Microsoft Acquires Activision Blizzard

[Choze]

Edited: Was unfocused so tried to focus this.

 

1) The big news recently is that the US is going after Google over ads. https://www.adexchanger.com/platforms/its-happening-the-doj-is-suing-google-for-alleged-monopolistic-ad-tech-practices/

Note the similar language that Google and MS use: https://blog.google/outreach-initiatives/public-policy/doj-ad-tech-lawsuit-response/

Quote

Some examples:

Google’s products expand choice for publishers and advertisers.

Government shouldn’t pick winners and losers in a competitive industry.

DOJ’s lawsuit would reverse years of innovation, harming the broader advertising sector.

 

2) Noticed news articles about claims the EU commission were being manipulated by the US. The details dont quite add up to the processes. MS have been misleading about bargaining with the FTC so this wouldnt be new.

3) The EU will be communicating their issues to MS soon. https://ec.europa.eu/commission/presscorner/detail/en/ip_22_6578

There was an emphasis on the PC/computer market too.

 

Quote

Such foreclosure strategies could reduce competition in the markets for the distribution of consoleand PC video games, leading to higher prices, lower quality and less innovation for console game distributors, which may in turn be passed on to consumers.

Finally, at this stage of the investigation, the Commission has concerns that the proposed acquisition
may reduce competition on the market for PC operating systems. In particular, the Commission is
concerned that Microsoft may reduce the ability of rival providers of PC operating systems to
compete with Microsoft's operating system Windows, by combining Activision Blizzard's games and
Microsoft's distribution of games via cloud game streaming to Windows. This would discourage users
to buy non-Windows PCs.
The preliminary investigation suggests that Microsoft may have the ability, as well as a potential
economic incentive, to engage in such conduct vis-à-vis rival providers of PC operating systems.

Will be interesting to see where they land. Windows already is dominant and they have squeezed MacOS even further as of late despite market share changes. The iGPU in current Mac M chips are also better than the average dGPU in windows laptops.

Worth reminding everyone that gaming is an entertainment industry. Its interesting to see companies like MS talk about entertainment in tech business form e.g. Azure or GamePass.

 

Edited January 27, 2023 by Choze
Focus

[Choze]

The UK CMA also released their findings publicly following Kotick going after Rishi Sunak as presiding over Death Valley instead of Silicon Valley.

https://kotaku.com/activision-bobby-kotick-uk-cma-microsoft-xbox-deal-69-1850085219

Quote

A CMA investigation has provisionally concluded that Microsoft’s proposed acquisition of Activision could result in higher prices, fewer choices, or less innovation for UK gamers.

https://www.gov.uk/government/news/microsoft-activision-deal-could-harm-uk-gamers

Very much in line with the US here. Slightly softer approach with suggesting remedies but I cant be sure, would require time and more reading. 

I havent read much but the pdf's uploaded are very good.

Update: Very juicy stuff in the report!

Edited February 10, 2023 by Choze
update

[Jonnas]

2 hours ago, Choze said:

Kotick going after Rishi Sunak as presiding over Death Valley instead of Silicon Valley

I'm afraid I'm lost on this sentence. I get that the CMA has found the acquisition to be harmful and borderline monopolistic... But what does this part I quoted actually mean?

[Choze]

On 09/02/2023 at 12:02 AM, Jonnas said:

I'm afraid I'm lost on this sentence. I get that the CMA has found the acquisition to be harmful and borderline monopolistic... But what does this part I quoted actually mean?

Sorry here. Rushed posting does this!

https://kotaku.com/activision-bobby-kotick-uk-cma-microsoft-xbox-deal-69-1850085219

The link above will explain. Kotick (Head of Activision Blizzard) is upset that the UK has oppossed the deal in its current form. There are alot of stuff along these lines but that quote stood out. The anti democracy stance does display their anger and is consistent with the other giants.

 

Will be interesting to see how the EU Commission ruling compares!

So far the UK CMA is similar to the US FTC. The CMA further adds 'key games' as too important. In the document we know Call of Duty and World of Warcraft at minmum ('other games' are not named) are too important to buy. Several 3rd parties also contributed but are not named publicly.

Some interesting tidbits on stuff like importance of how purchases are important. Gamepass has its cons (decreased software sales among several issues) in a heavily redacted section. Network effects of a forced COD advantage on xbox. Switch doing very well but not relevant to COD. Plenty else for news websites for the coming month.

Overall it s a superb bit of work from the CMA.

 

Edited February 10, 2023 by Choze
Small fixes

[Dcubed]

And there it is...

 

Sony's gonna have a real tough time arguing that the deal reduces availabilty of COD across gaming platforms now.

[Sheikah]

And there it is...
 
