Microsoft buys Activision-Blizzard

johnny_ultimate · 12-07-2023 11:04am

https://www.boards.ie/discussion/comment/120840703#Comment_120840703

To the first point, we just don't know. It's clearly a case of Microsoft using its war chest to simply buy its way to a major advantage. The effect on Sony and Nintendo matters less than the idea of giving one company more and more power - as one Microsoft exec acknowledged, they are the one company that can simply outspend any others.

And for sure, I think the FTC's errors here should be acknowledged, and I wouldn't be too concerned about the judge's son in this case as I'm sure she was able to put that aside. But I also think there was more than enough to suggest a full hearing was warranted where a lot of the issues glossed over in the injunction case could be explored in a lot more depth in a specialised court - as Judge Corley acknowledged, her purview here was limited. And certainly, there seem to be some very specific interpretations of the law in the ruling, which should give the FTC the motivation to attempt an appeal. I certainly think the FTC made many worthwhile arguments that consumers may be hurt by this merger - in an appeal, they should double down on that rather than anything around harm to Sony.

johnny_ultimate · 12-07-2023 2:04pm

Seems like the UK appeal 'pause' is just that, and any new proposals / changes from Microsoft & Activision could even trigger a fresh merger investigation by the CMA:

https://www.theverge.com/2023/7/12/23792245/uk-cma-microsoft-activision-blizzard-deal-negotiations

TheRona · 12-07-2023 2:50pm

https://www.boards.ie/discussion/comment/120840755#Comment_120840755

Maybe the channels I was using to keep up to with the trial were pro-MS, but I didn't see many worthwhile arguments that consumers could be hurt by the merger.

What are some examples they used?

CatInABox · 12-07-2023 3:24pm

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

That's an unbelievably one sided read. Like, it's almost parody.

The judge does indeed have a son in MS, not the gaming division, but the FTC knew about it and wanted to continue (in fact, in some ways, they chose her), while MS wanted to have this in a totally separate courts system.

The FTC didn't show how MS wanting to create a "Netflix of gaming" was bad for consumers in any way, they literally didn't mention it at all.

The guy who talks about outspending Sony out of business wasn't the "head of the gaming division", and was taken out of context by the FTC anyway, it wasn't ever a plan.

The reason that she went with MS timetable on this is because the FTC had months in which it could have sought this injunction, but instead waited until the last minute to do so.

Even the Bethesda/Zenimax thing is ridiculous, they took one line out of a filing with the EU, and twisted it to say something it didn't, and the EU themselves came out to correct the record that MS didn't offer what they were talking about, and more importantly, the EU never even sought that commitment.

There's loads more very, very questionable assertions put forward in that article, and I can go through them if you want. I get that someone might not like the current laws over there, and indeed the massive amount of corporate power, but that article has more to do with fan fiction than legal analysis.

CatInABox · 12-07-2023 3:45pm

https://www.boards.ie/discussion/comment/120841620#Comment_120841620

Months more of this 😂😂😂😂😂

johnny_ultimate · 12-07-2023 4:09pm

https://www.boards.ie/discussion/comment/120841937#Comment_120841937

I'm sure there are others, but certainly:

That Microsoft already has a history of acquiring and subsequently withholding content that had previously been destined to be multi-platform, or making series that previously were multi-platform Xbox exclusive
That this is taking place within a broader context of consolidation within gaming (led by the likes of Microsoft, Sony and Embracer), and could be a further precedent. Indeed, evidence emerged in this trial of many other studios/publishers Microsoft has eyed up
That it's about a lot more than Call of Duty - the likes of Diablo, Overwatch and Warcraft are also very significant assets for a company to acquire
That Microsoft is clearly super ambitious about cloud gaming despite trying to downplay its importance, and acquiring Activision / Blizzard would give them an immediate advantage and significant ability to set the terms within a burgeoning industry
That the deals with other cloud-gaming platforms have 'loopholes' and Microsoft could opt 'unilaterally' to renegotiate (FTC's words in quotes there)
That Microsoft could keep the best version of games for their own platforms
That a walled garden or 'moat' like approach to Game Pass in the future could be detrimental to consumers (we're already seeing price increases there)
That Microsoft could easily afford to take a hit in withholding high-profile content from other platforms if they thought it would be to their long-term benefit

