Microsoft and Ubisoft have announced a new 15-year agreement that will give Ubisoft complete cloud streaming rights to Call of Duty and all other Activision Blizzard titles, effective once the $69 billion Microsoft-Activision-Blizzard acquisition closes. 

Last month, Microsoft and Activision Blizzard agreed to extend the highly anticipated acquisition deadline to Oct. 18. Now the Windows publisher must satisfy the concerns of the UK-based Competition and Markets Authority, or face billions in costly termination fees.  

Despite Microsoft’s recent victory against a Federal Trade Commission lawsuit in July, there is still uncertainty surrounding the outcome of the Xbox manufacturer’s quest to acquire Activision Blizzard. 

Brad Smith, President and Chairman of Microsoft, told MSNBC that he was hopeful that the new restructuring of cloud streaming rights would satisfy the concerns of all parties involved.

“I think hope is on the horizon. We have worked very hard, most recently to address the concerns of the UK Competition Markets Authority, that’s what led us to make a big decision a week ago to spin out the cloud game streaming rights to Ubisoft, an important French games publisher,” he said. “We prevailed in court in the United States, we’ve ensured that we continue to comply even while we spin out these rights to Ubisoft. Our commitments in the European Union as the CMA in the UK said there’s no greenlight, but they will review our proposal and I’m hopeful that by the middle of October, we may just see this come together.” 

In a recently published Microsoft Blog post Smith explained that the inclusion of Ubisoft seeks to directly address concerns outlined by the CMA. 

“As a result of the agreement with Ubisoft, Microsoft believes its proposed acquisition of Activision Blizzard presents a substantially different transaction under UK law than the transaction Microsoft submitted for the CMA’s consideration in 2022,” he 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.”

Per the terms of the near $70 billion acquisition, Microsoft could pay a termination fee of $4.5 billion if the deal “does not close” by Sept. 15. 

Additional details related to the extension of the agreement:

  • Activision Blizzard is entitled to pay $0.99 per share to its shareholders.
  • Both parties have agreed that the deal termination fee is not subject to any condition other than failure to close.
  • If the deal does not close by August 29, 2023 the termination fee payable by Microsoft if the agreement is terminated will increase from $3 billion to $3.5 billion. If the deal does not close by September 15, 2023, it will increase from $3.5 billion to $4.5 billion. Any termination fee will only be paid if the deal fails to close.

Chris Early, Senior Vice President, Strategic Partnerships and Business Development at Ubisoft, said the deal will undoubtedly bring more options to gamers. 

“We’re dedicated to delivering amazing experiences to our players wherever they choose to play,” Early said. “Over the past 15 years we’ve built and honed our online services and distribution ecosystem into one of the most complete in the industry. Today’s deal will give players even more opportunities to access and enjoy some of the biggest brands in gaming.”

While Ubisoft is the most recent to join Microsoft’s list of partnerships, the Xbox creator has continued to forge relationships with gaming giants, most notably with Nintendo, NVIDIA, Ubitus and Boosteroid in March. 

This is a developing story. 

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