Sony's gonna have a real tough time arguing that the deal reduces availabilty of COD across gaming platforms now.

They can just argue that all it does is delay the outcome they're saying will happen for 10 years. Nothing has changed here - Microsoft have been saying they'd give 10 year access even before they started getting shot down by all the regulators.

[Dcubed]

2 hours ago, Sheikah said:

They can just argue that all it does is delay the outcome they're saying will happen for 10 years. Nothing has changed here - Microsoft have been saying they'd give 10 year access even before they started getting shot down by all the regulators.

This is no longer just cheap talk though, their claim has now been backed up by legally binding action.

Sony can’t argue that MS are just blowing smoke about said 10 year deal anymore.

[Dcubed]

NVidia now have a deal with Microsoft as well, allowing not just COD to appear on Nvidia's Geforce Now streaming service, but ALL Xbox Game Studios titles as well!

As announced in the (currently running) Microsoft European Press Briefing.  Liveblog currently running below via Eurogamer...

https://www.eurogamer.net/live-microsoft-press-briefing-on-activision-blizzard-deal-future

Sony is now the one and only party within the video game industry that currently opposes the Microsoft ABK purchase.

Edited February 21, 2023 by Dcubed

[Sheikah]

This is no longer just cheap talk though, their claim has now been backed up by legally binding action.
Sony can’t argue that MS are just blowing smoke about said 10 year deal anymore.

It just comes across as desperation really, like they know they're doing badly and have to do what they can to convince the regulators otherwise. Nothing has changed, this was always the deal they were offering, I don't think anyone thought it was a false promise.

[Choze]

On 21/02/2023 at 2:28 PM, Dcubed said:

This is no longer just cheap talk though, their claim has now been backed up by legally binding action.

Sony can’t argue that MS are just blowing smoke about said 10 year deal anymore.

What legal action? The MS 'deal' is worse than the Ticketmaster deal (never mind the contradictions and pure irrelevance). The typical actual length of these deals are less than 2 months following a merger.

MS havent begun to answer any of the FTC or CMA concerns. edit: For example the CMA refer to Warcraft as too important for one entity to own and also suggest a Blizzard divesture.

The MS stance is they do not want to be policed in any way shape or form and have created a circus around it. This isnt just about gaming as certain future aqusitions may be off limits or trickier.

 

Edited March 11, 2023 by Choze
clarification

[Choze]

Pretty massive development today at the UK CMA where Console concerns were dropped.

https://www.gov.uk/government/news/cma-narrows-scope-of-concerns-in-microsoft-activision-review

Quote

Having considered the additional evidence provided, we have now provisionally concluded that the merger will not result in a substantial lessening of competition in console gaming services because the cost to Microsoft of withholding Call of Duty from PlayStation would outweigh any gains from taking such action.

The argument is exactly the same as old/current that occurred with Zenimax. No new ground by the CMA. It will pass (Zenimax games wont be exclusive because it does not make economic sense etc.). This means more mergers in the industry are a go too. I expect COD kept away from PS at some point in the next few years if not by change of generation.

Yes this is like the Ticketmaster situation where the agencies look tough and the merger candidates play 'pro consumer' and use the exact same arguments as before. Which to be fair is what most predicted when this was announced.

Keen to see if the FTC will hold their ground as they have a more proactive position e.g. EPIC's fine.

[Dcubed]

It's basically a done deal at this point now.  There's no ground left for the FTC to stand on.

[Choze]

Yep. MS are also clear for EA, Take2 etc. should they wish. This is the best result they could have asked for.

The FTC have too much resistance, even if Biden has said he disregards flawed economic theories and reign in big tech etc. There is absolutely massive lobbying and resistance. edIt: The amount of lobbying by MS for this deal in the EU/UK has been insane for reference.

Just cant picture video gaming being used for setting new precedents.

Edited March 26, 2023 by Choze
clarification

[Dcubed]

WTF!? This is an outrageous decision! Cloud gaming is the sticking point? A near non-existent market that ABK isn’t even contributing towards anyway? Never mind the >100 million Switch owners who stand to benefit from the deal.  This decision literally takes away choice in the Cloud Gaming market because those games aren’t available anyway! And they decide this after rejecting Sony’s concerns about foreclosure in the console market? I can’t even, the logic on display is just so ridiculous!

I can’t see this standing, there’s no way that this decision won’t be fought and eventually overturned.  It’s just insane at this juncture to pin everything on a market that effectively doesn’t even exist!

Edited April 26, 2023 by Dcubed

[Choze]

16 minutes ago, Dcubed said:

WTF!? This is an outrageous decision! Cloud gaming is the sticking point? A near non-existent market that ABK isn’t even contributing towards anyway? Never mind the >100 million Switch owners who stand to benefit from the deal.

