Microsoft Microsoft/Activision Blizzard Acquisition - Information Thread, update: The Deal Has Closed

[SuperSpreader]

hahahahaha

[Keyser_Soze]

[Spawn_of_Apathy]

Gotta keep up appearances while they go through appeals in the UK, still have to convince the EU, and fight the FTC. 

[Bacon]

It's not that I want MS to obtain Activblizz, but that I want Sony to get bent.

[crispy4000]

29 minutes ago, Bacon said:

It's not that I want MS to obtain Activblizz, but that I want Sony to get bent.

 

It'd be better for them to be challenged again like in the 360 era.  But not like this.  I think Bethesda was already too big of a grab as it was.  The best thing about this deal getting blocked, or even just hitting this many roadblocks, is that big tech has to think twice about large gaming acquisitions now.

 

Hopefully this means the acquisition war will cool a little bit, and buying smaller studios and start-ups takes priority.

[Commissar SFLUFAN]

13 minutes ago, crispy4000 said:

The best thing about this deal getting blocked, or even just hitting this many roadblocks, is that big tech has to think twice about large gaming acquisitions now.

 

From the analysis and interpretation of the CMA's decision, Big Tech has to think twice about ANY large acquisitions now.  MS is going to fight hard on this one because the potential scope goes far beyond the gaming aspects of the cloud.  If this was merely about the ABK acquisition, I'd fairly certain that MS would just pay the $2.5 billion breakup fee and walk away.  However, it's now well beyond merely the acquisition of ABK itself and into the realm of threatening MS's expansion potential within its most lucrative revenue-generating segment.

 

(Not that I have an objection to this either!)

[crispy4000]

1 hour ago, Commissar SFLUFAN said:

 

From the analysis and interpretation of the CMA's decision, Big Tech has to think twice about ANY large acquisitions now.  MS is going to fight hard on this one because the potential scope goes far beyond the gaming aspects of the cloud.  If this was merely about the ABK acquisition, I'd fairly certain that MS would just pay the $2.5 billion breakup fee and walk away.  However, it's now well beyond merely the acquisition of ABK itself and into the realm of threatening MS's expansion potential within its most lucrative revenue-generating segment.

 

(Not that I have an objection to this either!)

 

The scope of this decision potentially goes bigger, yes, but Microsoft's primary motivation here is still their $70 billion power grab.  Not preserving the rest of their (well-established) business opportunities, or fighting the good fight for the tech sector as a whole.  They just want big tech to believe that this is their fight too.

 

And if we're just talking cloud in general, not gaming, there's much more competition in the space elsewhere.  I can't even remember the last time I used Word or Excel proper.

 

Even a company like Facebook shouldn’t be that worried.  They rebranded their entire company to focus on an emerging market and still won’t be able to monopolize it.  I think that’s the difference with Microsoft’s position here as both a gaming and cloud computing power player.

[Spawn_of_Apathy]

2 hours ago, crispy4000 said:

 

It'd be better for them to be challenged again like in the 360 era.  But not like this.  I think Bethesda was already too big of a grab as it was.  The best thing about this deal getting blocked, or even just hitting this many roadblocks, is that big tech has to think twice about large gaming acquisitions now.

 

Hopefully this means the acquisition war will cool a little bit, and buying smaller studios and start-ups takes priority.

Im still skeptical this still isn’t all about COD. So any other huge mergers and purchase attempts that don’t involve COD would still go through with far less hassle than this. 

[Commissar SFLUFAN]

2 hours ago, crispy4000 said:

I think that’s the difference with Microsoft’s position here as both a gaming and cloud computing power player.

 

That's practically the entire thrust of the CMA's argument which is largely based on a theoretical assumption of future MS dominance if/when cloud gaming becomes a significant market.

 

The CMA and Microsoft agree on one thing: the cloud gaming market is what matters | Opinion

WWW.GAMESINDUSTRY.BIZ

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Sign up for the GI Daily here to get the biggest news straight to your inbox In the end, it wasn't really about Call of…

 

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In the end, it wasn't really about Call of Duty. It wasn't even really about PlayStation, no matter how much some people want to try to spin this as a console war narrative.

