(News Bulletin 247) – The French group has announced the acquisition of these rights for existing games and for games that will be created in the next 15 years, provided that the acquisition of Activision Blizzard by Microsoft goes to completion. Through this operation, Ubisoft is enhancing the attractiveness of its Ubisoft+ subscription service.

Microsoft and Activision Blizzard set their sights on Ubisoft. The French video game publisher announced on Tuesday that it will take over the “cloud streaming” rights, i.e. the dematerialized rights to stream video games, Call of Duty and any other current or future Activision Blizzard title. come within 15 years of Microsoft taking over Activision Blizzard.

“This agreement will allow Ubisoft to offer access to Activision Blizzard games in ‘cloud streaming’ to a greater number of players around the world. These rights are perpetual”, indicated in a press release the French group.

The Guillemot family-controlled company will be able to offer Activision Blizzard games on its own subscription service, Ubisoft+, and may license those games to other streaming platforms in the future. This assumes, of course, that the acquisition of Activision-Blizzard by Microsoft goes to completion.

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Convince the British CMA

Initiated since the beginning of 2022, this takeover at nearly 69 billion dollars has gradually obtained the authorizations of the competition authorities, but still comes up against the British Competition and Markets Authority (CMA). This last authority has, in recent years, seen its prerogatives widen with the exit of the United Kingdom from the European Union, and has often constituted the last obstacle to major operations (such as the Suez-Veolia merger).

In the case of Microsoft-Activision Blizzard, the CMA had vetoed this takeover in April, precisely worrying about the attacks on competition in the market for dematerialized games.

The transfer of “cloud streaming” licenses to Ubisoft announced on Tuesday constitutes precisely a concession (or “remedy” in the jargon of competition law) that Microsoft and Activision-Blizzard have decided to submit to the CMA to convince it to give the green light for their union.

Small geographical exception however: if Ubisoft would acquire, according to the conditions of the agreement, the exclusive worldwide rights of the Activision Blizzard licenses for “cloud streaming”, these rights would not be exclusive within the European Economic Area (this is i.e. the European Union plus Iceland, Norway and Liechtenstein).

This redemption of rights will be made through a payment, the amount of which has not been specified. The operation also includes “future payments on the performance of the games”, Ubisoft told News Bulletin 247.

Ubisoft takes care of the attractiveness of Ubisoft+

On paper, the potential transaction looks like a win-win for both Microsoft and Ubisoft. “The first reading is done at the level of Microsoft, which seems to be making the last gesture to facilitate the acquisition of Activision and obtain the green light from the last reluctant competition authority, namely the British CMA”, underlines Charles-Louis Planade, analyst at TP ICAP Midcap.

“By signing this agreement Microsoft leaves these rights to Ubisoft, and thus avoids strengthening a competing American giant like Amazon. While selling these rights to an independent and credible player in video games but who does not represent a threat to them”, continues -he.

From Ubisoft’s point of view, “even if the terms of the transaction are not known, it is clearly a great deal because it strengthens the potential offer of their own video game distribution and streaming platform. Which will make this platform more attractive to players, increase traffic and ultimately promote the consumption of their games on their own platform”, develops the analyst.

And in this case “Ubisoft will sell more games without an intermediary and therefore without the associated distribution costs”, concludes Charles-Louis Planade. This will therefore improve its profitability.

On the Paris Stock Exchange, the market enthusiastically welcomed the announcement, Ubisoft shares taking 6.8% around 11:10 a.m., the largest increase in the SBF 120.

Remember that the evolution of the Ubisoft share will be determined above all by the commercial reception of the many releases to come in the coming months. Many “AAA” games (the blockbusters) of the group will soon arrive on the market, in particular “Assassin’s Creed Mirage” in October and “Avatar: Frontiers of Pandora” in December or the new “Prince of Persia” in early 2024.

This is not without risk insofar as other publishers will market flagship titles in the coming months and high inflation could force players to limit their purchases and be very demanding in their choices.