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Eliminating Monopoly Concerns, Microsoft Sells Activision Blizzard Cloud Gaming Rights to Ubisoft

US technology giant Microsoft has announced that it will sell cloud gaming rights for Activision Blizzard to French gaming company Ubisoft in order to address concerns from the UK’s antitrust regulatory agency and secure approval for the acquisition. Ubisoft’s stock price soared by over 8% in response.

According to reports from MarketWatch, Reuters, and other foreign media outlets, Microsoft submitted a revised proposal for the acquisition of Activision Blizzard to the UK Competition and Markets Authority (CMA) on August 22. Microsoft has agreed to sell existing and future cloud streaming rights for Activision Blizzard’s games on computers and gaming consoles to Ubisoft over the next 15 years, thereby addressing the CMA’s concerns about monopolistic market practices.

This agreement does not apply to the European Union market, as EU regulatory authorities had previously approved Microsoft’s acquisition of Activision Blizzard. However, Ubisoft will obtain non-exclusive licensing for the cloud streaming rights to Activision Blizzard games in the EU market.

According to Yahoo Finance, Ubisoft’s stock, listed in France, surged by 8.51% on August 22, closing at €29.19, making it the top performer in the pan-European STOXX 600 index. In the future, gamers will be able to enjoy Activision Blizzard games through Ubisoft+ Multi Access, a multi-platform subscription service.

Microsoft had announced its $69 billion acquisition of Activision Blizzard in January 2022 and has been gradually overcoming regulatory hurdles. It has received approvals from EU and US regulatory authorities, but as of now, it has not received approval from UK regulatory authorities. The UK authorities are concerned that Microsoft’s monopoly on Activision Blizzard’s major titles could hinder competition in the emerging cloud gaming market. The UK regulatory authority is expected to make a final decision by October 18.

According to Barron’s, experts believe that Microsoft’s agreement with Ubisoft reflects its long-term strategy for its gaming business. Raymond James analyst Andrew Marok stated that Microsoft made significant concessions in the revised agreement, which may lead UK authorities to change their stance. He also believes that Microsoft’s actions are aimed at making short-term concessions to protect the long-term interests of the acquisition.

Wedbush analyst Nick McKay believes that, compared to selling individual game titles, Microsoft sees a broader opportunity. In the future, users may not want to purchase expensive computers or gaming consoles and may prefer subscription services that allow them to play games on different devices. He also sees potential for Microsoft to become the “Netflix of the gaming industry” through the acquisition of Activision Blizzard.

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