 

The biggest setback to Microsoft's bid to buy Activision Blizzard – a setback that could quite possibly sink the deal entirely – came largely from an interpretation of Microsoft's own beliefs and logic.

 

 

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However, it's not five years ago, nor ten, and this isn't the landscape in which this deal is being proposed. Cloud gaming is being touted as the industry's technological future, most of all by Microsoft itself – and arguably much more importantly, game subscription services like Game Pass are positioning themselves to be the industry's business model future, in line with how subscription services have become the default business model for every other form of media that has shifted to a cloud-based system.

 

This remains a sector in its infancy, but Microsoft is by far the dominant player in the market thus far; and the sector overall is quite divorced from the console market in which Microsoft plays third fiddle, since the whole selling point of cloud streaming is that it's device-agnostic and doesn't require dedicated gaming hardware.

 

This is the nascent market the CMA's ruling seeks to protect, arguing that Microsoft being able to further cement its dominance by locking up the properties belonging to one of the industry's largest publishers would not only extend its market lead to the point of being potentially unassailable, it would also give Microsoft far too much power to set the terms for any other entrants into cloud gaming.

 

 

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That's the core argument – though I think it's fair to say that everything around it has been muddied and confused quite badly, in part due to a somewhat injudicious use of words by the CMA, which seems to use the term "cloud gaming" to encompass both the actual technology of delivering games over cloud streaming, and the rising importance of subscription business models as a consequence of cloud gaming's adoption.

 

I understand the reason for grouping these concepts together – business models are path dependent on the underlying technology to a large extent, and subscription services are a much neater fit for cloud streaming than any effort to shoehorn a buy-to-own model into a technology paradigm where ownership doesn't intrinsically mean anything. Still, conflating subscription and cloud issues as if cloud streaming is the actual problem, and not merely the technological underpinning for the subscription business models that will define this nascent market, has created a lot of confusion.

 

Microsoft was arguably quite smart to try to capitalise on that confusion by proposing remedies that address the cloud streaming aspect, while pointedly ignoring the subscription aspect. I do say arguably; there's another perspective which argues that wilfully misunderstanding the points the CMA is making, and making a public song and dance about remedies which deliberately ignored the CMA's concerns, may have simply fuelled the regulator's distrust of the company.

 

 

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Is it reasonable, though, to argue that letting this deal go through would have distorted the emerging cloud gaming/subscription gaming markets so badly that competition and innovation would have been damaged? After all, Sony's strength in the console market should give it an advantage in the streaming and subscription world too – why shouldn't the same logic apply to both markets?

 

There are good arguments in both directions (and any appeal may hinge on pretty much that question), but once again, it feels like Microsoft's own statements and actions created a catch-22 here. If anyone believes that Activision Blizzard's portfolio is sufficiently important to create a significant distorting effect in this market, it's the company offering to pay the GDP of a small European nation to buy it.

 

 

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But Microsoft would never have offered to pay this much money just to be more effective at competing in the console market; it believes that cloud streaming and subscription services are the future. Consequently, the CMA looked at Game Pass and PlayStation Plus, it looked at the way that every other media market is being carved up by a handful of giant subscription services (Apple and Spotify for music; Netflix, Disney, Amazon, and some also-rans in video; Amazon effectively as a monopoly in books), and it ruled on the basis that this is the market that actually matters.

 

For all Microsoft's angry bluster in response, it's hard to deny that on this core issue, it's in perfect agreement with the CMA.

 

 

[crispy4000]

29 minutes ago, Spawn_of_Apathy said:

Im still skeptical this still isn’t all about COD. So any other huge mergers and purchase attempts that don’t involve COD would still go through with far less hassle than this. 

 

You are correct.  It is about CoD.  More specifically, what it can be leveraged for outside of the traditional console market.

 

I’ll add that if CoD franchise as a whole was F2P, this may have an easier sell to the CMA.

 

Quote

Article: “After all, Sony's strength in the console market should give it an advantage in the streaming and subscription world too – why shouldn't the same logic apply to both markets?“

 

Because they’d have to get in cahoots with an Amazon, Google or Microsoft themselves to do it.

[Jason]

Despite UK ruling, Microsoft/Activision merger might not be dead just yet

ARSTECHNICA.COM

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Appeals could take months, but a carveout could preserve the deal outside the UK.

