Microsoft restructures Activision deal, transfers cloud rights to Ubisoft

Microsoft (MSFT) announced that in order to address the concerns about the impact of its proposed Activision Blizzard (ATVI) acquisition on cloud game streaming raised by the UK Competition and Markets Authority, it is restructuring the transaction to “acquire a narrower set of rights.” This includes executing an agreement effective at the closing of the merger that transfers the cloud streaming rights for all current and new Activision Blizzard PC and console games released over the next 15 years to Ubisoft Entertainment (UBSFY). The rights will be in perpetuity. “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,” the company said in a a blog post. 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, the company added.