Investigation into Microsoft’s Activision Blizzard Acquisition Bid

The Competition and Markets Authority (CMA) has launched an investigation into Microsoft’s new bid to acquire Activision Blizzard. This move aims to carefully assess the implications of the agreement for the UK market.

New Agreement Structure

The main aspect of this merger is the granting of game streaming rights for Activision games to Ubisoft, under the supervision of the UK antitrust authority. This decision comes after the previous agreement was blocked due to concerns regarding the cloud gaming market.

The Review Process

The CMA will conduct the review process until October 18, 2023, which is the expiration date of the new agreement between Microsoft and Activision Blizzard. The official statement released by the UK market watchdog can be found below:

“To ensure the final legal effect of this decision, the CMA has issued a Final Order that prohibits the original settlement globally. According to the new deal, Microsoft will not acquire cloud rights for existing Activision games on PC and consoles, as well as new games released by Activision in the next 15 years (excluding the European Economic Area). These rights will instead be transferred to Ubisoft Entertainment SA (Ubisoft) before Microsoft acquires Activision.”

“Microsoft states that this restructured deal aims to address concerns raised in the CMA’s final report in April. The goal is to provide independent third-party content provider, Ubisoft, with the ability to deliver Activision content to all cloud gaming service providers, including Microsoft itself.”

“Ubisoft will have the license to utilize Activision’s content through various business models, including subscription services. The agreement also enables Ubisoft to require Microsoft to develop game versions for non-Windows operating systems. Our evaluation of the restructured transaction and its impact on competition remains thorough and objective, taking into account inputs from third parties. Our primary objective remains unchanged: to ensure that the growing cloud gaming market benefits from fair competition and promotes innovation and choice.”

“Ubisoft will compensate Microsoft for the cloud streaming rights to Activision’s content through a one-time payment and market-based wholesale pricing mechanism. This agreement allows Ubisoft to sell those rights to any other cloud gaming service provider, including Microsoft.”

“Ubisoft will have the authority to license third-party cloud streaming rights for Activision games using any business model, including a purchase model, multi-game subscription services, or any other emerging models. For an additional fee, Ubisoft can also require Microsoft to make Activision games compatible with non-Windows operating systems like Linux, if it chooses to use or license Activision’s cloud game streaming rights for non-Windows cloud gaming.”