Microsoft buys Activision-Blizzard

CatInABox

https://www.boards.ie/discussion/comment/120779290#Comment_120779290

As predicted by everyone. Every time something else leaks, I heard the Xbox "World Premiere" sound.

So far, we've had the new Indy game is exclusive, we've had a good long look at all of MS acquisition targets (since redacted), today we've seen Sony fail to redact properly and leak loads of confidential info on dev costs, etc. There's been a few other as well.

A total mess, and I love it.

Exclamation Marc

The Canada Competition Bureau are now weighing in.

From GameDeveloper:

Prior to its current trial against the FTC, a Microsoft memorandum claimed "every single worldwide regulator" (excluding the FTC and the CMA) has approved its merger with the Call of Duty publisher. Through lawyer Jonathan Bitran, the Canada Competition Bureau (CCB) called out the Xbox maker for its "factual inaccuracies."

In his letter, Bitran wrote that his organization told the two parties of its disapproval in early May. Its primary point of concern was that the merger was "likely to result in a substantial prevention and/or lessening of competition with respect to gaming consoles and multigame subscription services.

Much like with the CMA, cloud game technology is also of worry for the CCB. Bitran said that the regulator will "[continue] to monitor the transaction."

TheRona

It was very weird for the CCB to chime in, it was pretty pointless.

Overall, the hearing hasn't gone well for the FTC. The judge had to remind them that this isn't about what's good for Sony, it's about what's good for the consumer 😁

Exclamation Marc

https://www.boards.ie/discussion/comment/120788406#Comment_120788406

Pointless? I think if a claim is made that every regulator has approved this, and one hasn't, its perfectly reasonable for them to clarify their position.

TheRona

https://www.boards.ie/discussion/comment/120788645#Comment_120788645

Yeah, it was pointless because their window to object had passed.

Exclamation Marc

https://www.boards.ie/discussion/comment/120789006#Comment_120789006

Not the point. They wanted the record to be correct, which is their prerogative. Its irrelevant what difference it makes (likely none).

CatInABox

I guess from Microsoft's point of view, if a regulator takes too long to make a decision, allowing the window where it's possible to raise an objection, then they have in effect, chosen to approve it.

One of the more interesting things about Canada raising this objection is why now? MS has been saying this since the first appeal to the CAT in the UK, well over a month ago. Why wait until the last day of a trial more than a month later to correct the record? It does raise questions about how much coordination there is between the various regulators, and whether any rules there where broken. All those meeting between the CMA and the FTC, where they got to share each others work, and all that they could come up with was some really flaky math, emails taken out of context, and straight up mistakes, what were they talking about during all those meetings?

Exclamation Marc

https://www.boards.ie/discussion/comment/120790422#Comment_120790422

You can't infer you have approval if you haven't been granted it. They might have been able to say "we have yet to have any other regulator disapprove the merger" which is probably what they should have said.

Varik

Most countries' regulators don't actually approve anything they just stop investigating, they don't consent to anything or limit themselves from taking action after the fact for mergers. Even if allowed to continue subject to whatever remedies they've demanded there's no double jeopardy with this, new investigation can always be started even with minimal change in market circumstances.

Exclamation Marc

https://www.boards.ie/discussion/comment/120790815#Comment_120790815

This is it. It can be such a haphazard process.

Mr Crispy

Not over yet, of course. But it's a win for MS for now.

https://twitter.com/tomwarren/status/1678782882494525440?s=20

Mitch Connor

Big win for MS.

Will be interesting to see if the FTC take the loss and withdraw, or if they think the bigger case, with the larger burden of proof on their side, is one they can win.

CatInABox

Huh, judge fairly laid into the FTCs reasoning. Says that this acquisition, in tandem with the concessions offered by MS, will clearly allow more consumers access to ABK content.

My guess is that MSs UK lawyers are deep into how this can be brought into the appeal over there.

I very much doubt that MS would close over the CMA, but a part of me kinda wants to see it, just for the chaos.

johnny_ultimate

Can’t put my thoughts any more succinctly than Patrick does here:

https://twitter.com/patrickklepek/status/1678789774604206081?s=46&t=nwvJe3fJtU0siJ7wj5mjTA

We’ll see how it all plays out in the UK and whether the FTC pursue it any further. Odds are tilting towards the deal going ahead, but still wouldn’t trust Microsoft as far as I could throw them and I for one remain deeply, deeply uneasy about the increasing corporate consolidation within gaming (see also: the Embracer clusterfuck).

CatInABox

MS, ABK and the CMA has suspended the litigation in the UK, in the hopes of reaching a deal. Looks very much like a settlement of some sort is on the cards.

CatInABox

https://www.boards.ie/discussion/comment/120837424#Comment_120837424

Yeah, agree on the scrutiny, it's definitely needed, even on smaller acquisitions. One of the reasons that the judge denied the injunction is down to the fact that, in this case, the scrutiny already worked. MS committed to various actions that they otherwise wouldn't have.

astrofool

https://www.boards.ie/discussion/comment/120837140#Comment_120837140

The deal can now go ahead and any changes required by the FTC (if they win that case) would occur later.

