Microsoft and Activision $69B deal includes Ubisoft streaming rights, aiming for regulator approval.

Microsoft and Activision $69B deal includes Ubisoft streaming rights, aiming for regulator approval.

Microsoft’s Acquisition of Activision Blizzard: A Game-Changing Deal

Microsoft’s Acquisition of Activision Blizzard

Microsoft’s ambitious plan to acquire game publisher Activision Blizzard for a staggering $69 billion has hit some regulatory roadblocks. However, the tech giant is not backing down and has come up with a unique strategy to secure approval from UK and US regulators. In a surprising move, Microsoft has struck a deal with another major game publisher, Ubisoft, which could potentially tip the scales in their favor.

According to a recent announcement from Microsoft, Ubisoft will gain cloud streaming rights for Activision Blizzard games as part of the deal. This means that for the next 15 years, Ubisoft’s subscription service will offer current and new Activision games for cloud streaming. This exciting development opens up a world of possibilities for gamers, as they will be able to access these popular titles through Ubisoft’s services, including Ubisoft Plus, available on PC, Xbox, Playstation, and Amazon Luna.

While Microsoft will still have Activision Blizzard games on its Xbox Cloud Gaming platform, these titles will no longer be exclusive to Microsoft’s streaming platforms. This move reflects Microsoft’s commitment to expanding its reach and making gaming more accessible to a wider audience.

The acquisition of Activision Blizzard would catapult Microsoft into the ranks of the top three video game publishers, placing them right behind their rival, Sony. Activision Blizzard is renowned for its major franchises, including the blockbuster titles Call of Duty, Candy Crush, and Overwatch. Adding these beloved games to Microsoft’s catalog would undoubtedly give their gaming ecosystem a much-needed boost.

Originally scheduled for July 18, the deadline for finalizing the deal has been extended to October 18 to allow more time for regulatory approval. However, if the deal falls through, Microsoft will have to pay a termination fee, or what some might call a “breakup” fee, to Activision. The fee currently stands at $3 billion but will increase to $3.5 billion on August 29 and further to $4.5 billion if the deal isn’t completed by September 15.

Despite Microsoft’s success in overcoming some merger-related challenges, there are still hurdles to clear. Let’s take a closer look at the deal and what it means for gamers.

Who’s Left to Approve the Deal?

Microsoft’s acquisition of Activision Blizzard still requires approval from British regulators. In April, the UK’s Competition and Markets Authority (CMA) blocked the deal, citing concerns about higher prices and limited choices for gamers. Microsoft has appealed this ruling, arguing that the CMA made errors in its calculation and assessment of market share data for cloud gaming services. The recent deal with Ubisoft is Microsoft’s attempt to address the anti-competitive concerns raised by the CMA.

In the US, the Federal Trade Commission (FTC) has also opposed the deal, expressing concerns about its potential impact on competition within the video game industry. However, the FTC’s challenges have thus far been unsuccessful. In early July, a federal judge declined to issue a preliminary injunction that would have paused the merger. The FTC now plans to put its in-house case on hold, as it has historically dropped opposition to deals when a federal judge refuses to grant an injunction.

It’s worth noting that Microsoft has already received approval from the European Union, China, Japan, and other major countries, further highlighting the global significance of this deal.

What Does This Deal Mean for Gamers?

For Xbox Game Pass subscribers, the merger with Activision Blizzard would be a game-changer. Similar to how Microsoft incorporated Bethesda games after acquiring the company in 2020, Activision Blizzard’s extensive catalog of games would likely be integrated into the service. This means that Xbox Game Pass subscribers would gain access to a wealth of new gaming experiences.

However, the impact on gamers who don’t own an Xbox but instead use a Sony PlayStation or Nintendo Switch console is less clear. Critics of the deal have expressed concerns that Microsoft might make future games developed by Activision exclusive to their own platforms, potentially limiting choices for gamers. Nevertheless, the Ubisoft deal offers a glimmer of hope for PlayStation users, as it provides a pathway for bringing Activision games to the PlayStation platform through Ubisoft Plus.

One game that has garnered significant attention is Activision’s Call of Duty, a perennial best-seller. Microsoft had previously secured a 10-year agreement with Nintendo to bring Call of Duty games to their consoles. However, when presented with a similar agreement last year, Sony reportedly rejected it. Nonetheless, on July 16, Xbox boss Phil Spencer announced a 10-year “binding agreement” with Sony to keep Call of Duty on the PlayStation platform. The details of this new arrangement remain undisclosed, leaving room for speculation about how it differs from Microsoft’s previous offer.

To address concerns about competition in the video game industry, Microsoft has also entered into a 10-year agreement with Nvidia. This agreement ensures that Nvidia’s cloud gaming platform, GeForce Now, will continue to have access to games from both Microsoft and Activision. These strategic partnerships with competitors demonstrate Microsoft’s commitment to maintaining a healthy level of competition in the industry.

In conclusion, Microsoft’s acquisition of Activision Blizzard has the potential to reshape the gaming landscape. The deal, if approved, would bring together two industry giants and offer gamers a wider range of experiences. While regulatory hurdles remain, Microsoft’s innovative approach, exemplified by the Ubisoft deal, demonstrates their determination to address concerns and create a more inclusive gaming ecosystem. As gamers eagerly await the outcome, one thing is certain: the future of gaming is set to be more exciting than ever before.