Microsoft Corp this week said it will sell cloud gaming rights for Activision Blizzard Inc. content to Ubisoft Entertainment SA in order to address acquisition concerns by the UK-based Competition and Markets Authority.
Under the terms, Microsoft will sell cloud streaming rights for current and new Activision Blizzard console and PC titles released over the next 15 years to Ubisoft. In addition, Microsoft cannot release Activision Blizzard titles exclusively to Xbox Cloud Gaming or control licensing terms to rival services.
Ubisoft will compensate Microsoft through a one-time payment and market-based wholesale pricing, including based on usage.
The agreement represents a restructured transaction that will be reviewed and potentially completed by an extended date of Oct. 18, when the acquisition agreement expires.
The acquisition was previously scheduled to close July 18.
In July, Microsoft, Activision, in addition to the CMA, agreed to pause Microsoft’s appeal against the CMA in order to resolve outstanding issues related to its acquisition of Activision Blizzard.
The Competition Appeal Tribunal granted a two-month stay to all parties to allow more time for a restructured deal.
In Apr., the CMA blocked Microsoft from acquiring Activision Blizzard.
It cited harm to competition from the merger due to Microsoft’s dominant market position in the cloud gaming market, incentive to increase the cost of Xbox Game Pass, reduced innovation and less choice for UK gamers.
In July, a U.S. federal judge denied the Federal Trade Commission a motion for preliminary injunction to block the acquisition. The Ninth Circuit Court of Appeals in San Francisco subsequently denied an appeal by the FTC to prevent the acquisition from closing.
The ruling found that the FTC failed to show that Microsoft would likely pull Call of Duty from the PlayStation or that an ownership of Activision content with substantially lessen competition in the video game library subscription and cloud gaming markets.
The FTC had alleged harm to competitors and subscription services by allowing Microsoft to deny titles to rival hardware, manipulate Activision’s pricing, or change terms and timing to access to Activision’s content.
It citied Microsoft’s acquisition of ZeniMax in Mar. 2021 which allowed the company to secure exclusive release of new game Ips including Starfield and Redfall for Xbox.
The acquisition, which Microsoft expects to close in fiscal year 2023, would allow competitors access to the popular first-person shooter franchise. Microsoft has not yet hammered an agreement to release the franchise to Sony Corp.’s PlayStation consoles.
Microsoft in Jan. said it would acquire Activision Blizzard Inc. for $68.7 billion in an all-cash transaction.
The acquisition would propel Microsoft’s game business in console, PC, cloud, and mobile with franchises including Call of Duty, Warcraft, Diablo, Overwatch, and Candy Crush.
In addition, Microsoft plans to release Activision Blizzard titles to Xbox Game Pass, a monthly service that holds more than 25 million subscribers.