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Ubisoft stock up 9% on revised Microsoft-Activision deal

TechnologyUbisoft stock up 9% on revised Microsoft-Activision deal

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Yves Guillemot, CEO and co-founder of Ubisoft, speaks at the Ubisoft Forward livestream event in Los Angeles, California, on June 12, 2023.

Robyn Beck | AFP | Getty Images

Shares of French game maker Ubisoft popped 9% in Europe trading Tuesday after Microsoft submitted a new deal for the takeover of Activision Blizzard to try and appease wary U.K. regulators.

The U.K.’s Competition and Markets Authority confirmed it blocked the original $69 billion deal that Microsoft first put forward in January 2022. The acquisition has also faced regulatory challenges in the U.S. and Europe, but the CMA has been the toughest critic of the takeover, citing concerns that the deal would hamper competition in the nascent cloud gaming market.

The CMA said Microsoft and Activision Blizzard have agreed to a new, restructured agreement, which the CMA will now investigate with a decision deadline of Oct. 18. As part of the new deal, Microsoft will not acquire cloud rights for existing Activision Blizzard PC and console games, or for new games released by Activision Blizzard during the next 15 years, the CMA said. Instead, these rights will be divested to Ubisoft before Microsoft’s acquisition of Activision Blizzard.

“The agreement provides Ubisoft with a unique opportunity to commercialize the distribution of games via cloud streaming,” Brad Smith, president of Microsoft, said in a blog post. “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.”

Ubisoft publishes popular games from the Assassin’s Creed, Tom Clancy’s Rainbow Six and Far Cry franchises.

See also  FTC loses appeals court bid to temporarily block Microsoft-Activision deal

The restructured deal is intended to provide an independent third party with the ability to offer Activision Blizzard’s gaming content to all cloud gaming service providers, including Microsoft itself. Ubisoft offers cloud games on services like Amazon Luna and Nvidia‘s GeForce Now, which compete with Microsoft’s Xbox streaming service.

Smith said Ubisoft will compensate Microsoft through a “one-off payment” and a “market-based wholesale pricing mechanism” that includes pricing options based on usage.

CNBC’s Arjun Kharpal contributed to this report.

Correction: Ubisoft publishes the Assassin’s Creed game franchise. An earlier version misspelled the name of the franchise.

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