And don't get me wrong: I also don't like it when Sony indulges in some of the behaviour Microsoft engages in. And yes, a lot of this is based on what could happen, as opposed to what *definitely will* happen - nobody has any way of knowing how all this will play out long term. But my understanding of US law is that mergers can be blocked if they may substantially harm competition in the future, and there are certainly concerns around that here.

johnny_ultimate · 12-07-2023 4:37pm

https://www.boards.ie/discussion/comment/120842090#Comment_120842090

I also don't agree with the author re: the judge, for what it's worth :)

Matt Booty is 'Head of Xbox Game Studios' - so yes he's not head of the whole gaming division, but he is head of the development side of the gaming division.

On the timetable side of things, my understanding was the late application for the injunction came because of rumblings and reports that Microsoft was going to push ahead and close the deal regardless of the CMA, pending FTC hearing etc... The main administrative court side of things was always scheduled for August IIRC, and the injunction hearing was a bit of an emergency addition to the timetable given indications that Microsoft was going to push ahead with the deal. I could be wrong on that, though.

CatInABox · 12-07-2023 6:44pm

https://www.boards.ie/discussion/comment/120842411#Comment_120842411

Yeah, the judge thing is a total non-runner, and it's a red flag for anyone that takes it seriously.

Matt Booty, while high up, doesn't have any say in the direction of the company. He was on the stand for hours and the FTC came away with nothing.

Fair enough on the timetable thing, but you could argue that MS felt that they could do this after the FTC announced that their administrative process was now not binding on the FTC, and only advisory. In other words, if the FTC wanted to, they could ignore their own process and sue to block anyway.

https://www.boards.ie/discussion/comment/120842294#Comment_120842294

I get why you might not like some of this stuff (I don't like everything about it either), but again, all that stuff you describe isn't necessarily "anti-consumer".

For example, the FTC couldn't provide any evidence that MS taking these games (other than COD) exclusive was anti-consumer. Sony's Jim Ryan was on video saying that exclusives were sometimes pro-competitive rather than anti-competitive, something which the FTC eventually said as well.

Even on the cloud, they couldn't prove that this deal would be anti-competitive, and instead showed that the cloud deals that MS struck were actually pro-competitive.

Nvidia are a trillion dollar organisation, with teams of lawyers, and they were totally ok with those deals.

On the best versions of games, it ignores the fact MS don't have a history of this. To this day, Minecraft is better on PS than Xbox.

They couldn't prove that Game Pass was going to be this unassailable thing, and in fact, they didn't even try to be honest.

One thing the trial proved is that Xbox has to make money. They're not allowed to run a loss, so the idea that they can absorb massive losses is fanciful.

Honestly, most of the arguments that the FTC came up with in this trial were ridiculous. There was a way to frame this so that they had a chance of winning, and instead they just threw stuff against the wall in the hopes that something would stick. Even their star witness, the economist that they hired whose report showed anti-competitive effects, couldn't defend his report. He made up a number in the report, saying that 20% of COD gamers would switch, but he had nothing to back it up, it was just a guess.

Like, that article doesn't hold up to any scrutiny at all really. The whole "may"/"probably" thing is a bit of a sideshow as far as I can see, it'd matter in an actual trial, but this wasn't the actual trial, it was a preliminary injunction hearing, where the standard that the FTC had to reach was "probably win at trial". They couldn't even hit that standard. At any point in the future, the FTC could bring them to court to get them to unwind the deal, where the "may" would matter. I even question that "may lessen competition" standard, and whether that's actually used in real life. It'd seem to me that every merger would hit that standard.

Anyway, I have to admit, I enjoyed writing this massive wall of text. It's been a while since I've disagreed with something quite like that article. Not disagreeing with you, by the way, I have a feeling that our opinions on this are closer than it'd appear, I genuinely think mergers are bad, and I'd prefer if they didn't happen. I'm in the relatively nice zone where I don't actually care if it goes through or not, as I find that there's too many games on Game Pass for me anyway.

McFly85 · 13-07-2023 7:01am

https://www.theverge.com/2023/7/12/23791274/ftc-microsoft-activision-blizzard-appeal

As expected, appeal has been lodged.

Weather is goes through or not is another thing, but there did seem to be a few questionable areas of the judges ruling to make it worth lodging, particularly the judge’s interpretation of the Clayton act.

