Just about a year ago, Microsoft closed its acquisition of Acitivision/Blizzard. However, in order to get the deal past the UK’s Consumer Market Authority (CMA), it was forced to divest the cloud gaming rights to all past and future (for up to 10 years) Activision titles to Ubisoft.
Ubisoft was originally promising to bring these titles to its Ubisoft+ subscription (apparently just via the cloud?), but that has yet to materialize. However, they have been testing their own first-party cloud streaming offering. So, perhaps Activision games will join Ubisoft+ when this fully launches.
Microsoft has been able to allow services like GeForce NOW, Boosteroid and others to deploy Activision games in the cloud. However, it has only delivered a single game from the acquisition via Xcloud (Crash Bandicoot N. Sane Trilogy) – even as other games like Diablo IV and COD have joined Game Pass.
What Was the Value of the Ubisoft Activision Streaming Rights Deal?
The exact cost of this sale was never published, but from Ubisoft’s own quarterly investor calls (Pro Tip: you can read the transcripts for free on the Quartr app), we now know it was between €50M and €100M – well less than 1% of the overall purchase price. That’s quite a deal they received if you ask us…
From Q2 23/24 conference call (Oct. 26, 2023)
On the Microsoft, so we — as you know, we don’t provide detail on the transaction. But yes, it’s ahead of EUR 50 million. We are very confident that it will be a very profitable transaction.
Frederick Duguet – Ubisoft CFO
From Q4 23/24 conference call (May 15, 2024)
What we can say relative to the non-exclusive licensing of the streaming rights that the revenue came in at a higher level than the initial purchase price, which we said had been comprised between EUR 50 million and EUR 100 million. So, we (are) happy to already secure a strong return on investment.
Frederick Duguet – Ubisoft CFO
This makes two things clear. First: the cost of acquiring the ABK streaming rights was between €50M and €100M. Secondly, they have already made back the initial purchase price through licensing (as of May, 2024).
Where/how did they make that money from licensing? We don’t know for sure. But, it seems likely to us that this was via a (non-exclusive) licensing deal back to Microsoft to allow the games to be available on GeForce NOW and Boosteroid as described above. We know from previous remarks made by NVIDIA and Boosteroid that Microsoft, itself, would be covering any costs associated with the commitments that they made to these companies around cloud gaming.
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