MSFT - Microsoft revises Activision deal to win CMA approval

2023-08-22 12:55:25 ET

Microsoft Corp (NASDAQ: MSFT) has revised its $69 billion agreement with Activision Blizzard Inc (NASDAQ: ATVI) in a bid to secure regulatory approval from the Competition and Markets Authority of the United Kingdom that blocked the original deal on Tuesday.

Ubisoft comes in the picture in the new deal

The tech behemoth has agreed to hand over the cloud streaming rights to existing Activision games (both on PC and console) to Ubisoft Entertainment.

Rights to the new games that Activision will release over the next fifteen years will rest with the French game publisher as well. According to Sarah Cardell – the Chief Executive of CMA:

The restructured deal is substantially different. We haven’t taken a final decision. But Microsoft believes this deal fully addresses our competition concerns. We’ll be investigating the [new deal now].

Shares of Ubisoft Entertainment ended nearly 10% up on Tuesday.

What else is included in the revised deal?

The British regulator now has until October 18 ^th to review the restructured agreement but Brad Smith – the President of Microsoft Corp expects the probe to complete earlier.

Note that the revised deal enables Ubisoft to license out Activision titles to other cloud gaming providers and subscription services. On CNBC’s “ Worldwide Exchange ”, CMA’s Cardell also said today:

We want to make sure that gamers can get the benefit of innovation and choice in cloud gaming … keeping that market open to competition.

The revised transaction will make Microsoft launch games on non-windows operating systems as well. Last month, a U.S. judge rejected the FTC’s motion to block the Washington-based multinational from acquiring Activision Blizzard as Invezz reported here .

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