CatInABox · 13-07-2023 7:55am

https://www.boards.ie/discussion/comment/120844515#Comment_120844515

From what other lawyer people are saying, it's probably a non issue, as she used the same method that her courts system uses. It's weird how their whole justice system is set up, with courts in different regions having different interpretations of the same words, but the FTC would need to go all the way to the supreme court if they wanted to win on this.

in related news, ABK is going to be delisted from stock exchanges on Monday, so it seems like MS are full steam ahead on this.

Mitch Connor · 13-07-2023 9:10am

Surprised they have appealed - but even the act of the appeal could end the merger. It has been speculated that if MS can't move this forward by July 18th, the deal is dead. If the temp injunction is extended until the appeal is heard, then that in itself could prove curtains for the deal.

CatInABox · 13-07-2023 9:20am

https://www.boards.ie/discussion/comment/120844730#Comment_120844730

I believe that it's going before the panel of judges this Friday, with a ruling expected that day.

johnny_ultimate · 13-07-2023 9:40am

https://www.boards.ie/discussion/comment/120843030#Comment_120843030

I think the fundamental complication here - and why a regulator is inevitably on the back foot, facing an uphill battle - is that these kind of things ultimately boil down to stuff that *might or might not* happen in the future. There’s a large amount of uncertainty naturally built into predicting what will happen, and whether consumers ultimately will benefit or not from each individual change or decision.

There’s certainly a chance Microsoft will be true to their word indefinitely and this deal will ultimately benefit more people than would benefit without it. But there’s also a chance Microsoft will renege on some or all of their promises and lock a large amount of people out of popular games. All we have is the word of Microsoft executives that they won’t do that - and, personally, I’m not a big fan of relying on the word of corporate executives 😅 And of course Microsoft and Activision executives have every financial incentive to let this deal pass and choose their words appropriately.

I would say yes we’re probably broadly similar in perspective, but I’d definitely tilt towards wanting this deal to fall apart. Mainly because I think corporate consolidation is a terrible, ominous trend and this’ll set a major and dangerous precedent in that regard. It’s depressing reading how many people see this as a console war thing, and how many people are happy to wave it through because they get Diablo on GamePass or whatever. I’m a GamePass subscriber and I’d get Diablo too - I’d like to play Diablo without having to spend 70 quid! Unfortunately, I think this goes a lot deeper than that with potentially major consequences down the line, and I’m glad regulators are fighting it for that reason. Odds are stacked against them, but the fight is important and every concession they win is something.

CatInABox · 13-07-2023 9:58am

https://www.boards.ie/discussion/comment/120844874#Comment_120844874

Yeah, that's all fair enough. I happen to think that consolidation is bad for the industry, but I'm not sure that the industry has much choice. Thanks to that sharpie incident, this trial has really exposed the cost of AAA development. $200 million dollars a game isn't sustainable for a lot of companies, the risk involved in that kind of cost is potentially ruinous for small to medium sized devs.

Honestly, the games that I remember most these days aren't the AAA games anyway. I couldn't tell you much about those games, but man, I could wax lyrical about Obra Dinn, or The Outer Wilds. More of those games coming to Game Pass is great, but that obviously isn't the point of this deal.

Mitch Connor · 13-07-2023 10:36am

https://www.boards.ie/discussion/comment/120844955#Comment_120844955

When game pass was announced, along with studio aquisitions, I thought we would end up getting a lot more games like Pentiment or HiFi Rush, maybe even Outer Wilds - 'smaller' games from the studios that can be dev'd in a 2 year cycle, that are maybe passion projects of the people involved while much bigger games with longer cycles are being done by bigger teams (even within the same studio). I thought Game Pass would almost require MS to be asking their studios 'What smaller games do you want to make' because it would need a constant supply of games that Starfield or Doom can't be.

CatInABox · 14-07-2023 7:42am

Looks like MS will be spinning off their UK xCloud business to EE.

https://twitter.com/tomwarren/status/1679643924984479744

Had just moved to London when EE launched their 4G service. Ads for "4GEE" everywhere. You could tell who was Irish just by the smile on their face when they saw one of those ads.

Mr Crispy · 15-07-2023 2:53am

https://twitter.com/tomwarren/status/1679996860923097090?s=20

They're nearly over the line now.

murpho999 · 15-07-2023 10:28am

This deal is going through and when you look at it, it’s a good result for consumers and gamers as Activision’s games will be available on more platforms than before and most likely included in Game Pass for subscribers to that service.

