Microsoft buys Activision-Blizzard

CatInABox

Yeah, there's always a risk with these kind of regulatory hoops that any deal could be modified, restricted or outright cancelled. For example, Nvidia's purchase of Arm looks to be off, after regulators, including the FTC, took a real dislike to it for various reasons.

The main reason it failed was Nvidia would have become the dominate force in the chip industry, with the power to make or break companies. I just don't see that kind of hurdle for the MS Activision deal, at least not to the extent that the FTC would stop the deal in its entirety. The franchises that they're buying, while massive, aren't the be all and end all of gaming, and a lot of the concerns around it could be alleviated somewhat easily. MS agreeing to keep the free to play version of COD on other platforms would reduce the concern around antitrust a lot, at least in my opinion.

There's also the fact that MS are looking likely to be a distant second on hardware and software sales in this generation again. Closer for sure, but second none the less. You could have concerns about that going into future generations, particularly with game pass and the move to cloud gaming, but it's not a significant problem.

Still though, MS could be stopped alright. Regulators can often take a dislike to something, and then it's uphill all the way.

So you're saying anti competition is not backed up by laws? Is it down to gut feeling or number of twitter outrages?

But ok let me rephrase, I seriously doubt there is anything anti-competitive with this deal. It is less anti-competitive than Sony buying studios and making all their.games exclusive tocthe point of almost putting xbox out of business. Xbox have had to do these massive deals just to close the gap, they are still behind Sony in revenue even after this deal.

The games will also be available to play anywhere. Xbox, pc, android, iOS and even playststion and Nintendo. It is actually Sony and Nintendo blocking that, not Microssoft.

That's before you even consider this is a public limited company. You cannot just step in and shut down an acquisition in a free and open market like the US just because a bunch of gamers are outraged on twitter. It needs to be backed by legislation and they have a right to defend and appeal. It absolutely needs to be a decision backed up by legislation.

It can also be seen as saving a company in decline and in serious, serious trouble.

Personally I would much prefer if they found a way to bring big studios to game pass without taking them over. But you can't forget they also need to churn out "original content" and they haven't been doing that in over a decade. Xbox is not a massive monopoly sucking up everything in their path. Not yet :-) At the moment they are company that only recently had to make a choice to shut down or to fight back. This is them fighting back. Fight back might not be the right phrase, what they've done is pivot the business to such an extent that Sony are barely even competition anymore. Their new competitors are in cloud and subscriptions. Netflix, Amazon, Google etc

Penn

https://www.boards.ie/discussion/comment/118568973#Comment_118568973

Sorry but trying to claim it as just people moaning on Twitter is incredibly reductive. The main point/effect that will likely be focused on is how much money Sony make (and therefore stand to lose) from losing Call of Duty; pretty much the best selling game year-on-year on Playstation. Saying that it's Sony who would therefore be stopping CoD on Playstation by not allowing Gamepass on its system is like if McDonalds bought the suppliers of KFC's chickens and then tried to claim it wasn't anti-competitive. MS only wants Gamepass on Playstation because in the long run it will financially benefit Microsoft and eat into Sony's profits.

I'm not saying the FTC have a strong enough case to refuse to allow the deal, or if anything will change. But the fact they have announced they're going to be reviewing it means they have some justification for that, and that goes beyond people moaning on Twitter.

https://www.boards.ie/discussion/comment/118569041#Comment_118569041

They're looking into it because its massive, in gaming terms and I'm sure it was brought to their attention by Sony.

If Sony are at risk of being put out of business, then I'm sure something can be done around exclusivity. Exclusivity in the console wars is all Sony, this has come back to bite them. And let's not forget that they hoovered up all the studios and made everything exclusive to the point of pretty much putting xbox out of business. As all xbox gamers will tell you the last gen for xbox was all about what coming and nothing about what's actually available now. That was the extent of Sonys exclusivity, to put xbox out of business. This is their model, they invented the console wars.