I can’t see this standing, there’s no way that this decision won’t be fought and eventually overturned.

Its posts like these that tell me most people have absolutely ZERO clue about competition or innovation. 

On my end, I have contributed to industry reports and academic research. Startups, patent, innovation growth etc. are in their worst recorded states and require the break up of these big tech companies. Regulation / policing is still very soft even with this decision.

At the end of the day these agencies and more need to act. Both right and left support reigning in big tech. The value and societal harm is too high for them not to. Worst of all they are already too  late in many ways.

 

Edited April 26, 2023 by Choze

[Julius]

I don't know nearly enough to contribute to this overall discussion, but it's given me a good chuckle to see the move getting blocked (for now - don't really doubt it'll go through at some point) on what I would say is comparatively one of the smaller sticking points (cloud gaming vs, uh, pretty much every other reason to block a huge deal like this)  and the randomly dropped-in hashtags in that tweet lmao 

Have been keeping up with the posts in this thread though, got to say I appreciate your breakdowns @Choze, great to have some fair and level-headed insight into what a lot of this stuff actually means 

[Ronnie]

Yeah it's good to have some level-headed #insight into this, thanks @Choze

[Dcubed]

7 hours ago, Choze said:

Its posts like these that tell me most people have absolutely ZERO clue about competition or innovation. 

On my end, I have contributed to industry reports and academic research. Startups, patent, innovation growth etc. are in their worst recorded states and require the break up of these big tech companies. Regulation / policing is still very soft even with this decision.

At the end of the day these agencies and more need to act. Both right and left support reigning in big tech. The value and societal harm is too high for them not to. Worst of all they are already too  late in many ways.

 

The decision itself would make sense if it were relating to the console market, where there is actually a legitimate risk of foreclosure.  But they’ve already dismissed Sony’s claims regarding the console market, they’ve already accepted the merger on those grounds.

The part of this decision that makes no sense is the focus on the Cloud Gaming market.  A market segment that barely even exists, let alone has any true relevancy to the British public, and a market segment that ABK has actively refused to even participate in in the first place!  How can you state that the decision protects the availability of ABK’s games when their games aren’t even available to this market segment anyway!? This decision is actually preventing ABK’s games from being made available to the Cloud Gaming segment! It’s actually taking away choice within the UK market!  Never mind the hundreds of millions of other devices and consumers that the merger would actually be bringing ABK’s games to within the console space.

If the CMA had blocked the merger on grounds of foreclosure within the console space, then at least the decision would make some sense.  But here? No, it’s totally nonsensical and utterly baffling.  If they’re really doing this to set an example to Big Tech, they’re going about it in a totally dishonest and disingenuous manner.  Block the merger on grounds of foreclosure in the console space against Sony if you want to set an example, don’t throw baseless flimsy bullshit arguments around regarding the irrelevant Cloud Gaming sector.

This is an entirely politically driven decision where the only real beneficiaries of this decision are the CMA themselves (international political clout) and Sony.

Edited April 26, 2023 by Dcubed

[Sheikah]

Never mind the >100 million Switch owners who stand to benefit from the deal.  This decision literally takes away choice in the Cloud Gaming market because those games aren’t available anyway!

Nintendo were to only receive Call of Duty. Meanwhile we have seen already with Microsoft's acquisition of Bethesda that they are making many previously multiplatform games/series exclusive.

It's certainly interesting that you think this would have been a good thing for gamers. Consolidation of huge companies is a terrible thing for consumers, under no circumstances should anyone be siding with the deal.

[Sheikah]

How can you state that the decision protects the availability of ABK’s games when their games aren’t even available to this market segment anyway!? This decision is actually preventing ABK’s games from being made available to the Cloud Gaming segment!It’s actually taking away choice within the UK market!

It's not though, is it? Nothing is preventing ABK from going the cloud route, or even partnering with Microsoft to bring those games to cloud services. If they choose not to, that's on them.

The CMA's issue was that Microsoft could become extremely dominant in this emerging space if they had this additional content, which is completely justified. Cloud gaming is obviously going to be the future as technology improves and they'd be making a big mistake if they just let Microsoft become too dominant.

[Dcubed]

32 minutes ago, Sheikah said:

It's not though, is it? Nothing is preventing ABK from going the cloud route, or even partnering with Microsoft to bring those games to cloud services. If they choose not to, that's on them.

The CMA's issue was that Microsoft could become extremely dominant in this emerging space if they had this additional content, which is completely justified. Cloud gaming is obviously going to be the future as technology improves and they'd be making a big mistake if they just let Microsoft become too dominant.

Sure.  Just like how 3DTVs were going to be the future.  And how VR was going to be the future.

