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Microsoft Adjusts $75bn Activision Deal To Sway CMA

Microsoft has radically modified the terms of its $75 billion Activision Blizzard acquisition after the Competition and Markets Authority (CMA) issued a worldwide ban on the first deal submitted.

CMA had initially blocked the deal over antitrust concerns and that it would suppress innovation in the growing cloud gaming market.

In an updated merger agreement sent to the CMA, both companies have agreed to give exclusive rights to Ubisoft to distribute Activision Blizzard titles like Call of Duty on PC and console.

After the deal was submitted, Ubisoft shares surged up roughly 10%, with the agreement potentially granting the France-based games company streaming rights to popular titles and new ones launched over the next 15 years.

Additionally, and within the terms of the deal, other subscription services, like Netflix, could license the games as part of the agreement.

With the proposed agreement, Microsoft has released control over two areas, business cloud gaming and cross-platform play, which the company had previously fought for by Microsoft not having the rights to release Activision Blizzard games exclusively on its own cloud streaming service Xbox Cloud Gaming.

Conversely, games can be released on Microsoft’s cloud platforms which Activision was against before as a private corporation.

According to the Financial Times, presenting a new deal during antitrust proceedings is uncommon, and it will essentially activate a new review but due to most of the heavy lifting already being completed, it could be a swifter process, claims two people close to CMA.

“This is not a green light. We will carefully and objectively assess the details of the restructured deal and its impact on competition,” CMA chief executive Sarah Cardell said.

Microsoft may have relinquished control in some areas within the new terms but it will keep control on overseeing game development and also rights to mobile game streaming.

“A key motive behind the Activision acquisition is to enable Microsoft to be more competitive in the mobile gaming space,” said Louise Wooldridge, games analyst at research group Ampere Analysis.
“It is implied that mobile is of greater commercial importance to Microsoft at this time than cloud gaming.”



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