Of course a deal of this magnitude needs scrutiny by regulators but from the outset it was pretty clear that the FTC was out to protect Sony and not consumers which is not what they are supposed to do. It appeared to me that they’re had been collusion between the FTC and Sony

Thanks to Sony’s efforts,in particular Jim Ryan, the case became all about COD, whilst the reality is that Microsoft wanted this deal more to get a foothold in mobile gaming which they currently have almost zero presence in.

Deals struck by Microsoft with Nintendo p, Nvidia and others offer COD to more gamers than before and I fail to see how this is bad thing

The FTC went to court and their case was pathetic and laughed out of court. Appeal failed too as nothing has been shown that consumer will be harmed by this deal

I understand that some are wary of Microsoft and their history but not all mergers are bad and after this deal they will still be in third place behind Sony and Nintendo in terms of consoles.

The truth is that right now that Game Pass is the best deal out there for gamers and Sony don’t like it as they want to keep the €70 per game model and this case has brought their questionable practices into light. Forcing developers not to put games on Game Pass etc.

Sony’s subscription service would not exist if it were not for Game Pass. That’s the benefits of competition and this deal is good for competition and ultimately good for gamers/consumers

johnny_ultimate · 15-07-2023 10:40am

The appeal hasn’t actually been heard yet - what’s happened here is that the Court of Appeal has denied blocking the deal until the appeal has been heard. So that removes any non-UK roadblocks to the deal closing. Still a very good chance the appeal will fail, but hopefully the FTC will continue the case through to its natural conclusion even post-closure. Even if they fail, it’ll be important to help refine their approach for future cases as the legal system is heavily stacked against them in the US (not through individual judge bias, but by decades of systemic issues and politicisation of the US courts system).

Still think this is going to be a bad deal for consumers going forward - somewhere down the line, Microsoft will inevitably abuse their new power. And it has nothing to do with Sony or Nintendo: giving corporations more power always leads to negative consequences, and especially in the US merger culture has led to profoundly bleak outcomes. The only solace is that ultimately this is just video games, as opposed to, say, medicines or other essential resources. Still, consolidated corporate power is always something to be deeply, deeply suspicious of.

johnny_ultimate · 15-07-2023 11:37am

Also, just in terms of the ‘haha the FTC was humiliated’ comments all over the internet.

Not only were they very much doing their job, the legal process here also gave us all a much greater insight into the behind the scenes communications and dealings of the video game industry. Some of the documents released during these hearings were truly fascinating and illuminating, and we’ve learned plenty about Microsoft, Sony and others in the process.

While hopefully they’ll push ahead with the case through remaining avenues, the process so far has brought some transparency to a ludicrously secretive industry. A case study in why these corporations and deals should be thoroughly examined by regulators.

Exclamation Marc · 15-07-2023 11:41am

https://www.boards.ie/discussion/comment/120853837#Comment_120853837

Industry consolidation is not good for the public in the long run, regardless of whether it's Microsoft, Sony or Nintendo.

The reality is that at one end of the scale, of course that the deal could benefit consumers in the long run but at the other end, it could significantly harm the industry. And that's the issue with these types of reviews, it's people trying to speculate.

Unfortunately Microsoft has history of making conditions and competition worse for consumers. Right now, Microsoft will sell the world how good it is for consumers, but in five, ten, fifteen years they could easily change their tune and it'll be too late.

The mistake people are making is looking at the market right now and the promises being made currently and saying "things are really good and what they're saying is good, so the deal can't be bad". People should be asking "how likely is it that Microsoft (a) stick to their word and/or (b) don't eventually harm the market in other ways by reducing choice, stimmying developers, squeezing creativity etc."

CatInABox · 15-07-2023 12:07pm

Interesting that for all the complaints online about how the judge applied the wrong standard for the appeal, the 9th circuit seems to have completely agreed with her and MS, telling the FTC to look at the two cases that MS cited about the standards.

