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Microsoft submits new Activision Blizzard takeover deal to UK

Microsoft submits new Activision Blizzard takeover deal to UK

Microsoft logo is seen on a smartphone placed on displayed Activision Blizzard’s games character.

Dado Ruvic | Reuters

Microsoft on Tuesday submitted a new deal to U.K. regulators for the takeover of Activision Blizzard after the rejection of its initial proposal.

The U.S. technology giant first put forward the $69 billion acquisition of Activision in January 2022 but has since faced regulatory challenges in the U.S., Europe and U.K.

On Tuesday, the U.K.’s Competition and Markets Authority confirmed it has blocked the original deal. However, it said both Microsoft and Activision have agreed to a new, restructured agreement, which the CMA will now investigate with a decision deadline of Oct. 18.

The Redmond tech giant anticipates the review can be completed before this time, Microsoft President Brad Smith said in a Tuesday statement.

Under the restructured deal, Microsoft will not acquire cloud rights for existing Activision PC and console games, or for new games released by Activision during the next 15 years, the CMA said.

Instead, these rights will be divested to French game publisher Ubisoft Entertainment prior to Microsoft’s acquisition of Activision, the CMA added.

Ubisoft shares were up more than 4% in early Europe trade.

CMA blockade

Microsoft’s new proposal to the U.K.

The restructured deal and cloud rights divestment to Ubisoft are intended to provide an independent third-party content supplier with the ability to supply Activision’s gaming content to all cloud gaming service providers, including to Microsoft itself.

Ubisoft will be able to license out Activision content under different business models, including subscription services.

The deal would also require Microsoft to provide versions of games on operating systems other than Windows, which it owns.

“Microsoft has notified a new and restructured deal, which is substantially different from what was put on the table previously,” Sarah Cardell, CEO of the CMA, said in a statement.

“As part of this new deal, Activision’s cloud streaming rights outside of the EEA (European Economic Area) will be sold to a rival, Ubisoft, who will be able to license out Activision’s content to any cloud gaming provider. This will allow gamers to access Activision’s games in different ways, including through cloud-based multigame subscription services.”

Cardell emphasised this is not a signal of an approval for the deal.

“This is not a green light. We will carefully and objectively assess the details of the restructured deal and its impact on competition, including in light of third-party comments.”

For its part, Microsoft will be compensated for its divestment to Ubisoft “through a one-off payment and through a market-based wholesale pricing mechanism, including an option that supports pricing based on usage. It will also give Ubisoft the opportunity to offer Activision Blizzard’s games to cloud gaming services running non-Windows operating systems,” Smith said Tuesday.

“We’re dedicated to delivering amazing experiences to our players wherever they choose to play,” Chris Early, senior vice president of strategic partnerships and business development at Ubisoft, said on Tuesday. “Today’s deal will give players even more opportunities to access and enjoy some of the biggest brands in gaming.”