Microsoft buys Activision-Blizzard

murpho999

Quite a bizarre decision that is bound to be appealed.

"Microsoft already accounts for an estimated 60-70% of global cloud gaming services" is given as the main reason but that high percentage is caused by the likes of Sony not really being in the market and there's nothing stopping them from entering it.

https://www.gov.uk/government/news/microsoft-activision-deal-prevented-to-protect-innovation-and-choice-in-cloud-gaming

No way MS will accept this ruling and I expect it to be appealed, remedied and ultimately go through.

Retr0gamer

https://www.boards.ie/discussion/comment/120522830#Comment_120522830

60-70%? I'm pretty sure PS plus subscriptions aren't being counted properly as that has cloud streaming elements which should be taken into account.

Varik

https://www.boards.ie/discussion/comment/120522830#Comment_120522830

The 60-70% is cloud services for the gaming market in general not just their own streaming game service, that number includes the services they provide to Sony too through azure both for multiplayer for some games distribution and game streaming for the new consoles (not PS3 which Sony host themselves).

Retr0gamer

https://www.boards.ie/discussion/comment/120522900#Comment_120522900

Makes more sense. Amazon would be the biggest competitor there I'm guessing?

murpho999

https://www.boards.ie/discussion/comment/120522867#Comment_120522867

You're thinking about Consoles. PS is not the major player here. It's the issue of MS cloud gaming being more available on PCs and TVs etc.

Either way I think CMAs case is weak as MS have offered deals to Cloud gaming services like Nvidia.

MS and Activision have already said they are appealing and confident so this is by no means over.

I think one of the major problems is that these authorities simply do not understand the gaming industry.

Varik

https://www.boards.ie/discussion/comment/120522933#Comment_120522933

In general Amazon is ahead overall, they're like ~40% with MS at about 25-30% then Google at a distant third.

No clue about gaming in specific those number would be all confidential with only smidges getting released here and there.

It probably is Amazon but only being a gaming middle man through load balancing and through their AWS PrivateLink stuff.

johnny_ultimate

Far beyond any console war stuff, I think the major concern with this deal is a major consolidation of the industry and more power resting with a company that has a long and sordid history of abusing their market power (not necessarily in gaming, mind). I remain glad regulators are actually doing their jobs on this, but only time will tell whether their reasoning will hold up through what'll likely be a long and messy appeals process.

Also curious to see where the EU ends up with a final decision now - they seemed most likely to wave it through and may still do, but you'd imagine both the UK and US regulators moving to block it might tip the scales somewhat.

quokula

https://www.boards.ie/discussion/comment/120523203#Comment_120523203

Exactly, outside of childish playground console war stuff and soap operas that the specialist games press were drumming up, this has always been about one of the biggest consolidations in history being instigated by a corporation with one of the worst monopolistic track records in history, and the impact this would have on consumers and the market in general in the long term over numerous gaming sectors. The regulators are doing exactly what they exist to do and putting the consumer and the public good over corporate interests.

It will be appealed and decisions are yet to be made in some other markets so this will no doubt run for quite a while longer.

Looks like a modest drop in ATVI share price in pre-market trading, but the share price was already well below what Microsoft are offering anyway so the market has priced in the acquisition being blocked for quite some time.

murpho999

https://www.boards.ie/discussion/comment/120523203#Comment_120523203

Sorry wouldn't agree fully with this. Only party being protected by this is Sony despite the CMA saying consoles gaming was not impacted.

I do wonder if the CMA released their statement a few weeks go to cloud their decision that favours Sony.

Also, regulators making judgments because of past errors in other industries should not be a basis for blocking deals.

MS and Phil Spencer have been very transparent in how they will make games available for everyone and the reality is it is Sony who have gone all out to get the deal blocked as they want to protect their anti gamer/consumer policy of exclusive games, blocking studios from going on MS Gamepass etc.

Vicxas

https://www.thejournal.ie/microsoft-activision-blizzard-deal-blocked-6053592-Apr2023/

Another roadblock, but nothing more.

McFly85

https://www.boards.ie/discussion/comment/120523520#Comment_120523520

I think it’s more than a roadblock. Any successful appeal will still reroute back to the CMA for review, so they’d need to prove there are significant errors in the original finding.

It’s a judgement that makes sense to me, especially looking years down the line. Xbox will be in a naturally stronger position to provide cloud gaming solutions due to the infrastructure available in house, so you’d expect a natural bump in market share as these solutions become more prevalent. Having them control a serious amount of huge IP along with that could end up being seen as anti-competitive.

MS have more than enough resources at their disposal to make games anyway.

Retr0gamer

I don't see how having COD or activision gives them an advantage in Cloud gaming. Their cloud business is totally separate to their games business. It's basically just renting out servers. They aren't renting out COD or other activision properties. If they were buying amazon or Google then yes that would be a major issue but this activision deal isn't going to affect the cloud server side of the business.

McFly85

https://www.boards.ie/discussion/comment/120523653#Comment_120523653

Having those games doesn’t directly help their cloud gaming, but the CMA seem convinced that Microsoft as a whole are well set to lead the cloud gaming market through through their Xbox and Windows brands utilising their Azure infrastructure.

So while MS have been arguing a lot on Sonys current dominance successfully, they’ve failed to convince them that MS won’t be an industry leader when cloud gaming becomes more prevalent. So that scenario including the ownership of a huge publisher now would end up unfairly strengthening their position.

recyclops

I wouldnt be surprised if the UK said No just because the EU said Yes

murpho999

https://www.boards.ie/discussion/comment/120523710#Comment_120523710

EU have not released their decision yet.

