The European Commission is re-evaluating its approval of Microsoft's acquisition of Activision Blizzard following alterations in cloud gaming distribution agreements.

 This re-evaluation was triggered when Microsoft announced plans to transfer cloud gaming rights to Ubisoft. As a result, Ubisoft is required to negotiate licensing agreements outside the United Kingdom, drawing the scrutiny of European regulators. Arianna Podesta, representing the European Commission, commented, "The Commission is determining if UK developments require further notification."

Previously, Microsoft had committed to licensing Activision Blizzard games to rival xCloud cloud services in the European Union. However, the recent shift in their approach, especially involving Ubisoft in the acquisition, has raised questions. Ubisoft, holding license rights from Activision Blizzard, has the authority to grant licenses outside the European Union. While no changes are expected within Europe, Ubisoft will manage access to Activision and Blizzard games in cloud settings in other regions, including the United States and Japan. Furthermore, Microsoft will also require licenses to host titles on its xCloud service.

In the UK, Microsoft's proposal has initiated a "Phase 1 investigation", viewed as a continuation of its Activision Blizzard acquisition process. Should the European Union decide to undergo further assessment, it might add to the already lengthy merger storyline, which has been ongoing for over a year.