Microsoft Proposes New Deal for Activision Takeover With Ubisoft — Update

By Michael Susin

The U.K. Competition and Markets Authority plans to review Microsoft’s new proposed deal to acquire Activision, after it blocked an initial $75 billion takeover proposal earlier this year.

The CMA said on Tuesday that Microsoft has offered to only buy the cloud streaming rights to all current and future Activision games released during the next 15 years in the European Economic Area.

The cloud streaming rights outside the European Economic Area would be divested to Ubisoft Entertainment once the acquisition is completed, it added.

Under the deal Ubisoft will be able to license out Activision’s content under different business models, including subscription services. The deal also proposes that Ubisoft would have the ability to require Microsoft to provide versions of games on operating systems other than Windows.

“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,” CMA Chief Executive Sarah Cardell said.

“Our goal has not changed — any future decision on this new deal will ensure that the growing cloud gaming market continues to benefit from open and effective competition driving innovation and choice.”

A new investigation will be carried out with a deadline for a decision set for Oct. 18.

Microsoft’s Vice Chair and President Brad Smith said in a blog post in the company’s website that Ubisoft will compensate Microsoft for the cloud streaming rights to Activision Blizzard’s games through a “one-off payment and through a market-based wholesale pricing mechanism, including an option that supports pricing based on usage”.

The deal would give Ubisoft the opportunity to offer Activision Blizzard’s games to cloud gaming services running non-Windows operating systems, he added.

In a separate statement, Ubisoft said the deal would enable to bring cloud streaming access of Activision Blizzard games to more players all around the world, further strengthening Ubisoft’s content offering through its subscription service Ubisoft+.

Activision didn’t immediately reply to a request for comment.

Write to Michael Susin at michael.susin@wsj.com