Microsoft rejigs $69B Activision Blizzard deal to placate UK regulators, offers all cloud gaming rights to Ubisoft for 15 years

Microsoft has made a new offer, one that president Brad Smith describes as a "substantially different transaction", in its effort to get its proposed $69 billion acquisition of Activision Blizzard over the finish line with the United Kingdom's Competition and Markets Authority. The CMA had previously blocked the deal on grounds that included concerns about the nascent cloud gaming market, and the restructured deal will see all cloud rights to Activision Blizzard games signed over to Ubisoft for the next 15 years.

The CMA says it will review the new offer, but cautioned "this is not a green light." It is to deliver a decision by October 18. This comes after the EU Commission has approved the deal, joining many other global regulatory bodies, and following the US Federal Trade Commission's failure to block the deal in the courts (these efforts continue, though the chances of the decision being reversed are remote). While the CMA and the UK may seem like small beer in a global context, the fact is the deal cannot proceed as-is without the CMA's approval.

Microsoft's new offer will see streaming rights to all Activision Blizzard games published in the next 15 years transferred to Ubisoft, with those rights held by Ubisoft in perpetuity. "Microsoft will not be in a position either to release Activision Blizzard games exclusively on its own cloud streaming service—Xbox Cloud Gaming—or to exclusively control the licensing terms of Activision Blizzard games for rival services," said Brad Smith.

This is all rather nicer than Smith's comments when the CMA initially blocked the deal, when the suit wailed about Microsoft's "darkest day" in its history of operating in the UK. But it wasn't just Microsoft gnashing its teeth: prominent members of the UK government, the traditionally pro-business Conservative party, were vocal in their opposition to the CMA's decision, seeing it as running counter to the UK's ambitions of being a global tech leader.

Activision Blizzard president Bobby Kotick sent an email to the publisher's staff announcing the news, welcoming the rejigging but saying "nothing substantially changes with the addition of this divestiture". Which does rather seem like saying the quiet part out loud, and may well raise a few eyebrows at the CMA. "More to come," is how Kotick signs off, and clearly he expects this tweak to be enough.

"We will carefully and objectively assess the details of the restructured deal and its impact on competition, including in light of third-party comments," said the CMA's chief executive Sarah Cardell to the BBC. "Our goal has not changed—any future decision on this new deal will ensure that the growing cloud gaming market continues to benefit from open and effective competition driving innovation and choice."

"We believe that this [new offer] is positive for players, the progression of the cloud game streaming market, and for the growth of our industry," ends Brad Smith. "We remain as committed as ever to bringing the incredible benefits of the acquisition to players, developers, and the industry. Today’s development brings us one step closer to bringing the joy of gaming to players everywhere." We've all seen some euphemisms for big-money deals in our time, but that's a cracker.