Microsoft’s Altered Activision Deal Under Regulatory Scrutiny

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Today, Microsoft announced a significant restructuring of the deal to acquire Activision Blizzard, which includes the transfer of streaming rights for both existing and future Activision games to Ubisoft. This drastic change, part of Microsoft’s $68.7 billion deal, aims to appease British regulatory bodies that had previously hindered the acquisition. Meanwhile, the European Commission has indicated that it is “carefully assessing” whether this restructuring warrants a new investigation.

Image Source: Activision Blizzard

This statement hints at a potential review of the approval granted for the deal by the European regulatory authorities. This approval had been given after Microsoft assured legal protections for EU consumers, offering them free licenses for streaming all current and future Activision Blizzard games through “any cloud gaming service of their choice.” This offer extended to both PC and console games for which the consumers possessed licenses. Cloud service providers were also promised free licenses for streaming these games within the EU market.

At the time of approval, Microsoft had also pledged that these licenses would “apply globally automatically, including to competing cloud gaming services.” While Microsoft maintains that the restructured deal will not alter its commitments to the European Commission, Ubisoft will now control the licensing outside the EU. Consequently, a cloud gaming service could commence operations in the EU with a free license, but it would need to secure a Ubisoft license to operate in regions like the United States.

Initially, Microsoft had planned to freely apply these licenses worldwide. However, the rights for cloud gaming of Activision Blizzard titles outside the EU are now transferred to Ubisoft. If Microsoft concludes the proposed acquisition, it will also need to seek licenses from Ubisoft for Activision Blizzard games on its Xbox Cloud Gaming service outside the EU. Microsoft won’t be able to exclusively launch Activision Blizzard games on Xbox Cloud Gaming and won’t retain exclusive control over the licensing terms for these games on competing platforms.

UK regulatory bodies are already treating this as a new deal, with the Competition and Markets Authority (CMA) initiating a new “Phase 1” investigation into this restructured deal. Microsoft now awaits the response from the European Commission and might potentially face a new investigation.

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Vasyl Kolomiiets
Vasyl Kolomiiets
I'm Vasyl Kolomiiets, a seasoned tech journalist regularly contributing to global publications. Having a profound background in information technologies, I seamlessly blended my technical expertise with my passion for writing, venturing into technology journalism. I've covered a wide range of topics including cutting-edge developments and their impacts on society, contributing to leading tech platforms.

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