Maybe a play it natively on playstation or via the game pass app kind of deal.

Btw, Microsoft don't even report console sales in their earning reports anymore. They are officially no longer in the console business. The revenue is lumped in with their cloud revenue and they report subscription numbers the same as netflix etc.

My point is Xbox is a cloud/streaming business. Sony are blocking them from doing business on their console.

I don't believe the deal can or will be overturned, but I can see wiggle room for some more negotiations. And as a cloud/streaming business that involves a deal including game pass. Or else Sony will have to stfu.

CatInABox

That's a bit simplistic Mr Grumble. Any company, even one that's not the market leader can still abuse their position, and MS saying to Sony "Let us have Gamepass on your console or you lose these games" is actually much worse from a regulatory and anti-trust perspective than MS saying "we're taking these games exclusive straight away". This type of behaviour is what Microsoft got caught and convicted for in the past, bundling Internet Explorer in with windows and basically forcing companies and people to use it.

Again, I actually don't foresee too much of a problem with this deal, particularly if they commit to keeping COD, and maybe Overwatch, as multiplatform. Surprised that Overwatch was Free to Play already, to be honest.

The Raging Bile Duct

Xbox are officially no longer in the console business? That's news to me.

Exclamation Marc

https://www.boards.ie/discussion/comment/118569063#Comment_118569063

The deal absolutely can be overturned and your paranoia/fanboyism about this being a Sony powerplay where they'll need to "stfu" or that it's some squabble over console wars is woefully misguided.

That said, I would be very surprised if the deal wasn't allowed to proceed, but this is driven by the FTC (not a tip off by Sony) and it is wholly untrue to say there is no risk here.

Penn

https://www.boards.ie/discussion/comment/118569421#Comment_118569421

I'm still waiting on Gamestop to get new Series X stock in, so I'm starting to think it might be true....

https://www.boards.ie/discussion/comment/118569459#Comment_118569459

I'm saying they need to have broken the law. FTC does not have the power to overturn mergers and acquisitions based on public opinion.

Thousands of Americans have died fighting communism. A government agency stepping in and interring in free and open business, like China, simply won't happen. Unless some laws have been broken.

Btw, I have an xbox, playststion, pc and Nintendo switch. Please don't patronise me with the fan boyism. But I have to say I do love game pass. If Sony did the same I'd love that too.

Mitch Connor

considering the purchase would still only place Xbox/MS third behind Sony and Tencent, I can't see a reason this would be blocked. if it were, then ANY aquisition by Sony would have to be blocked too. If you can't allow MS to move to third in the gaming sphere by revenue, you can't allow Sony to entrench themselves in second, surely?

Though maybe FTC don't have any remit to question aquisitions by Tencent or Sony.

johnny_ultimate

A government or regulator stopping a merger or acquisition (which they absolutely have the legal right to do and even occasionally enforce - not enough IMO) is not ‘communism’. In fact, it’s a legal power designed to reinforce and protect one of the central conceits of free market capitalism: a competitive marketplace. A massive company using their financial reserves to gain a competitive advantage over others, reduce consumer choice and consolidate the market is precisely the sort of deal a ‘fit for purpose’ antitrust regulator should scrutinise with a fine tooth comb.

Also, China’s current ideology is a form of authoritarian State capitalism, not anything resembling communism. Tencent could not possibly exist under an actual communist government.

Penn

https://www.boards.ie/discussion/comment/118569519#Comment_118569519

But nobody is talking about public opinion, the laws which will be looked at are antitrust laws regarding possible monopolisation or significant damage to a main competitor.

It's due to the size and scale of the deal and the impact it will have in the industry (again, given that COD is regularly the biggest selling game on Playstation and therefore the losses Sony might incur by losing it, unless they agree to have Gamepass on their system).

Communism, public opinion, China... these things have nothing to do with it. They didn't matter with the Zenimax purchase, or any of Sony's purchases. But the Activision-Blizzard one is big enough that they feel the impact from it needs to be investigated before allowing it to proceed.

