Microsoft has given Ubisoft exclusive non-European cloud streaming rights for all of Activision Blizzard’s console games over the next 15 years in a bid to appease UK regulators currently reviewing its landmark $69bn deal.
Britain’s Competition and Markets Authority (CMA) is the only regulator that blocked the landmark video game deal, after claiming the deal would hurt competition in the gaming market in April.
Go deeper with GlobalData
According to the CMA, the new proposed deal was a “substantially different transaction” and would “allow Ubisoft to commercialise the rights to other cloud gaming services providers, including Microsoft itself”.
The UK antitrust watchdog has now launched a fresh investigation into the revised Microsoft Activision merger, giving the deal a second chance to go through. However, it is unclear how long this new probe will take.
Microsoft missed the July 18 deadline to close the deal, which was first signed in January 2022, while navigating the issues raised by the CMA. Activision has now given the tech giant until 18 October 2023 to overcome regulatory issues.
Microsoft claims the “restructured transaction” means it will not be in a position 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.”
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataAlex Haffner, competition partner at UK law firm Fladgate, believes that this fresh investigation by the CMA leaves the “merging parties open to the prospect of another lengthy drawn out process”.
“Rather than use Microsoft’s new offer of a divestment of cloud gaming rights to a competitor to clear the original deal, the CMA has instead rubber stamped that original decision and opened a new investigation into the deal in its revised form,” Haffner told Verdict.
“Theoretically this leaves the merging parties open to the prospect of another lengthy drawn out process to deal with competition concerns raised.”
However, Haffner adds that “it is hard to believe Microsoft would have taken this new course without a high degree of confidence it will now in due course, finally, get a regulatory green light from the CMA.”
The gaming industry will be worth a whopping $470bn in less than a decade, increasing by more than double from its 2021 $197bn valuation, according to research firm GlobalData.
It comes after the once “recession-proof” video game industry witnessed a rare decrease in user growth as the world manoeuvred itself out of the coronavirus pandemic in 2022.
“The maturation of [VR and AR] will transform the way games are distributed, consumed, and monetised in the coming years,” GlobalData said.
Adding: “As a result, the video games industry is attracting investments from companies in industries including technology, retail, and tourism.”