Completely agree with the sentiment about where this acquisition could end up, but the industry as it is isn't great either. One of the things that came out during these hearings was how Sony is using it's market dominance to secure deals that are not realistically available to MS to keep games off Xbox. Indeed, one of the things the judge implied was that the FTC should have been looking into the behaviour of Sony with these deals, and may have done so explicitly(there's a large section redacted at this point in her judgement). Two wrongs don't make a right obviously, and I'd prefer if someone had stepped in before now to stop these kinds of 3rd party exclusivity deals, but we are where we are.

I do wonder if the FTC will actually take up an investigation in these deals now that the judge has highlighted them.

murpho999 · 15-07-2023 12:21pm

https://www.boards.ie/discussion/comment/120854068#Comment_120854068

Well for me ,t was the acquisition that brought about the case and the revealing of info about and for me showed how bad Sony is for its consumers and just wants to sell games for €70-80 whereas as Game Pass offers a much more consumer friendly deal.

The FTC following the appeal through now,would be a complete waste of time and US tax dollars. Very hard to reverse an acquisition when done and the reality is that the FTC do not have a case or any evidence of harm to consumers at all.

johnny_ultimate · 15-07-2023 12:21pm

https://www.boards.ie/discussion/comment/120854177#Comment_120854177

I hate the practice of third-party paid exclusivity too and would welcome investigations into it. But can't help but laugh at Microsoft's continued insistence they're some sort of underdog here. As emerged during the case, Microsoft's response to rumblings that Starfield might have some sort of PS exclusivity was 'buy Bethasda', an option likely unavailable to any other party due to the relative size of the parent companies. So rather than some sort of timed exclusivity for Starfield (ala Deathloop or any number of other third-party exclusives on all platforms) where everyone does get access to the game in the end, we have a situation where Microsoft just outright bought exclusivity to it and every other Bethesda game for eternity. And they've happily taken advantage of that exclusivity.

This case isn't so much the David vs Goliath story MS has been spinning as opposed to Goliath vs a bigger Goliath (and Microsoft is the bigger Goliath).

For what it's worth though, one unquestionable potential upside of the deal is that hopefully there'll be proper leadership reform in Activision-Blizzard after the scandals of the recent past. Bobby Kotick is going to get a hell of a payday out of this (another reason to be very cynical about this deal), but if he's actually booted out with his golden parachute at least that's a day-to-day improvement for the staff of the studios.

McFly85 · 15-07-2023 3:44pm

Unsurprising but depressingly expected. Market consolidation won’t represent value for consumers in the long term.

And from a purely gaming point of view I don’t consider it a good thing either. Xbox game studios have struggled with consistent, well received releases for years now. They’re one big release since acquiring Zenimax - Redfall - was released in a fairly shoddy state, even on their flagship console. As long as their management remains the same I except this to continue.

murpho999 · 15-07-2023 5:45pm

https://www.boards.ie/discussion/comment/120855052#Comment_120855052

I really don’t understand this viewpoint when it’s been made abundantly clear that MS will make Activision games available on more platforms than at present and have signed 10 year contracts with various platforms already.

Not all mergers are bad and I think this is good for gamers.

johnny_ultimate · 15-07-2023 5:56pm

https://www.boards.ie/discussion/comment/120855591#Comment_120855591

Because - and I hope this isn’t a controversial viewpoint - massive corporations fundamentally cannot and should not be blindly trusted to stick to their word.

Exclamation Marc · 15-07-2023 6:22pm

https://www.boards.ie/discussion/comment/120855591#Comment_120855591

Microsoft (and many other corporations) have said a lot of things over the years and.... not done them. You seem to be blindly accepting their word on it oblivious to the fact that shareholders do and will want as much of the market share and revenue as possible, even if that means removing competition (which is not good).

There is absolutely nothing stopping Microsoft signing the deal and then changing their minds. Or releasing significantly better or less buggy versions of games on Xbox to the point where Nintendo or PlayStation versions aren't worth the entry fee.

McFly85 · 15-07-2023 6:40pm

For what it’s worth - it’s in their interest to keep CoD on PlayStation, at least in the short term. Going the exclusive route now would be a massive opportunity for someone like EA with Battlefield to grab a huge slice of market share by being the top non-exclusive crossplay shooter.

The rest of the upcoming Activision games will be exclusive much sooner I would think.

Retr0gamer · 15-07-2023 6:43pm

I wonder will it stop Sony keeping final fantasy locked to their platform or make them relax that nonsense.

Microsoft buys Activision-Blizzard

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