Activision Blizzard to sell streaming rights as CMA rejects original merger

Activision Blizzard King has submitted a new proposal to the UK’s Competitions and Market Authority (CMA) following the instituition’s final rejection of the intital acquisition. In this newfound proposal, cloud streaming rights for “all current and future” Activision Blizzard games would be transfered to Ubisoft for the next 15 years.

Without this follow-up proposal, the CMA’s rejection would leave the deal dead in the water worldwide. Now that an alternative has been provided, the CMA must reconsider this newfound arrangement would put its worries regarding cloud gaming and its impact on UK consumers at ease. Activision Blizzard and Microsoft has until October to get the CMA’s approval, otherwise the acquisition will be toast.

The CMA put out the following press release early this morning: “Under the restructured deal, 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 (this excludes the European Economic Area). Instead, these rights will be divested to Ubisoft Entertainment SA (Ubisoft) prior to Microsoft’s acquisition of Activision.”

It continues, featuring a written statement from CMA chief executive Sarah Cardell: “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. 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.”

A blog post was also published on the Microsoft website, written by vice chair and president Brad Smith, confirming this follow-up proposal and standing firm on the company’s intent to get this deal approved. It states the following:

“As a result of the agreement with Ubisoft, Microsoft believes its proposed acquisition of Activision Blizzard presents a substantially different transaction under UK law than the transaction Microsoft submitted for the CMA’s consideration in 2022. As such, Microsoft today has notified the restructured transaction to the CMA and anticipates that the CMA review processes can be completed before the 90-day extension in its acquisition agreement with Activision Blizzard expires on October 18.”

“Under the restructured transaction, Microsoft will not be in a position either to release Activision Blizzard games exclusively on its own cloud streaming service—Xbox Cloud Gaming – or to exclusively control the licensing terms of Activision Blizzard games for rival services.”

To conclude, the post reiterates the company’s belief that this deal is for the good of players and developers worldwide: “We believe that this development is positive for players, the progression of the cloud game streaming market, and for the growth of our industry. And as we continue to navigate the review process with the CMA, we remain as committed as ever to bringing the incredible benefits of the acquisition to players, developers, and the industry. Today’s development brings us one step closer to bringing the joy of gaming to players everywhere.”