French video game titan Ubisoft Entertainment (OTC:UBSFF, EPA:UBI) added more than 10% on the Paris stock market after the Assassins Creed and Far Cry developer made an unexpected appearance in Microsoft Corporation (NASDAQ:MSFT)’s revised bid to buy Activision Blizzard Inc (NASDAQ:NASDAQ:ATVI).
Under Microsoft's revised pitch, cloud rights for existing Activision titles across consoles and PCs will be palmed off to Ubisoft.
The proposal covers all existing Activision games and future games for the next 15 years (presumably including all future Call of Duty titles).
“The transaction is intended to provide an independent third-party content supplier, Ubisoft, with the ability to supply Activision’s gaming content to all cloud gaming service providers (including to Microsoft itself),” read the proposal.
Ubisoft will also be able to licens e Activision’s content under different business models, including subscription services.
Furthermore, Ubisoft would have the ability to require Microsoft to provide versions of games on operating systems other than Windows.
There is one exception to the proposal in that it does not cover the European Economic Area.
What is cloud gaming?
Cloud gaming, otherwise known as Gaming-as-a-Service, theoretically lets gamers play gaming content hosted on a remote server, a bit like the enterprise-level Software-as-a-Service (SaaS) model pioneered by Salesforce.
In reality, cloud gaming has been plagued by latency issues that have made the user experience less than ideal.
Cloud gaming is an infantile market with few active users.
Google’s attempt to expand the market collapsed in January 2023 when its cloud-gaming service Stadia shut down for lack of interest.
Cloud gaming’s estimated market size ranges from US$1bn to US$3.4bn; a mere speck on the US$250 billion-plus total gaming market by any estimation.
However, though cloud gaming remains unviable for now, the rollout of faster broadband infrastructure and 6G may widen streaming bottlenecks down the line.