Right so glad that's cleared up. It's a matter of law. That's all my argument has been. The FTC is not some agency that can step in and interfere in the U.S free market. They can investigate if any laws have been broken.

We know there haven't been any laws broken because we have past experience to go by which is Sony buying up all the studios and making games exclusive.

Xbox are also a lot more open when it comes to other platforms. I'd be very happy if there was some deal where everyone can get along and play the games they want where they want. Xbox and Phil Spencer have been very vocal that is their opinion too, possibly easy to say when you're the one being forced out of business due to exclusivity console wars. But I think even now in a much stronger position they are still very vocal on this. But Sony won't get COD without some give back. And it's all about game pass.

Penn

https://www.boards.ie/discussion/comment/118569540#Comment_118569540

I believe it comes down to the money Sony would lose given that COD sells in such high numbers. With most studio acquisitions, the studios were already mostly making exclusives for that platform, or made new exclusives once they were acquired. Sony buying Naughty Dog or Insomniac wasn't that big a step considering they mostly made PS exclusives anyway, or had a significant history with the company. Even MS buying Zenimax wasn't that big since their multiplatform games sell well, but not hugely. With COD, because it's historically always been on Playstation as well and one of the top selling franchises, the acquisition pulls a significant revenue away from Sony. Coupled with other acquisitions like Zenimax, it starts to show a significant pattern. Whereas again, most of Sony's recent acquistions have been smaller studios who have mostly been PS exclusive studios anyway.

Again, I'm not saying the FTC can or will do anything to stop the deal proceeding, but there are laws under which they feel this particular deal should be investigated.

Exclamation Marc

https://www.boards.ie/discussion/comment/118569519#Comment_118569519

Again you're really not getting it.

It's not about Microsoft breaking a law like driving 50 in a 30, it's a broader regulation around anti-competitive practices.

The FTC is not reviewing this based on public opinion. This is nothing to do with public opinion.

https://www.boards.ie/discussion/comment/118569606#Comment_118569606

Please stop it with the condescending attitude will you. Do you agree the FTC can only enforce the law. Yes or no? Let's just clear this up and move on.

Exclamation Marc

https://www.boards.ie/discussion/comment/118569588#Comment_118569588

What's all this free market nonsense? The FTC is absolutely an agency that can step in and interfere in any transaction if it deems it appropriate.

https://www.boards.ie/discussion/comment/118569626#Comment_118569626

Right, so we do disagree. Completely. What is the free market? Seriously?

But I'm happy to agree to disagree.

Varik

They don't enforce the law, they've a mandate to investigate any anti competitive action or anything that could lead to less competition. They discretion in anything they investigate, and when they do take legal action then it's the judge based on the balance of probabilities. They don't have to have done anything yet that is untoward or illegal.

The Raging Bile Duct

https://www.boards.ie/discussion/comment/118569606#Comment_118569606

You're right, it's nothing to do with public opinion, it's to do with communism!!! George Washington didn't beat Yuri Gargarin at Hamburger Hill just so some commies would stop Xbox being the rightful monopoly they always deserved to be!

John Wayne must be rolling in his grave that some sneaky Jap company is trying to sell good, wholesome American kids filthy, commie games with subliminal messages that trick them into committing hari-kiri.

https://www.boards.ie/discussion/comment/118569669#Comment_118569669

Lads this is getting uncomfortable, I'm not happy with the insinuations here. I'm not sure why you have to bring race into the argument, unless your are directing some sort of accusation in my direction? Which honestly is a big leap.

We've gone from the FTC can do what they like to the FTC can investigate and bring their findings to a court for a judge to decide.

I'm happy with that.

The Raging Bile Duct

I just thought the notion that the FTC investigation in possible breaches of antitrust laws in the Xbox-Blizzard-Activision deal was akin to communism was hilarious.

This thread is gas.

