision Blizzard PC and console games released over the next 15 years," with these rights being transferred indefinitely. Ubisoft, previously expressing support for Microsoft's acquisition of Activision Blizzard, expressed its enthusiasm for this development.

As per the terms of the agreement, Activision Blizzard games will now be included in the Ubisoft+ subscription service through cloud streaming. This decision appears logical, considering that Ubisoft+ is already available on Xbox consoles through a separate monthly fee from Game Pass, and also offers cloud gaming through Amazon Luna. The role of Luna in this new deal remains unclear. However, Ubisoft has stated its intentions to license the Activision Blizzard library of games to other cloud streaming and subscription services.

Microsoft is currently facing the final obstacles of obtaining approval from the CMA and United States FTC in order to successfully acquire Activision Blizzard. Despite the rejection of the deal by the CMA and the intense trial with the FTC in June, other countries have given their approval to the pending agreement.

It is expected that the CMA will review and announce their decision regarding the new acquisition terms before October 18. Initially, Microsoft had a deadline of July 18 for their agreement with ABK, after which they would be required to pay a $3 billion termination fee to Activision Blizzard. However, due to the FTC trial, this deadline was extended by 90 days to October 18, as it became apparent that the crucial approvals from the CMA and FTC would not be obtained in time.

Source: Microsoft