Microsoft accuses UK regulator of adopting Sony’s complaints over Activision Blizzard deal

[Hezekiah]

It's one topic that I am tired of.. why are people acting like I shouldn't be on forums because I find the analysis corny?

lol

I'm just over it... I wish we had actual games or tech or something else to talk about but gaming has been pretty fucking boring this last year.

So move to a different thread..?

 

[DonFerrari]

I think MS is completely right on what they said there, with an exception: they "forgot" to mention that their commitment to keep CoD on PS was only limited to 3 years more in addition to the already signed ones.

But as MS mentions, making it exclusive wouldn't make sense financially for them and wouldn't hurt Sony at all, PS barely would notice it and would continue being the console market leader.

I don’t get why that three year offer is a bad thing. They don’t even own the property yet and they’re committing to three years beyond the current deal. What else can they do? It’s like some people, not saying you in particular, expect some legally binding guarantee that CoD will always be on PlayStation. Why would they do that?

 

[Darth Vader]

Well it's just my opinion, man. And it's a forum, so I'm allowed to say my opinion <3

I'm just messing around though... but we are looking at legal arguments back and forth from corporate giants.. and none of us have any clue how regulators will react to this shit.

I'm well within my rights to comment on it.

 

[Bryank75]

Just let them have it if they give us back Crash and Spyro....

I think that's a fair deal.

 

[Dick Jones]

Just let them have it if they give us back Crash and Spyro....

I think that's a fair deal.

I'd take that. Spyro is dead and Crash is looking increasing like the only reason it will be made is just to be an exclusive so it could send a middle finger to Sony rather than wanting to make a good game. I expect to be using the following after Crash 5 appears

 

[Sircaw]

I don’t get why that three year offer is a bad thing. They don’t even own the property yet and they’re committing to three years beyond the current deal. What else can they do? It’s like some people, not saying you in particular, expect some legally binding guarantee that CoD will always be on PlayStation. Why would they do that?

Three-year offer, then what, the game is retracted from the PlayStation ecosystem.

The game has been part of the Sony eco=system for how long? it's a consumer favorite, this is not some niche game that a few people look forward.
Gamers have invested/spent money in the expectation that this game would be available to them for years to come.

Three years is a Turn off the Taps Scenario.
Are we meant to trust Microsoft at face value,

Don't worry guys, after 3 years we will let it continue on Sony's platform.
Play your games where ever you want, as long as it's on our system bullshit.

 

[Yurinka]

I don’t get why that three year offer is a bad thing. They don’t even own the property yet and they’re committing to three years beyond the current deal. What else can they do? It’s like some people, not saying you in particular, expect some legally binding guarantee that CoD will always be on PlayStation. Why would they do that?

The acquisition won't really hurt Sony even if it goes full exclusive tomorrow and remove the already published ABK games from PS. The 3 years is ok for Sony, even if they would prefer to keep it and forever and 3 years more is better than nothing, and MS is free to do whatever they want with the company they bought. There is nothing bad with MS offering 3 extra years.

The bad part, the one who could annoy regulators, is that MS talks publicly or to regulators as if they would plan to keep CoD on PS forever but the reality is that their plans seem to be different (to extend it for 3 years only probably to pass the regulation and go exclusive after it once regulators forgot about it and once had time to make some other big acquisitions).

So regulators, even if they understand that every company is defending their own interests, may think that MS is lying to them and hiding their real plans, so MS could get punished for that. Or may force MS to stick what MS says or implies (to keep CoD forever), but as I mentioned I think it won't happen because CoD is only a tiny portion of the whole console gaming market and to lose it wouldn't affect Sony too much and Sony would continue being market leader.

If MS would be more honest with their plans, like saying publicly and to their regulators instead "we'll keep CoD on PS 3 more years after the ones ABK has already signed if Sony pays us what we ask them, and after that CoD will go console exclusive forever" the regulators would trust them more and would approve the acquisition faster and without less conditions (I think regulators will greenlight the acquisition and won't force MS to do anything).