Cloud Gaming is well over a decade old at this point and it has completely failed to catch fire in that time.  I'm sure that it'll happen any day now though...

42 minutes ago, Sheikah said:

Nintendo were to only receive Call of Duty. Meanwhile we have seen already with Microsoft's acquisition of Bethesda that they are making many previously multiplatform games/series exclusive.

It's certainly interesting that you think this would have been a good thing for gamers. Consolidation of huge companies is a terrible thing for consumers, under no circumstances should anyone be siding with the deal.

COD will ultimately be coming to multiple new platforms (including other Cloud gaming providers such as NVidia, Ubutus and Boosteroid) as a result of the merger; and Sony have been optioned to be included as well.  No matter how you slice it, the merger is ultimately good for the majority of video game consumers and platform holders.  It's only really Sony that stand to lose anything... you know, the big dominant market leader with an inassaliable lead in the "high-end" sector of the market... the one that really needs the help competing... the one who just so happens to be a "Big Tech" company in its own right...

There is nothing logical about this decision.  It's pure politics and protection of Sony's current status quo market position.

Edited April 26, 2023 by Dcubed

[Sheikah]

23 minutes ago, Dcubed said:

Sure.  Just like how 3DTVs were going to be the future.  And how VR was going to be the future.

Are you really going to compare 3DTVs to cloud gaming?

Cloud gaming has continuously improved and will take over once the technology reaches a certain point. It's also dependent on internet connection speeds, which have improved dramatically over the last 10 years, and continue to improve.

Once you can stream games with negligible input lag there will basically be no reason for expensive dedicated hardware boxes anymore. It's inevitable we will reach that point given how technology continues to progress. To return to your point - 3DTVs were a realised technology, it's not like they needed refining. People just didn't care for them. But cloud gaming, when it reaches a technological point where it's sufficiently indistinguishable from regular gaming, will be the superior option.

Quote

COD will ultimately be coming to multiple new platforms (including other Cloud gaming providers such as NVidia, Ubutus and Boosteroid) as a result of the merger; and Sony have been optioned to be included as well.  No matter how you slice it, the merger is ultimately good for the majority of video game consumers and platform holders.  It's only really Sony that stand to lose anything... you know, the big dominant market leader with an inassaliable lead in the "high-end" sector of the market... the one that really needs the help competing...

There is nothing logical about this decision.  It's pure politics and protection of Sony's current status quo market position.

You just ignored the whole point that there are multiple other (non COD) series that Microsoft would acquire that will almost certainly be ringfenced...just as Microsoft have already done with Bethesda content. So this is BAD for gamers. The COD deal is also only 10 years (yes, only; or 1.3 generations). After which they are free to ringfence that too.

Meanwhile if ABK remained unacquired then COD plus other ABK titles would continue to be multiplatform anyway. And to hell with Switch to be honest, it's a garbage console in terms of hardware that nobody actually wanting a good experience would even consider playing COD on. Needs to be said. Microsoft would have absolutely no intention of releasing COD on Switch had they not been trying to make a case about expanding access. So I'd have expected any releases to be serviceable box tickers at best. Many people with a Switch also have another console so it's not like the hundred odd million extra Switch gamers being quoted is even accurate. Many could easily access COD already if they choose to, and let's be honest, if they're into COD they will already be playing it on a PS4/5 or Xbox. Those Switch gamers who have a PS4/5 losing access to COD would not suddenly be happy they can play it instead on Switch.

And as popular as COD is, ABK have a lot of other hugely popular titles that all add up, like Overwatch and Diablo that could have sequels pulled away from multiple consoles including Switch (which OW2 is currently on).

Edited April 26, 2023 by Sheikah

[EEVILMURRAY]

10 hours ago, Sheikah said:

But cloud gaming, when it reaches a technological point where it's sufficiently indistinguishable from regular gaming, will be the superior option.

Only if it is able to run offline. Maybe stored on some sort of portable device you could use on different devices, maybe lend to a friend and play on the go.

Edited April 27, 2023 by EEVILMURRAY

[Sheikah]

Only if it is able to run offline. Maybe stored on some sort of portable device you could use on different devices, maybe lend to a friend and play on the go.

Well that's the thing, the way internet is going, connectivity will eventually not be a problem.

[EEVILMURRAY]

2 hours ago, Sheikah said:

3 hours ago, EEVILMURRAY said:

Only if it is able to run offline. Maybe stored on some sort of portable device you could use on different devices, maybe lend to a friend and play on the go.

Well that's the thing, the way internet is going, connectivity will eventually not be a problem.

Worldwide consistent internet for allow for lag free gaming wherever you go? It may be coming, but I doubt we'll see that kind of stability in our lifetime.