However, I do think you have a point, UK making a lot of strange decisions lately and this could be another case of British exceptionalism..

johnny_ultimate

FTC in the US is also looking to block it - although that involves a lengthy legal battle - so it's by no means a UK-only thing.

murpho999

Been following this closely and even US commentators agree that the FTC is a basket case with a very weak case and if it goes to court that MS will win.

I wonder with so much money at stake would it be worth their while pulling out of the UK?

We are talking $11b revenue, $1b of which is the UK.

With that money it would even make financial sense to close.down game pass to get the deal through.

Mr Crispy

Cleared by the EU, but still a long way to go before this is resolved.

https://www.videogameschronicle.com/news/the-european-commission-has-cleared-microsofts-acquisition-of-activision-blizzard/?utm_source=onesignal&utm_medium=push

johnny_ultimate

UK: “This will be bad for cloud gaming”

EU: “This will be great for cloud gaming”

🤷🏻‍♂️

murpho999

Good decision by the EU.

Curious to see what happens with the CMA now as they're going to become very isolated for their ridiculous ruling.

sniper_samurai

https://www.boards.ie/discussion/comment/120600117#Comment_120600117

They seem to be doubling down as they put additional restrictions on the merger last week.

https://www.bbc.com/news/technology-65557230

murpho999

https://www.boards.ie/discussion/comment/120600145#Comment_120600145

Yes saw that

I thnk the CMA will cave quicker than expetced. Even Rishi Sunak is applying some pressure.

https://gameranx.com/updates/id/465795/article/uk-pm-rishi-sunak-will-strategically-steer-the-cma-to-not-get-in-the-way/

The CMA will become isolated as the deal is approved all over the world. The FTC case in the USA has no legal standing and legal experts say it has no chance.

The deal will close just a question of when.

Mitch Connor

https://www.boards.ie/discussion/comment/120600096#Comment_120600096

Well the EU are basically saying the merger can go ahead as long as MS puts ZERO restrictions on its titles being available for other streaming platforms?

• A free license to consumers in the EEA that would allow them to stream, via any cloud game streaming services of their choice, all current and future Activision Blizzard PC and console games for which they have a license.
• A corresponding free license to cloud game streaming service providers to allow EEA-based gamers to stream any Activision Blizzard’s PC and console games.

Maybe I need someone smarter than me to explain this, but it seems bad for MS? If Sony have a cloud offering, then all AB games have to be available on it? So they have to make CoD, WoW etc available for it? Same goes for any other cloud service? Obviously MS would get money from sales, but seems like a lot to give up.

Or could they, should they wish, only provide CoD on Playstation via Cloud, and not download/physical?

awec

https://www.boards.ie/discussion/comment/120600235#Comment_120600235

It's just saying they have to license the games to competitive services, but it doesn't mean they can't create Game Pass exclusive content or timed exclusives.

quokula

https://www.boards.ie/discussion/comment/120600235#Comment_120600235

Precedent suggests that that they'll just renege on any commitments they've made once the deal is through and pay the fine, which will be small fries in the context of the value of the merger.

murpho999

https://www.boards.ie/discussion/comment/120600265#Comment_120600265

MS have been more than clear and already signed deals with competition that games will be available on their platforms for next 10 years.

This includes Nintendo who will now be able to offer Call of Duty to their gamers for the first time.

Same offer also made to Sony but they've refused as they want to block the deal for their own reasons.

It would not be in their interest to renege on the deal as the more people who play their games then the more money they will make.

Xbox is not trying to sell more consoles but get more people playing their games and also subscribing to Game Pass.

The issues being raised by EU and CMA is all to do with cloud gaming which at present very small but expected to grow and I find it strange that CMA are blocking deal as they don't know what happens in the future.

sniper_samurai

The CMA have issued a response to the EUs approval to the deal.

https://twitter.com/CMAgovUK/status/1658131200181952516?t=0kyIzaYv6LefOpXOLRM8Fg&s=19

https://twitter.com/CMAgovUK/status/1658131203000614916?t=YjOd_hWyfoaqGOHd4PZXdQ&s=19

https://twitter.com/CMAgovUK/status/1658131206007844867?t=-4FDi3njdaSZ2NjwFek5jw&s=19

https://twitter.com/CMAgovUK/status/1658131209057189889?t=rEhVNIrAgXAQIyhzr4B6-A&s=19

https://twitter.com/CMAgovUK/status/1658131211967971328?t=H6hebXOaWHbRyVFjBlsxUg&s=19

murpho999

https://www.boards.ie/discussion/comment/120600538#Comment_120600538

Wow. The CMA hurt by EU decision and instead of reflecting and admit they might be wrong they just to try to justify their crazy deciision.

All authorities agree that console market will not be affected by this deal. Console market worth billions.

CMA raises issues with cloud gaming which is tiny market and decide that Xbox is no 1 and will control it. They seem to be confusing Cloud Gaming and MS Game Pass which are two separate services with cloud gaming offered as bonus to gamepass subscribers. People are not really subscribing to Gamepass to get Cloud gaming.

The CMA decision is actually bad from games as it's denying games access to more games at a better price and is just unjustifiable in my opinion.

CatInABox

Have been following what's going on in the UK, and I'm quite surprised that there has been political movement on the merger. I thought for sure that the UK government would just ignore what MS were saying, but that hasn't been the case. The PM over there has begun the process of providing a strategic steer to "not get in the way" for the CMA, and Jeremy Hunt, the finance minister, has written an article saying that the CMA should prioritise growth.

Whichever lobbyists MS are paying are certainly doing their job.

Also, anytime I mention Jeremy Hunt, I'm also obliged to show this:

https://www.youtube.com/watch?v=uO1jETFBiMw