 

[Remember_Spinal]

My thing is, if Sony and the rest of the industry let Microsoft just breeze through this acquisition it sets an incredibly bad precedent. A 2 trillion dollar company buying their way into market dominance is exactly why this deal should be scrutinized to hell and back despite what fan boys think should happen.

If Microsoft just effortlessly buys Acitiviiosn/Blizzard and openly talks about continuing to buy more companies afterward, its like whats left? Thats not really competition, its just a major tech conglomerate steam rolling an entire industry out of no where

 

[DonFerrari]

Three-year offer, then what, the game is retracted from the PlayStation ecosystem.

The game has been part of the Sony eco=system for how long? it's a consumer favorite, this is not some niche game that a few people look forward.
Gamers have invested/spent money in the expectation that this game would be available to them for years to come.

Three years is a Turn off the Taps Scenario.
Are we meant to trust Microsoft at face value,

Don't worry guys, after 3 years we will let it continue on Sony's platform.
Play your games where ever you want, as long as it's on our system bullshit.

It’s not like they can’t renegotiate for more years when those years are up. We see it all the time with EA and the NFL.

 

[Yurinka]

I just noticed that the CMA mentioned that the final results of this phase 2 investigation will be released in March, meaning MS won't close the acquisition before.

 

[Remember_Spinal]

I just noticed that the CMA mentioned that the final results of this phase 2 investigation will be released in March, meaning MS won't close the acquisition before.

The 3 biggest games from activision/blizzard coming out in the unforeseeable future missing gamepass day 1 is funny either way.

 

[arvfab]

That makes no sense, in that case they would be in favor of it. Sony even if they have the pennies are not dropping more than a few billion on a pub. So EA and T2 are off the list. Sony dont seem like the kind to spend tens of billions on acquisition for PlayStation, they would be better off just selling PS to meta , apple or google than compete with MS consolidation efforts.

Ever heard of "setting a precedent"?

If Sony rises some complaints and the authorities agree that they are not reason enough to stop the buyout, Sony can use this judgment to justify their own acquisition(s). (Btw MS is doing the same by mentioning Bungie).

 

[Eternal_Wings]

@Dodkrake
Tae Kim shared the full document. 76 sites!



Link to Documents

 

[Darth Vader]

@Dodkrake
Tae Kim shared the full document. 76 sites!



Link to Documents

Wooooops!

Btw the argument about acquired studios making new games exclusive is wrong, IMO. They are entitled to that. But grabbing games they already had and taking them away from other platforms (Elder Scrolls, Startfield, Hellblade 2, etc) that's the crux of the issue.

 

[Sircaw]

It’s not like they can’t renegotiate for more years when those years are up. We see it all the time with EA and the NFL.

The question is "why even put a date then"

 

[Loy310]

Ever heard of "setting a precedent"?

If Sony rises some complaints and the authorities agree that they are not reason enough to stop the buyout, Sony can use this judgment to justify their own acquisition(s). (Btw MS is doing the same by mentioning Bungie).

its best for everyone if there is no "setting a precedent", cause it would apply to every company. Deal needs to fail period

 

[Sircaw]

@Dodkrake
Tae Kim shared the full document. 76 sites!



Link to Documents

This is really not a good look for Microsoft

 

[arvfab]

its best for everyone if there is no "setting a precedent", cause it would apply to every company. Deal needs to fail period

That's the other side of the medal of what I said: If these complaints do indeed lead to stopping MS, it's still a win for Sony.

 

[Darth Vader]

These parts are very important and go in tandem with what I and others have been saying. Truncated for reading convenience, you can find the document here.

The CMA believes the Merger could allow Microsoft to make ABK content, including Call of Duty, exclusive to Xbox or Game Pass, or otherwise degrade its rivals’ access to ABK content, such as by delaying releases or imposing licensing price increases. This type of concern is known as ‘input foreclosure’, where a firm uses its control of an important input to harm its rivals.

