The new deal divests cloud rights for existing Activision PC and console games to rival Ubisoft instead of Microsoft; the U.K. regulator has until October 18 to decide.
After winning the European Commission’s approval and triumphing over the FTC, Microsoft’s deal to acquire Activision Blizzard hit a snag when it was blocked by the U.K.’s Competition and Markets Authority (CMA).
Regarding the CMA, Microsoft vice chair and president Brad Smith previously stated, “While we ultimately disagree with the CMA’s concerns, we are considering how the transaction might be modified in order to address those concerns in a way that is acceptable to the CMA. In order to prioritize work on these proposals, Microsoft and Activision have agreed with the CMA that a stay of the litigation in the U.K. would be in the public interest and the parties have made a joint submission to the Competition Appeal Tribunal to this effect.”
A resolution may soon be reached, however, with a restructured deal that aims to assuage CMA concerns. According to Variety, Microsoft and Activision have agreed that “Microsoft will not acquire cloud rights for existing Activision PC and console games, or for new games released by Activision during the next 15 years (excluding the European Economic Area).” The rights will instead be divested to Ubisoft Entertainment SA.
Sarah Cardell, chief executive of the CMA, said: “The CMA has today confirmed that Microsoft’s acquisition of Activision, as originally proposed, cannot proceed. Separately, Microsoft has notified a new and restructured deal, which is substantially different from what was put on the table previously. As part of this new deal, Activision’s cloud streaming rights outside of the EEA will be sold to a rival, Ubisoft, who will be able to license out Activision’s content to any cloud gaming provider. This will allow gamers to access Activision’s games in different ways, including through cloud-based multigame subscription services. We will now consider this deal under a new phase 1 investigation.”
“This is not a green light,” Cardell continued. “We will carefully and objectively assess the details of the restructured deal and its impact on competition, including in light of third-party comments. Our goal has not changed – any future decision on this new deal will ensure that the growing cloud gaming market continues to benefit from open and effective competition driving innovation and choice.”
The statutory deadline for a CMA decision is October 18.
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