UK's CMA is happy with Microsoft's new Activision deal that addresses its concerns in cloud gaming

UK’s Competition and Markets Authority (CMA) today announced that it is satisfied with the new Activision deal, and it addresses the concerns it had around cloud gaming. Under that new deal, Microsoft will not acquire the cloud gaming rights held by Activision, instead it will be sold to Ubisoft Entertainment SA (Ubisoft), before the deal is completed.

Since Ubisoft will own the cloud gaming rights, Microsoft will no longer control cloud gaming rights for Activision’s content, so it can’t limit access to these games to rival cloud streaming platforms. With this new deal, Ubisoft can offer Activision’s games both directly to consumers and to all cloud gaming service providers however it chooses. As part of the deal, Microsoft will also port Activision games to operating systems other than Windows and support game emulators when requested. Ubisoft will pay Microsoft for the cloud streaming rights to Activision’s games through a one-off payment and through a market-based wholesale pricing mechanism, including an option that supports pricing based on usage.

Also, Microsoft will receive a non-exclusive licence from Ubisoft for cloud streaming rights to the extent necessary for Microsoft to fulfil its obligations under its commitments to the European Commission and certain existing third-party cloud streaming agreements including Nvidia, Boosteroid and others.

The CMA also had limited residual concerns that certain provisions in the sale of Activision’s cloud streaming rights to Ubisoft could be circumvented, terminated, or not enforced. To address these concerns, Microsoft has offered remedies to ensure that the terms of the sale of Activision’s rights to Ubisoft are enforceable by the CMA.

“This is a new and substantially different deal, which keeps the cloud distribution of these important games in the hands of a strong independent supplier, Ubisoft, rather than under the control of Microsoft,” said Colin Raftery, senior director of mergers and Phase 1 decision maker.

“With additional protections to make sure that the deal is properly implemented, this will maintain the structure of the market, enabling open competition to continue to shape the development of cloud gaming in the years to come, and giving UK gamers the opportunity to access Activision’s games in many different ways, including through cloud-based multigame subscription services,” Colin added.

You can read the CMA’s full decision here. The CMA has now opened a consultation, until 6 October, on Microsoft’s proposed remedies.