 

[Spawn_of_Apathy]

7 minutes ago, crispy4000 said:

You are correct.  It is about CoD.  More specifically, what it can be leveraged for outside of the traditional console market.

And this is why I’m skeptical this decision by the CMA would put any other tech company on notice, because COD won’t be a part of every buyout or merger that makes it before them. 
 

I want to believe some of these regulating bodies are suddenly trying to stop consolidation that would hurt competition and consumers, but all this just seems to have always been about “MS can’t control COD” and nothing more. As if MS could buy every other currently non-exclusive franchise and the CMA and other regulatory bodies wouldn’t care, because they’re not COD. I dunno, maybe they’d care about Fortnight. But basically they’re not concerned with how many and how much MS buys. Just very specific, cherry picked franchises they’re not allowed to own. 
 

and so it doesn’t speak to any standard of protection in the gaming industry or any industry. We’re still on a course where the majority of products and services can be controlled by just a few corporations. 

[crispy4000]

Fortnite wouldn’t be so much of the same issue unless they started bundling Battle Passes with Games Pass.

 

I could see EA or 2K drawing similar scrutiny though.  Sports and GTA day one.

[Commissar SFLUFAN]

Ukraine’s competition regulator has cleared Microsoft’s acquisition of Activision | VGC

WWW.VIDEOGAMESCHRONICLE.COM

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It joins Saudi Arabia, Brazil, Serbia, Chile, Japan and South Africa in approving the deal…

 

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Microsoft‘s proposed acquisition of Activision Blizzard has been approved by Ukraine’s Antimonopoly Committee.

 

In a statement released on Thursday, the regulator said it wasn’t concerned that the $69 billion deal might lead to a substantial lessening of competition in any relevant markets.

 

The controversial acquisition has also been approved in Saudi Arabia, Brazil, Serbia, Chile, Japan and South Africa.

 

 

[Commissar SFLUFAN]

The EU just approved the deal.

[Bacon]

1 minute ago, Commissar SFLUFAN said:

The EU just approved the deal.

[Commissar SFLUFAN]

From the EU:

 

[Dodger]

CMA issued a statement bitching about it, so MS will still have to fight that, but I imagine this is going to close and they'll just find some sort of work around for the UK if they have to.  

[Brian]

UK’s regulator says EU is wrong to approve Microsoft’s Activision deal | VGC

T.CO

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The CMA claims it "stands by its decision" after the EU Commission took an opposing view…

Is it common for boards like this to respond? 

[Keyser_Soze]

We are right. You will see in ten years when cloud gaming is the dominant gaming platform!

[Guest]

I continue to say, the UK isn’t tanking this deal, unfortunately. I would love nothing more for it to get shut down 😂

[Commissar SFLUFAN]

29 minutes ago, Brian said:

UK’s regulator says EU is wrong to approve Microsoft’s Activision deal | VGC

T.CO

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The CMA claims it "stands by its decision" after the EU Commission took an opposing view…

Is it common for boards like this to respond? 

 

It really isn't at all from what I've gathered.

[XxEvil AshxX]

2 hours ago, Commissar SFLUFAN said:

From the EU:

 

"Free license access?" 

 

What does that mean? It can't mean that any service provider would have access to host the game without paying for it? 

[Spawn_of_Apathy]

2 hours ago, Commissar SFLUFAN said:

From the EU:

 

Super Mario Bros is an Activision Blizzard game now? 

[crispy4000]

38 minutes ago, XxEvil AshxX said:

"Free license access?" 

 

What does that mean? It can't mean that any service provider would have access to host the game without paying for it? 

 

The EU wants all Activision Blizzard games to be playable on any cloud service, so long as you've paid for the games or have a subscription they're part of.

 

Sounds like a logistical nightmare.  Also, it only holds for 10 years.

[crispy4000]

Quote

"Microsoft would have no incentive to refuse to distribute Activision's games to Sony, which is the leading distributor of console games worldwide, including in the European Economic Area ('EEA') where there are four Sony PlayStation consoles for every Microsoft Xbox console bought by gamers. Indeed, Microsoft would have strong incentives to continue distributing Activision's games via a device as popular as Sony's PlayStation."