Varik

https://www.boards.ie/discussion/comment/118569669#Comment_118569669

MS can follow Harley's lead when they got the US to add a huge tariff to Japanese bikes due to Honda and then release a new bike named after the 2 nukes dropped on Japan. Simpler times.

CatInABox

Mr Grumble, the FTC can investigate and block any merger if they deem it to a threat to a competitive market. Have a look at the Nvidia/Arm deal I mentioned earlier, Nvidia didn't break any laws regarding the purchase of Arm, but the FTC still blocked it. They blocked it because the resulting company would be too powerful, and could distort the market on a whim.

https://www.boards.ie/discussion/comment/118569809#Comment_118569809

Yeah that would be hilarious if that is what I said. But go ahead, put words in my mouth. Make me out to be a commie, jap hating racist if that's what you need to do to win an argument. Says more about you than it does about me.

Incidentally, you've just agreed with me that the FTC are investigating breach in laws. You've agreed with my argument but refuse to say it directly and instead drag the argument down to commies, japs and trying to make me look like a racist. Which is completely bizarre in the context of the subject.

https://www.boards.ie/discussion/comment/118569924#Comment_118569924

Thanks CatInABox, I'll look into that. I do find it hard to believe that it can be done without any legislation backing it. This is my one and only argument, that it needs to be breaking the law and totally my opinion as I am not a barrister (or lawyer) that I don't think they are breaking any competition laws.

It sounds like there is laws worth investigating as in nvida/Arm, as opposed to they can just do what they like based on their own opinion. But I'll certainly look into it, thanks.

The Raging Bile Duct

https://www.boards.ie/discussion/comment/118570350#Comment_118570350

You're the one that brought up communism which was absolutely daft. I just ran with some exaggerated prose. I wasn't accusing you of being racist or putting words in your mouth - I was poking fun at the hyperbole.

The whole 'Thousands of Americans have died fighting communism' is one of the most ridiculous lines I've seen come up on the gaming forum tbh.

CatInABox

https://www.boards.ie/discussion/comment/118570368#Comment_118570368

To an extent, you are right, in that if the FTC finds that a merger will be negative, they have to go to court to stop it, but if it gets to that point, then the merger is pretty much finished. As to their remit, from the FTC website (I've bolded what I think is the important part here):

The Bureau of Competition is committed to preventing mergers and acquisitions that are likely to reduce competition and lead to higher prices, lower quality goods or services, or less innovation. In most cases, the Bureau receives notice of proposed mergers under the Hart-Scott-Rodino (HSR) Amendments to the Clayton Act. Bureau lawyers, along with economists from the FTC's Bureau of Economics, investigate market dynamics to determine if the proposed merger will harm consumers. When necessary, the FTC may take formal legal action to stop the merger, either in federal court or before an FTC administrative law judge. Below are resources related to the merger review process. The Commission, in cooperation with DOJ, provides guidance to businesses on complying with antitrust laws through the publication of Merger Guidelines and additional policy statements. The Bureau also develops models and guides to streamline the investigative process and reduce the burden of complying with data and document requests, and issues annual reports detailing its enforcement efforts.

And then there's the EU commission as well, which will run their own investigation. They've been even more activist than the US over the last while, but they've also been less successful when it comes to the EU courts, like their Intel fine getting overturned.

As I said though, any problems with this don't seem to be insurmountable.

Exclamation Marc

https://www.boards.ie/discussion/comment/118570350#Comment_118570350

For the last time, there doesn't have to be a de facto breach of law for them to rule against you. Both parties could be law abiding squeaky clean, never even close to rule breaking. But if the merger is anticompetitive and could strangle competition to a degree that the FTC are uncomfortable with, it could be blocked.

There doesn't need to be a law broken. Its not a strict liability driving 50 in a 30 type offence.

To reiterate, I don't think they'll find an issue, nor should they, but its wrong to say there is definitively no risk.

The FTC will opine on the acquisition and give a subjective decision based on what they see and how they interpret it. And if it is blocked, neither party would be deemed to have broken the law.