EU May Need to Review Microsoft’s Restructured Activision Blizzard Deal

Earlier today, Microsoft announced that it has restructured its proposed acquisition of Activision Blizzard to address the concerns of the UK’s CMA, which confirmed today that the original deal was now “prohibited on a worldwide basis.” Under the new deal, Microsoft will transfer the cloud streaming rights for all current and new Activision Blizzard games released over the next 15 years to Ubisoft.

While Microsoft is confident that the review process for this modified transaction will be completed before the 90-day extension in its acquisition agreement with Activision Blizzard expires on October 18, the EU may also decide to review the restructured deal. In a statement shared with The Verge, European Commission spokesperson Arianna Podesta said that “The Commission is carefully assessing whether the developments in the UK require another notification to the Commission.”

When the European Commission approved Microsoft’s acquisition of Activision Blizzard back in May, it did so after obtaining more concessions from Microsoft. Notably, the Redmond giant agreed to automatically license popular Activision Blizzard games to competing cloud gaming services, and the company said at the time that this would apply globally.

This wasn’t enough to make the UK’s CMA change its stance, however. That’s why Microsoft chose to submit a new deal for review, and today marks the beginning of a new phase 1 investigation by the CMA.

In practice, Microsoft transferring cloud streaming rights for Activision Blizzard games to Ubisoft means that the software giant won’t be able to make Activision Blizzard games exclusive to its own Xbox Cloud Gaming service. However, Ubisoft will license back these games to Microsoft so they can be available on Xbox Cloud Gaming. Moreover, Ubisoft will also make Activision Blizzard games available on its own Ubisoft+ subscription service, which also offers a Multi-Access tier allowing members to access these games across multiple platforms.

Microsoft emphasized today that if Ubisoft will have cloud streaming rights for Activision Blizzard games outside the EU, the company will still acquire the necessary rights to fulfill its commitments to the European Commission, as well as its existing streaming agreements with Nvidia, Boosteroid, Ubitus, and Nware. As of this writing, though, we don’t know if Microsoft may need to get this restructured deal approved in the EU in addition to the UK.

Despite Microsoft’s confidence to complete the deal before the end of October, today marks the beginning of a new chapter in an already excruciatingly long saga. This can’t be over soon enough.