This essentially lifts the block on the purchase and any enforcement is upon the combined new entity.

Now watch the UK scramble to unblock on the issue that no one else cared about (cloud gaming) or lose a lot of investment (MS/Activision would likely go the publisher only route in the UK).

johnny_ultimate

The CMA doesn’t need to scramble to do anything: the appeals process in the UK is a lot more legally limited in scope than in the US, and any findings would go back to the CMA for final review.

It’s very much in Microsoft’s interest to reach a negotiated deal before that happens to allow everything go through smoothly. And the CMA could get bigger concessions from MS than they did in the first place. A negotiated deal would be closer to a win-win for both parties as any other likely outcome.

astrofool

https://www.boards.ie/discussion/comment/120838260#Comment_120838260

Apart from the fact that they scrambled to do something once the FTC lost it's case?...

There are ways around the CMA for a $70bn deal to happen, as I noted above, they can move to publisher only status in the UK. But that won't happen because the CMA will fold on their one issue (cloud gaming).

Like everything that happens with the UK recently, a face will be put on it to make it seem like they got something while everyone really knows they're powerless in the grand scheme of things.

The deal closes on July 18th.

CatInABox

Looks like the CMAs price will be for MS to spin off some or all of their xCloud business in the UK.

https://twitter.com/tomwarren/status/1678881291087802369

MS must be laughing their asses off at such a small price.

Mr Crispy

https://twitter.com/dinabass/status/1678920266330804226?s=20

😑.

marcbrophy

fcuking simpletons! 🙄

johnny_ultimate

Good: FTC should fight this with everything they have (everything they have being substantially less than the infinite legal resources at Microsoft's disposable).

Some interesting analysis here that separates the case from the silly console war guff in a lot of the gaming-centric coverage of it:

https://www.thebignewsletter.com/p/judge-rules-for-microsoft-mergers

TheRona

https://www.boards.ie/discussion/comment/120840392#Comment_120840392

Seems a pretty one-sided read. Microsoft are going to create a monopoly in the gaming industry? I guess time will tell.

The biggest problem is that the FTC were terrible, from everything that I read. Way too focussed on the impact this merger would have on Sony.

johnny_ultimate

https://www.boards.ie/discussion/comment/120840554#Comment_120840554

It's certainly one-sided in the sense the author is very much interested in the broader corporate merger / antitrust landscape in the US, and is very critical of big mergers based on the plethora of evidence of how destructive they've been (from Disney in entertainment to US medicine prices). But that's an important perspective to add to the conversation.

Personally, I'd rather any of the big game companies are stopped from being in a position where they can work towards increased monopolisation and consolidation, rather than letting paradigm-shifting deals through with a 'time will tell' attitude whether they'll abuse it or not. Microsoft, once again, has a horrendous track record of actively abusing their dominant market position - their gaming division may seem warm and welcoming now, but a natural change of leadership could swiftly change that.

No doubt the FTC made some errors and missteps in their case, but as Judge Corley herself correctly noted at the end of the case, they're also always on the backfoot in terms of resources when facing off against large corporations. And in the current US legal system, the scales are heavily tipped towards corporations getting their way despite an administration that's keen to crack down on massive mergers. Even if Microsoft ultimately prevails here - a very likely outcome - FTC should still regroup and fight it, as even if they lose it will strengthen the case for more refined laws / regulations and help them adjust their strategy for future big tech legal battles.

quokula

Pretty unbelievable that the decision to overrule the federal trade commission and put Microsoft and Bobby Kotick's interests above those of consumers and industry at large was put in the hands of a single judge who's son works for Microsoft. How on earth can that be seen as an unbiased decision?

McFly85

https://www.boards.ie/discussion/comment/120840554#Comment_120840554

I mean, if they’re allowed up continue to hoover up publishers, they probably will? That’s the precedent being set here.

And I don’t see it as the FTC taking sonys side, but I can see why it might seem that way due to the nature of the console business and Sonys large market share.

I hope the FTC do appeal, long term deals this big are bad for the industry and for competition.

TheRona

https://www.boards.ie/discussion/comment/120840634#Comment_120840634

Does this merger result in Microsoft having a dominant market position, or in Sony having less dominance?

The author of the article seems happy to criticize the judge and how inept they are, while completely disregarding how poor the FTC were in arguing their case. Some of their reasoning was nonsensical.

sniper_samurai

https://www.boards.ie/discussion/comment/120840671#Comment_120840671

The Judge was upfront about that at the start of the hearing and the FTC had no objection to her sitting for it.

The FTCs entire case seemed to be centred around damage to Sony as opposed to damage to the consumer, which is their remit.

I'm not a fan of these big mergers either, but at least they appear to be under increased scrutiny and not just letting MS hoover up all potential competition like Facebook.

At least it isn't like the Supreme Court where ethics appear to be completely missing.

titan18

Just kind of want it to be done. Whether they buy them or not, just want it to be done so Activision games can start getting added to Gamepass, or Microsoft can pivot and put that money to use elsewhere. Feels like it dragging on is worsening the value of Xbox.