Microsoft (MSFT) is making some adjustments to its $69 billion acquisition of “Call of Duty” videogame maker Activision Blizzard (ATVI) in a bid to overcome a final block of the deal by a UK regulator.
The restructured proposal, Microsoft President Brad Smith said in a blog post Tuesday, would transfer Microsoft’s cloud streaming rights for all current and new Activision Blizzard PC and console games released over the next 15 years to game publisher Ubisoft Entertainment SA.
“To address the concerns about the impact of the proposed acquisition on cloud game streaming raised by the UK Competition and Markets Authority (CMA), we are restructuring the transaction to acquire a narrower set of rights,” Microsoft president Brad Smith said in a blog post Tuesday.
The CMA has moved to block the merger over concerns that combining the companies would give Microsoft outsized and unfair control over the cloud market. In July, after a US judge declined the Federal Trade Commission’s request to pause the deal for the duration of its antitrust challenge, the CMA agreed to reopen negotiations with Microsoft.
The Federal Trade Commission (FTC) has backed down from its separate decision to challenge the tie up over concerns that it would give Microsoft an unfair advantage in cloud gaming, gaming subscription services, and gaming consoles.
The restructured deal announced Tuesday would remove Microsoft’s right to release Activision Blizzard games exclusively on its own cloud streaming service—Xbox Cloud Gaming – and to exclusively control the licensing terms of Activision Blizzard games for rival services, including the ability to offer Activision games on non-Windows operating systems
Ubisoft would pay Microsoft for the cloud streaming rights to its Activision games, both through a “one-off payment” and through a “market-based wholesale pricing mechanism” that includes an option for “use-based pricing.” Microsoft didn’t disclose the amount of the compensation.
Microsoft said it anticipates that the CMA review process can be completed before the 90-day extension that the regulator set when it said in July that it would reopen negotiations with the company.
Microsoft’s agreement to acquire Activision Blizzard expires October 18.
Global regulators including those in the EU, Brazil, China, Japan, and South Korea have approved the deal. When the UK’s CMA blocked the acquisition, it said it could lead to “reduced innovation and less choice for UK gamers over the years to come.”
Activision Blizzard is the largest game publisher in North America. In addition to the hit “Call of Duty” franchise, the company also offers “World of Warcraft,” “Diablo,” and “Overwatch.” The firm also owns mobile game publisher King, the company behind “Candy Crush.”
Adding those franchises to Microsoft’s existing titles, including “Halo” and “Forza,” would catapult Microsoft past Nintendo (NTDOY) to make the company the second-largest home console maker by revenue behind Sony (SONY).
It would also put Microsoft behind Tencent and Sony as the third-largest gaming company by global revenue.
Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.
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