Microsoft and publishers are changing the game

Xbox Game Pass: Status after Microsoft’s Big Deal with Activision and Implications for Cloud-Based Games and the Internet of Things

The FTC does not have a preliminary injunction, so Microsoft is in a position to close the acquisition by the deadline. The closing of the acquisition will bring an end to the lengthy process of regulatory approvals and battles that began 20 months ago.

The Xbox maker originally announced the deal in January 2022, and has faced close scrutiny from regulators ever since — including an FTC v. Microsoft case that revealed plenty of Xbox secrets. There is a decision from the Ninth Circuit Court of Appeals due in December on the Federal Trade Commission’s failure to get a preliminary injunction against Microsoft.

It’s also legally possible for Ubisoft to offer Activision Blizzard games exclusively on certain cloud providers but, again, very unlikely. I think it’s unlikely because everyone knows that the rights to games are not secret and if the company tried to deny games from certain cloud services, it would face a backlash. Cloud providers can still give them a free licenses to stream games in EU markets, thanks to the European Commission remedy.

Microsoft will now add more than nine game studios from the Blizzard side alone to its Xbox Game Studios, alongside games studios in more than 11 locations for the mobile gaming King side of the acquisition. Microsoft has also transformed into a publishing powerhouse after the acquisition, with more than 8,500 Activision employees now joining Microsoft.

The $27 billion purchase is the largest ever paid by Microsoft and surpasses the acquisition it paid in 2016 to buy professional networking site LinkedIn. This is Microsoft’s biggest-ever push into gaming, too, and the company said at the original announcement of this megadeal that it will now be the “third-largest gaming company by revenue, behind Tencent and Sony.”

Modern Warfare 3 won’t be on the Xbox Game Pass this year, though, after being made clear earlier this week. Microsoft hasn’t provided an update on Xbox Game Pass subscription numbers since announcing 25 million subscribers alongside the original Activision Blizzard deal announcement in January 2022.

Bobby Kotick said in his statement to employees that they look forward to bringing joy and connection to even more players around the world.

Thanks to everyone who helped, this acquisition is possible. We were not able to do this without your dedication.

I will be visiting all of the offices of the gaming team over the next few weeks. We’ll have the opportunity to welcome our new colleagues at our next virtual all-hands for Xbox employees, and for the greater Microsoft community, we’ll discuss this and more in the November 8 session of the Company Strategy Series.

We had been active in the space for a long time and Microsoft came to us because we were the first studio to work with Stadia, the first company that Amazon worked with for Luna, and we were partners with NVIDIA. “To Microsoft, it made sense that if somebody was going to be familiar with the space and know what the value would be for streaming, it would be us. And we saw the value as well.”

The deal with Ubisoft means that Activision Blizzard games will now be available on Ubisoft Plus, the company’s game subscription service. Work begins on bringing these games to Ubisoft’s subscription today, but it’s not clear when they’ll all be available.

While the deal lasts for 15 years, the licenses are perpetual, so Ubisoft will still have the rights and still be able to provide games to people and companies worldwide (outside of the EEA) even after those 15 years pass by.

“Our expectation is that they will be on Ubisoft Plus, and then we have the rights to be able to license them individually to companies as well,” says Early. “Maybe there is a company somewhere in the world that would want to license those rights and add to the streaming service they already have or start up a new streaming service and that’s going be part of the fun of the next 15 years or more of how streaming evolves.”