Wonder what the FTC will do?
In a bid to obtain approval of the merger in the UK, Microsoft has announced plans to sell the cloud gaming rights to Activision Blizzard games to Ubisoft. This deal would cover all current and future games released under Activision Blizzard brand for the next 15 years. Coincidentally, this move triggered a regulatory investigation by the UK’s group, which could extend to October 18th of this year.
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. 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 President Brad Smith
The long and the short of it is, if the deal does go through, Microsoft won’t be able to stream Activision Blizzard games exclusively through Xbox Cloud Gaming. More importantly, they won’t be in control of licensing agreements for other streaming services; that will be Ubisoft’s purview. This will actually create a loop where Ubisoft will have to license Activision Blizzard games back to Microsoft for use on their streaming platform. And this deal doesn’t just cover the UK; it’s everywhere Microsoft operates the Xbox brand.
Ubisoft will compensate Microsoft for the cloud streaming rights to Activision Blizzard’s games through a one-off payment and through a market-based wholesale pricing mechanism, including an option that supports pricing based on usage. It will also give Ubisoft the opportunity to offer Activision Blizzard’s games to cloud gaming services running non-Windows operating systems.
Microsoft President Brad Smith
In addition, Ubisoft will, as noted above, add Activision Blizzard games to their multi-platform game streaming service, Ubisoft+.
As noted above, This has triggered an investigation from the UK’s Competition and Markets Authority (Competition and Markets Authority), which can extend to October 18th. The 18th just so happens to be the date that Microsoft extended the closing of the deal with Activision Blizzard. In turn, the CMA has also imposed a final order on the deal, prohibiting it worldwide until the conclusion of the investigation. as the CMA states:
Ubisoft will also be able, for a fee, to require Microsoft to adapt Activision’s titles to operating systems other than Windows, such as Linux, if it decides to use or license out the cloud streaming rights to Activision’s titles to a cloud gaming service that runs a non-Windows operating system.
This new deal also won’t affect Microsoft’s previous obligations made to the EU commission. They made several deals to make the whole thing chooch in the EU.
Of importance, Microsoft’s obligations to provide cloud streaming rights in the European Economic Area remain in place, in full compliance with Microsoft’s commitments to the European Commission. The agreement with Ubisoft has been structured so that Microsoft will still acquire the rights needed to honor fully its legal obligations under its commitments to the European Commission, as well as its existing contractual obligations to other cloud game streaming providers, including Nvidia, Boosteroid, Ubitus, and Nware. Microsoft is engaging closely with the European Commission to support the EC’s assessment of the agreement and confirmation that the commitments remain undisturbed.
Microsoft President Brad Smith
The CMA, however, will be going over everything with a fine-toothed comb.
This is not a green light. We will carefully and objectively assess the details of the restructured deal and its impact on competition, including in light of third-party comments,” says Sarah Cardell, chief executive of the CMA. “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.
Sarah Cardell, CMA chief executive
As for Microsoft, they’re probably relatively happy with this. If they have to cast off some fool’s gold and pay a comparatively minor fee to get it back later to secure their shining jewel, they’re probably more than okay with it.
Source: The Verge
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