Call Of Duty-Maker Activision To Sell Streaming Rights To Ubisoft To Seal Microsoft Deal

Both Microsoft and Activision have proposed fresh terms to counter the regulatory hurdles.

Microsoft is engaged in discussions to extend its acquisition contract with Activision Blizzard. ( Image Source :Getty )

In a strategic move to address concerns raised by British regulators, Microsoft has announced a revised approach to its acquisition of Activision. The tech giant revealed on Tuesday that it has orchestrated a deal wherein Activision will offload its non-European streaming rights to Ubisoft Entertainment. The United Kingdom's Competition and Markets Authority (CMA) has notably been the sole regulatory body to oppose the monumental $69 billion merger within the video gaming sphere. This resistance has compelled Microsoft to devise an alternative arrangement aimed at securing the acquisition of the renowned Call of Duty creator.

Standing firm on its prior decision to block the initial proposition, the CMA reiterated its stance on Tuesday.

Consequently, both Microsoft and Activision have proposed fresh terms to counter the regulatory hurdles. The crux of the modified agreement lies in Activision's concession of cloud streaming rights outside the European Economic Area. Ubisoft is set to acquire these rights, encompassing all present and forthcoming Activision PC and console titles slated for release over the next 15 years.

As articulated by the CMA, the intricacies of this transaction grant Ubisoft the capacity to exploit these rights to other providers of cloud gaming services, which extends to Microsoft itself. This arrangement marks a strategic manoeuvre by the companies to navigate the regulatory landscape and pave the way for substantial acquisition.

Meanwhile, according to a source familiar with the matter, Microsoft is engaged in discussions to extend its acquisition contract with Activision Blizzard, reported Reuters. The extension is being sought to overcome the remaining regulatory challenges and ensure the successful completion of the $69 billion deal.

The expiration of the contract itself would not automatically result in the collapse of the deal, as it grants both companies the right to walk away from the transaction. However, Microsoft, the maker of the Xbox gaming console, is eager to secure an extension to prevent Activision from being courted by other potential acquirers or experiencing a change of heart, as stated by the source.