In an astonishing twist, Microsoft’s colossal attempt to acquire Activision Blizzard for a staggering $69 billion has just taken an unexpected and intriguing turn. The tech giant has just unveiled an innovative solution to appease UK regulators who’ve been reluctant to greenlight the deal. In a surprising move, Microsoft is relinquishing the streaming rights for iconic games like Call of Duty and Overwatch to none other than Ubisoft, a rival gaming publisher. This tactical maneuver aims to finally win over those cautious UK regulators.
Brad Smith, the President of Microsoft, shared the breaking news in a blog post on August 22nd. He explained that this revised plan is a response to concerns raised by the UK’s Competition and Markets Authority about the impact of the merger on cloud game streaming. The essence of the plan is to narrow down Microsoft’s acquisition to a more focused set of rights. Specifically, all current and future Activision Blizzard PC and console games over the next 15 years will now have their cloud streaming rights transferred to Ubisoft Entertainment SA – a major player in the global gaming arena. What’s even more intriguing is that these rights will stay with Ubisoft perpetually.
Ubisoft itself confirmed this major development in its own blog post. This essentially means that blockbuster titles like Modern Warfare II will soon find a home within Ubisoft’s popular subscription service called Ubisoft+ Multi-Access. And that’s not all – they’re also set to become part of Ubisoft’s Classics add-on for PlayStation users. But hold on, the twist continues: these games will still be up for grabs on Microsoft’s Game Pass subscription, but they won’t be tied down to any single cloud gaming platform. In other words, they’ll enjoy a kind of multi-platform freedom.
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Now, let’s dive into the nitty-gritty of this complex divestiture strategy. The UK’s Competition and Markets Authority has shared that Ubisoft will compensate Microsoft via a “one-off payment,” coupled with a unique “wholesale pricing mechanism.” This intricate approach allows Ubisoft to make payments based on how much the games are used. It’s an arrangement that opens the door for Ubisoft to license these games to various subscription services. And that’s not all – they can even make Microsoft port Activision Games to competing PC gaming systems like Linux, by paying an additional fee.
Initially projected to close by mid-July, Microsoft’s mega-deal faced a myriad of obstacles both in the US and UK. While it was granted the nod from the European Union, the Federal Trade Commission (FTC) threw a curveball by suing to halt the deal. However, the tide shifted in Microsoft’s favor as the judge dismissed the lawsuit and sided with the tech giant. Meanwhile, in the UK, the Competition and Markets Authority blocked the merger back in April. They were concerned that the deal might pave the way for Microsoft to make games like Call of Duty exclusively available on Game Pass, giving them an upper hand in the cloud gaming market.
Following the FTC lawsuit hiccup, Microsoft and the CMA got back to the negotiating table to brainstorm possible solutions. This has led to the intricate and fascinating deal that we’re discussing today. As part of this, Microsoft and Sony have also come to an agreement that secures Call of Duty games on PlayStation consoles for the next decade.
But here’s the thing: this roller-coaster ride isn’t over just yet. Although the CMA’s chief executive, Sarah Cardell, emphasized that this isn’t a green light, she assured that they’re going to meticulously assess every aspect of this new deal. Their primary goal remains to ensure that healthy competition in the thriving cloud gaming market persists, driving innovation and offering gamers plenty of choices.
So, there you have it – a merger saga that keeps us on the edge of our seats, packed with surprising twists and turns that even the best storytellers wouldn’t dare to dream up.