Microsoft and Activision Blizzard have submitted a revised deal to U.K. regulators in a bid to gain approval for their $75 billion merger, which has prompted a fresh investigation.
Details of the Revised Deal
As part of the revised deal, Microsoft will sell the non-European streaming rights to Activision games to Assassin's Creed publisher Ubisoft. Microsoft will not be able to acquire these rights for the next 15 years, according to the CMA. Ubisoft, on the other hand, will have the ability to license out Activision's content to any cloud gaming provider.
Stock Market Reactions
Following the announcement of the revised deal, Microsoft's stock rose 0.5% in premarket trading, while Activision's shares climbed 1.4%. Ubisoft, which appears to be a beneficiary of the new agreement, saw its shares surge by 7% in Paris trading.
Microsoft's Challenge and Prior Agreements
The CMA noted that Microsoft took the "unusual step" of challenging their original decision to block the deal, citing subsequent agreements with the European Commission and a licensing agreement with Sony. In July, Sony agreed to a 10-year deal to keep Activision's Call of Duty games on its PlayStation consoles. Additionally, the European Commission required Microsoft to license Activision's games to competing cloud gaming services as part of their approval.
Positive Outlook for Players and Industry
Microsoft expressed optimism about the revised deal, stating that it is positive for players, the progression of the cloud game streaming market, and the growth of the industry.
Outlook for the Deal
As the last major regulator that blocked the deal, the U.K.'s CMA faces pressure to either stand its ground or follow the lead of other regulators. However, the fresh investigation means a longer delay for the merger and no guaranteed approval for Microsoft and Activision.