The CMA examined internal documents and economic analyses to assess whether Microsoft would have an incentive to use ABK’s content to foreclose rivals. (...) the CMA considered Microsoft’s broader strategies, as evidenced by its internal documents and historical course of dealing following similar transactions in the past. The CMA found that the potential strategic benefits to Microsoft of using ABK’s content to foreclose rivals (...) could outweigh any immediate losses in terms of licensing revenues. The CMA notes that Microsoft has followed this approach in several past acquisitions of gaming studios, where it made future game releases from those studios exclusive in consoles to Xbox (such as the upcoming Starfield and, based on Microsoft's public statements, Elder Scrolls VI from Bethesda, a studio Microsoft acquired as part of its USD 7.5 billion acquisition of ZeniMax in 2021).

The CMA believes that in the short- to medium-term, the main rival that could be affected by this conduct would be Sony. Evidence suggests that Microsoft and Sony compete closely with each other in terms of content, target audience, and console technology. Nintendo, on the other hand, competes less closely with either of Sony or Microsoft, generally offering games that focus more on ‘family fun’ and innovative ways of playing (eg the Wii Fit board) and does not currently offer any Call of Duty games on the Nintendo Switch.

PlayStation currently has a larger share of the console gaming market than Xbox, but the CMA considers that Call of Duty is sufficiently important that losing access to it (or losing access on competitive terms) could significantly impact Sony’s revenues and user base. This impact is likely to be felt especially at the launch of the next generation of consoles, where gamers make fresh decisions about which console to buy. The CMA believes that the Merger could, therefore, significantly weaken Microsoft’s closest rival, to the detriment of overall competition in console gaming.

As the market for multi-game subscription gaming services grows, Microsoft could use its control over ABK content to foreclose rivals, including recent and future entrants into gaming as well as more established players such as Sony. Absent the Merger, ABK games would in principle be available to any multi-game subscription service. The CMA recognises that ABK’s newest games are not currently available on any subscription service on the day of release but considers that this may change as subscription services continue to grow. After the Merger, Microsoft would gain control of this important input and could use it to harm the competitiveness of its rivals. As the multi-game subscription market is still in its infancy, the effect of the Merger could be to tip or significantly increase concentration in the market in Microsoft’s favour before future rivals have a chance to develop. The CMA therefore believes that the Merger gives rise to significant competition concerns in multi-game subscription services (including cloud gaming services, to the extent these are distributed through multi-game subscription services).

This is what they are implying throughout the document, pretty much.

Winner-Takes-All Market: Definition, Examples, Economic Impact

A winner-takes-all market is when the best performers capture a very large share of the rewards, and the remaining competitors are left with little.

www.investopedia.com

Additionally

As a result of these concerns, the CMA believes that the Merger gives rise to a realistic prospect of an SLC in gaming consoles (together with their digital storefronts), multi-game subscription services, and cloud gaming services. The CMA is therefore considering whether to accept undertakings under section 73 of the Act. Microsoft and ABK have until 8 September 2022 to offer an undertaking which might be accepted by the CMA. If no such undertaking is offered, or the CMA decides that any undertaking offered is insufficient to remedy its concerns to the phase 1 standard, then the CMA will refer the Merger for an in-depth phase 2 investigation pursuant to sections 33(1) and 34ZA(2) of the Act. Following such a further detailed investigation, the CMA would reach a final decision as to whether or not the Merger gives rise to an SLC.

Edit - Pages 27 and 28 are absolutely brilliant in describing the full extent of sectors impacted by this acquisition

 

[Dabaus]

I guess my question or concern is, will microsofts spin or rebuttals (and threats/bribes) be enough to persuade the CMA or other regulators? If COD was going to stay on PS like they say, why all the talk about competition? What is there to compete agaist if the status quo is fundamentally the same?