Britain's anti-trust watchdog, the Competition and Markets Authority, said Tuesday it was looking into a restructured deal proposed by Microsoft for its $69 billion takeover of British game developer Activision. File Photo by John Angelillo/UPI
Aug. 22 (UPI) -- Microsoft has proposed selling cloud streaming rights for Activision Blizzard computer games to French game developer Ubisoft to address the concerns of British anti-trust regulators who have blocked the software giant's $69 billion takeover.
Instead of buying Activision outright, the deal would be restructured to acquire a narrower set of rights in an effort to address concerns about the impact of the proposed acquisition on cloud game streaming raised by Britain's Competition and Markets Authority, Microsoft Vice Chairman and President Brad Smith wrote in a blog post Monday.
"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," Smith wrote.
"The agreement provides Ubisoft with a unique opportunity to commercialize the distribution of games via cloud streaming. The agreement will enable Ubisoft to innovate and encourage different business models in the licensing and pricing of these games on cloud streaming services worldwide."
It would also give Ubisoft the opportunity to offer Activision games to cloud gaming services running non-Windows operating systems, with the rights ceded to it "in perpetuity," said Smith, adding that he anticipated the CMA would be able to complete its review of the amended deal before Microsoft's agreement with Activision expires Oct. 18.
An investigation into the amended deal had been launched in line with the CMA's normal processes and the statutory deadline for a decision, the watchdog said in a news release Tuesday in which it confirmed it had placed a worldwide legal block on Microsoft's acquisition of Activision, as originally proposed.
The anti-trust watchdog said the new deal was "substantially different from what was put on the table previously" and would allow gamers to access Activision's games in different ways, including through cloud-based multigame subscription services.
CMA Chief Executive Sarah Cardell stressed, however, that the fact the investigation had been initiated was "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.
"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," she said.
The proposed changes to the deal come a month after Microsoft and Activision extended the deadline to complete the merger to October after the CMA postponed a July 14 decision on whether to reverse an interim ban on the acquisition.
The CMA pushed back its decision by six weeks to allow it more time to consider an appeal by Microsoft against a blocking order it issued in May on grounds the deal would reinforce Microsoft's dominance in cloud computing.
It said it needed the extra time to properly weigh Microsoft's "detailed and complex" overture arguing material changes in circumstances and special reasons meant the merger should be approved.