Microsoft seeks UK approval when selling game rights

Microsoft seeks UK approval when selling game rights

In recent months, the entire industry has closely followed the acquisition of Activision Blizzard by Microsoft and, as it is no secret, several markets have already approved the purchase, however, others are against it.

One of these markets is the UK CMA itself, which is trying at all costs to undermine this purchase. Now, new information is out and Microsoft is seeking approval in the UK to sell Activision's cloud gaming rights to Ubisoft.

Since April of this year, Microsoft has been trying to get the CMA to reconsider its decision original in April, which was blocking the takeover. But today the CMA stated the following: “Microsoft's allegations did not provide any basis for an amendment of the original ban decision. We are imposing a Final Order that prohibits the original agreement on a worldwide basis.”

“Today, we are taking another important step in relation to this transaction. To address 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 more limited set of rights.”
“This includes execution an agreement effective at the close of our merger that transfers cloud streaming rights to all current and future Activision Blizzard PC and console games released over the next 15 years to Ubisoft Entertainment, a leading global game publisher. The rights will be perpetual.”

“As a result of the agreement with Ubisoft, Microsoft believes that its proposed acquisition of Activision Blizzard represents a substantially different transaction under UK law compared to the transaction it Microsoft has submitted for CMA consideration in 2022.”

“As such, Microsoft today notified the CMA of the restructured transaction and expects the CMA review processes can be completed prior to the 90-day deadline. extension on its acquisition agreement with Activision Blizzard expires on October 18.”

“Under the restructured transaction, Microsoft will not be in a position to release Activision Blizzard games exclusively on its own streaming service in cloud – Xbox Cloud Gaming – nor to exclusively control the terms of licensing Activision Blizzard games to competing services.”

In a statement released today, the CMA reiterated that it was blocking the original proposal and would now consider the new proposal.

“The CMA today confirmed that Microsoft's acquisition of Activision, as originally proposed, cannot proceed,” said Sarah Cardell, CEO of CMA.
“Separately, Microsoft has served notice of a new, restructured agreement, which is substantially different from what was previously presented. As part of this new deal, Activision's non-EEA cloud streaming rights will be sold to a competitor, Ubisoft, which will be able to license Activision's content to any cloud gaming provider.”

“ This will allow players to access Activision games in different ways, including through cloud-based multigame subscription services. We will now review that settlement through a new Phase 1 investigation.”

“This is not a green light. We will carefully and objectively review the details of the restructured agreement and its impact on competition, including third party comments.”

“Our objective has not changed – any future decision on this new agreement will ensure that the growing gaming market in cloud continues to benefit from open and effective competition, driving innovation and choice.”

As we can see from the CMA’s response, this move by Microsoft to sell the rights to Ubisoft went well received, but they make it very clear that they will continue to review it.