Huh: Microsoft To Sell Cloud Rights To Activision Games To Ubisoft To Placate The CMA
from the pound-of-flesh dept
Well, this certainly isn’t an outcome I would have predicted. While the saga of Microsoft’s attempt to acquire Activision Blizzard has certainly taken a long and winding road, as it stands today all the regulatory hurdles have seemingly been cleared save for the UK’s Competition & Markets Authority (CMA). Unlike the FTC’s challenge to the deal, which objected more holistically, the CMA’s comments on its concerns over the merger largely focused on how Microsoft’s future titles would handle cloud/streamed-gaming.
Well, as it has with all the regulators, Microsoft appears to have listened to the concerns and then tailored changes to the merger deal to address them in a fairly minimal fashion. But I will admit I didn’t anticipate that Microsoft would simply sell the cloud-streaming game rights for current and future titles to Ubisoft, of all companies.
“To address the concerns about the impact of the proposed acquisition on cloud game streaming raised by the UK Competition and Markets Authority, we are restructuring the transaction to acquire a narrower set of rights,” Microsoft President Brad Smith wrote in an August 22 blog post. “This includes executing an agreement effective at the closing of our merger that transfers the cloud streaming rights for all current and new Activision Blizzard PC and console games released over the next 15 years to Ubisoft Entertainment SA, a leading global game publisher. The rights will be in perpetuity.”
Well, that’s certainly a move. Now, in addition to appearing on Microsoft’s own streaming service, Game Pass, the titles would be available on Ubisoft’s PC and console streaming platform, or I suppose any other platform that Ubisoft would want to negotiate streaming rights with. The restructured deal would also allow Ubisoft to compel Microsoft to make versions of its titles for non-Windows operating systems.
How exactly will this messy divestiture work? According to the Competition and Markets Authority in the UK, Ubisoft will compensate Microsoft through a “one-off payment” as well as a “wholesale pricing mechanism” that includes the option to pay based on usage. Ubisoft will then have the ability to license out the games to other subscription services, as well as to pay a fee to force Microsoft to port Activision Games to competing PC gaming operating systems like Linux.
Now, the CMA made sure to note that its comment does not indicate that this new version of the acquisition has been or will be approved. We’re not done with this whole thing just yet.
But the writing is on the wall. While possible, I simply can’t imagine a world in which every other regulatory body has approved this deal and the CMA still rejects it.
Filed Under: cloud rights, cma, competition, uk, video game streaming, video games
Companies: activision, activision blizzard, microsoft, ubisoft
Comments on “Huh: Microsoft To Sell Cloud Rights To Activision Games To Ubisoft To Placate The CMA”
Yeah, that’s exactly what this situation needs – ANOTHER problematic game company.
Great lesson for the kids out there – if you’re a big enough company that provides a popular product, you can withstand anything, even covering up the fact that your (then) Brand Marketing Manager was a rapist.
They can force MS to port games to Linux and other operating systems because cloud streaming.
Wut?
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Admittedly a strange way to kill off FOSS operating systems, but definitely A way, nonetheless.
the funny thing is, MS keeps just going “Oh, you have a problem with this? Here’s a solution basically no one can argue is giving us too much control, next!”
Can you imagine Sony ever doing anything like this?
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Sony’s going to put a rootkit on your computer for that comment!
Simple explanation?
My guess: Microsoft is already planning to buy Ubisoft Entertainment SA.
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I may have made this same prediction in our writing room discord chat 🙂
I’d rather the deal fall through. This is a disaster.
my interpretation of the news was that Microsoft has to license the cloud rights for their own first-party titles from Ubisoft, they don’t automatically get them just because they’re their own games.
Forever (at least for the games made in the next 15 years).
Watch as a few years after a release, Microsoft is forced to remove their own games, from their own cloud platform, because Ubisoft doesn’t want to license them anymore.
I think this means that Microsoft believes that game streaming is not going to take off, (essentially) ever.
Local hardware is relatively cheap, and for game streaming you need both high bandwidth (for graphical fidelity, otherwise just play on a low power local box) and low latency (which also means servers in every location).
This is a high ask from both the company and the consumer, and it doesn’t seem like any near future technology can solve these problems.
What I do not understand is the authorities’ obsession with theoretical, essentially non existing cloud streaming market.
Re: Exactly
Couldn’t agree more. The CMA’s obsession with cloud is mind boggling. There are better reasons to block this deal. And, MS giving away the cloud streaming rights for the next 15 years of games in perpetuity says exactly what they think about the future of cloud streaming.
Saying something without really doing anything
On paper I suppose this makes Microsoft look good, but in practice, it wouldn’t amount to much. Ubisoft doesn’t have a cloud streaming service, so the only thing it could do is put games on other services like GeForce Now (which Microsoft already struck a deal to include) and maybe Amazon Luna. It could mean that those games would be included in Ubisoft+, but that doesn’t seem to be the case from the wording of this article.
As for porting games to Linux, Microsoft knows Ubisoft is not about to do this when Valve already has Proton working on pretty much every game, and that doesn’t financially benefit Ubisoft at all anyway. This is all just theatrics.
See!!
Microsoft is doing this merger for the expansion of gaming. Not restriction.
The Sony fans and sky-is-falling tin hatters are the only ones missing reality. Microsoft wants the money. That comes from putting games on more platforms. Xbox hardware sales are a writeoff for the company.
Unlike Sony who was already facing a large reduction in sales and consumer support for its electronics decision. Their choices the last 5 years in content has pushed developers away from their gaming platform. Fans have left in the hundreds of thousands for other systems under the exposure of their censorship practices.
Musicians are leaving the audio wing by the hundreds over lopsided and outdated payment arrangements.
Microsoft are already prepping a halo release for MacOS. Microsoft is expanding, not restricting, game access with this purchase. Their agreements with Apple and Nintendo prove this.
Sorry Sony diehards: nobody is looking to save you from your choice’s poor decisions.
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👍