Microsoft is strategically signing cloud gaming deals to help win over regulators concerned about its proposed Activision Blizzard acquisition.
Microsoft has signed a fourth deal for Call of Duty access with Ubitus, a white-label cloud gaming service that has helped many publishers stream their games to Nintendo Switch. This latest deal comes just a day after Microsoft signed a similar 10-year deal with Boosteroid to bring Xbox PC games and Activision Blizzard titles like Call of Duty to the cloud gaming service.
Ubitus, a Taiwan-based cloud gaming provider, has been quietly using its technology to bring big games to the Nintendo Switch and elsewhere over the past decade. The supernatural thriller Control arrived on the Nintendo Switch in 2020 thanks to Ubitus, and both Assassin’s Creed Odyssey and Resident Evil 7 run on Ubitus’ cloud gaming streaming technology.
Both of Microsoft’s new deals with Boosteroid and Ubitus will rest on whether its proposed Activision acquisition is approved by regulators. They also come weeks after Microsoft struck similar deals with Nvidia and Nintendo in a clear effort to win over regulators.
Microsoft’s latest cloud gaming deals also attempt to directly address the concerns of the UK’s Competition and Markets Authority (CMA) around “lesser-known providers” potentially being impacted by Microsoft’s control of Activision Blizzard games for cloud gaming services. The CMA specifically calls out Boosteroid, Utomik, Blacknut, Gamestream, and Wiztivi.
The CMA published provisional findings last month, noting that the deal “could result in higher prices, fewer choices, or less innovation for UK gamers.” The CMA has offered up possible remedies that include Microsoft being forced to sell off Activision Blizzard’s business associated with Call of Duty.
The timing of these two deals is very strategic for Microsoft, as it has to spend the next few weeks trying to convince the CMA and European Commission that its $68.7 billion deal for Activision Blizzard should be approved. The European Commission has until April 25th to decide on Microsoft’s proposed acquisition, and the UK’s CMA has set a deadline of April 26th. Microsoft is now hoping these deals with smaller cloud streaming providers will help ease competition concerns.
“If the only argument is that Microsoft is going to withhold Call of Duty from other platforms, and we’ve now entered into contracts that are going to bring this to many more devices and many more platforms, that is a pretty hard case to make to a court,” said Microsoft president Brad Smith in an interview with The Wall Street Journal yesterday.
Microsoft has offered Sony a similar 10-year deal for Call of Duty, but the PlayStation maker has refused to sign. Smith told The Wall Street Journal that Microsoft isn’t currently in discussions with Sony over its offer.
“Microsoft has not shown any real commitment to reaching a negotiated outcome,” said Sony in a filing with the CMA earlier this month. “They have dragged their feet, engaged only when they sensed the regulatory outlook was darkening, and favored negotiating in the media over engaging with SIE.”
Jim Ryan, Sony’s PlayStation chief, also reportedly made it clear the company wasn’t interested in a deal with Microsoft. “I don’t want a new Call of Duty deal. I just want to block your merger,” said Ryan on February 21st (the day of EU meetings), according to Activision executive Lulu Cheng Meservey.
While the European Commission and CMA spend the next few weeks considering Microsoft’s proposed Activision Blizzard acquisition, Microsoft says more deals are on the way soon. “More will follow,” said Smith in an interview with the Journal.