Activision Blizzard to sell streaming rights to Ubisoft to expedite takeover by Microsoft

The godfather of the “Call of Duty” game, Activision Blizzard will sell its non-European streaming rights to Ubisoft Entertainment to get the biggest deal of the video gaming industry past the British regulators, their potential owner Microsoft stated.

Britain’s Competition and Markets Authority (CMA) is the only regulator to block Microsoft’s $69 billion Activision Blizzard’s takeover deal, in a test of its post-Brexit clout. Microsoft said that it believed its new proposal was a ‘substantially different transaction’ and that it expects the CMA review process to be completed before October 18.

The CMA in their statement said that the revised transaction would “allow Ubisoft to commercialize these rights to other cloud gaming services providers, including to Microsoft itself”.

Ubisoft’s shares listed in Paris were up 6.5% at 0723 GMT, making them the top gainer on the pan-European STOXX 600 index.

The British regulator, CMA in July took the rare step of reopening its investigation into this lucrative deal after Microsoft said commitments accepted by the European Union and a brand new agreement with Sony constituted a material change. But it stated on Tuesday that it is not satisfied with Microsoft’s reasoning, forcing the tech giant from the U.S. to come back with a new deal to address its concerns over competition in the market of cloud streaming which is still in its nascent stage.

Under the updated terms, Microsoft will not be able 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 their rival services.

The two companies have proposed new terms, with Activision’s cloud streaming rights outside of the European Economic Area being divested to Ubisoft for all current and future Activision PC and console games released during the next 15 years, reflecting the fact that Brussels had already approved the deal. Ubisoft will, however, receive a non-exclusive license for Activision’s European gaming rights too, enabling the French group to also stream the rights in the EU.

In January last year, Microsoft had announced its plan to acquire the gaming giant Activision Blizzard for $69 billion making it the biggest ever deal of the gaming industry. Although the due process is still to be completed, market analysts and experts believe that the deal will be closed in not more than 12 months. With the completion of the takeover, Microsoft would look to further diversify it’s business operations and become active at larger avenues with a considerable consumer base.

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