 

They'd have less incentive to refuse to distribute CoD on Playstation.  But anything smaller than that, like say, an Elder Scrolls sized property, should be taken with a heaping spoonful of salt.

[AbsolutSurgen]

The problem is that with that same logic they should have the same incentive to distribute Xbox Studios games on Playstation.  Yet, they do not.

[Commissar SFLUFAN]

The EU reached substantially the same conclusion about the potential "significant lessening of competition" (SLC) impact of this transaction on cloud gaming as the UK CMA.

 

The key difference is that the EU is willing to accept the proposed behavioral remedies while the CMA is not.

[Ghost_MH]

2 hours ago, crispy4000 said:

The EU wants all Activision Blizzard games to be playable on any cloud service, so long as you've paid for the games or have a subscription they're part of.

 

Sounds like a logistical nightmare.  Also, it only holds for 10 years.

 

It really should work this way, anyway. They don't want Microsoft to be able to sell a digital version of a game here and then force consumers to repurchase the game on another digital platform. It's highway robbery a digital game you bought on the Wii U would need to be bought again if you wanted to play in the Switch. I've lost track of how many copies of Bayonetta I technically own, even if I only have access to like 2 of them at the moment.

 

However, movies don't even work like this, even after a failed attempt by the industry to make it work. The movie industry's fault was tying the sale of those digital tokens to physical media. That and janky support.

[crispy4000]

22 minutes ago, Ghost_MH said:

It really should work this way, anyway. They don't want Microsoft to be able to sell a digital version of a game here and then force consumers to repurchase the game on another digital platform. It's highway robbery a digital game you bought on the Wii U would need to be bought again if you wanted to play in the Switch. I've lost track of how many copies of Bayonetta I technically own, even if I only have access to like 2 of them at the moment.

 

This isn't really about who buys the game.  Its about no cloud outlet being able to compete with Microsoft's cloud gaming subscription, which baseline, comes with the latest Call of Duty at no extra cost.

 

But to your point on the Wii U, we won't be seeing cross-manufactuer game licenses sold until the big 3 willingly give up on their royalties.  Cross-gen purchases move an inch closer to that, but that's all.  An inch.

[Ghost_MH]

2 minutes ago, crispy4000 said:

This isn't really about who buys the game.  Its about no cloud outlet being able to compete with Microsoft's cloud gaming subscription, which baseline, comes with the latest Call of Duty at no extra cost.

 

I get what you're saying. I mean, Microsoft would be paying salaries and all development costs for these games. It's not exactly free to add these very expensive to make games to Live for free.

[crispy4000]

7 minutes ago, Ghost_MH said:

 

I get what you're saying. I mean, Microsoft would be paying salaries and all development costs for these games. It's not exactly free to add these very expensive to make games to Live for free.

 

They'll still get their money.  EU is just saying you should be able to buy CoD on PS5 and play it on a cloud service too.  For the next 10 years.

 

It's a pretty half baked way to fix the problem, if cloud gaming really is a category worth protecting competition in.  Because of Games Pass.

Who would honestly sub to GP and decide to play CoD on Boosteroid instead of xCloud?

[Guest]

23 hours ago, Ghost_MH said:

However, movies don't even work like this, even after a failed attempt by the industry to make it work. The movie industry's fault was tying the sale of those digital tokens to physical media. That and janky support.

Movies Anywhere does a pretty solid job of making your digital purchases work across sales platforms. No reason gaming couldn’t implement similar. I would be more likely to purchase games with such a system in place. Part of what has kept me on the Xbox platform is the portability of purchases across generations. MS pretty much nailed it

[Ghost_MH]

22 minutes ago, sblfilms said:

Movies Anywhere does a pretty solid job of making your digital purchases work across sales platforms. No reason gaming couldn’t implement similar. I would be more likely to purchase games with such a system in place. Part of what has kept me on the Xbox platform is the portability of purchases across generations. MS pretty much nailed it

 

Does it actually work well now? Support used to be so janky.

[Spork3245]

26 minutes ago, Ghost_MH said:

 

Does it actually work well now? Support used to be so janky.

I never had a problem with it. You just connect all your accounts on the website/app.