The funniest part is MS waving these deals around AFTER the CMA already said they would need a SHITLOAD of convincing to even consider behavioural remedies.
Microsoft's acquisition of Activison Blizzard
- Thread starter Satoru
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Does anyone know if the EC are more similar to the FTC or the CMA in terms of whether their decisions can be overruled by a court?
It its very funny and what makes it funnier is that is the over dramatic style of public drama MS is using to put eyes on this review process is not sitting well with EU and CMA. That style might work with the US system but doing more harm than good anywhere else. The fan base attacking anyone that dont agree with their view of the acquisition is also not helping. But overall the how MS handled themselves with the Zenimax Acquisition set the overall tone on how they would be treated with future attempts.
The EC decisions are appealed to the exact same board that made them, so they are seldom overturned.
Just like the CMA.
It doesn't work in the US unless the public puts pressure on their elected officials, because the FTC actually goes into legal proceedings against a company after the hearings and discussions to determine if a deal needs to be stopped.
The public input period for the MS/Activision merger was last fall.
Yep. This is about rapid onset consolidation itself, not simply who's the one pushing it through. Which right now, is Microsoft, because even though they said they did this (to some extent) to keep out Amazon, Google etc. (which is already a BS reason to justify acquisitions), the fact is Sony is the only big tech company that's made massive publisher acquisitions in Zenimax and are trying to rush doing again with ABK. Google's out; Amazon at most have purchased certain rights to gaming IP, Meta have simply purchased smaller developers (for VR), Tencent's made their strategy on buying shares in various companies.
The only companies or firms that have been doing a strategy similar to Microsoft is Embracer Group, who purchased THQ and a whole host of IP, but are barely doing a lot with the majority of them and seems their real goal is to license out valuable IP to other companies after acquiring them at a cheap price. People would want to say Sony's done similar buying Bungie but, Bungie aren't "really" a publisher; they published Destiny through ABK, Halo through Microsoft...they are only now a publisher acting as a subsidiary to PlayStation, and they only have a single IP they're even publishing.
The regulators need to be really considerate about what message they're sending in how they handle this ABK acquisition. Something of this size, with a company as massive as Microsoft...if they let it pass with only behavioral remedies or even (very weak) behavioral remedies, especially after certain agencies like the FTC and CMA have shown earlier they were willing to fight it, they are going to open the floodgates to a death spiral in the games industry. You're going to see Microsoft try for yet ANOTHER publisher acquisition and expect it to go even easier because if they could get ABK approved with light remedies, why could they, say, not get Ubisoft or Sega through with zero concessions?
You're going to see other big tech companies like Amazon, Meta, Tencent, maybe even Google, see the MS/ABK acquisition as an "A OK!" and go ahead with big developer & publisher acquisitions of their own. Investment groups like Sazzy Group will do the same. You're going to see talent exodus of various people at the studios of these developers & publishers who are being acquired in a "games acquisition gold rush" but in turn be cut off from the levels of funding they previously had, which could lead to a decay of various 3P AAA franchises and a lack of new 3P AAA franchises/IPs to fill their spots. Believe it or not, the industry can't survive off of just indie games; what indie and smaller games we usually see from bigger 3P and 1P publishers is due to the revenue the AAA 1P and 3P games generate in the industry.
If that revenue is jeopardized, it'll also lead to a drop in the volume of indie and smaller AA-sized games because not all of those are going to be crowdfunded, not all of those startups can secure the kind of loans needed to fund the type of games they made prior, etc. But if the only option for those developers is to then stay with a studio part of a publisher who's being acquired by a larger conglomerate, you're sort of presenting a false choice to them, especially when we see how some of these massive tech companies operate when it comes to efficiency of lower-volume divisions, or how these companies tend to be quick to axe underperforming departments (let alone the other issues that pop up).
I've seen people say that a talent exodus would benefit other companies; for example Sony, who tend to consider the talent they're wanting to acquire in particular. But the problem there is, companies like Sony only have a finite amount of resources, and they're a lot smaller than big tech companies like Microsoft. They aren't going to hire the entirety of that diaspora of talent; if key gaming revenue they would normally rely on for helping provide budgets for their larger AAA games is suppressed or cut off due to other companies buying up the 3P publishers who provide the majority of AAA content in the market, and those companies then prioritizing that content for their own platforms and/or services to gain market share (which at some point, WILL start to work because if you stick with something long enough, it'll eventually start to produce results, and these big tech companies can take the bleed from lacking game sales revenue for years or even decades due to gaming not being a main pillar of their business models), that's less money for Sony to both fund those AAA games and hire talent for games that might not end up getting made.
And for a company like Sony, it isn't as simple as diverting revenue from other divisions to feed PlayStation to continue making those sorts of games at the volume they do; PlayStation is both self-sufficient and individually Sony's biggest main pillar in terms of revenue. In that sense, gamine revenue means a lot more to them than it does to Microsoft or many of the other big tech companies, which puts Sony closer to Nintendo in that respect. Sony would basically be forced to change PlayStation's whole business model, but not because customers rejected what they offered. They'd be forced to, simply because other, significantly larger companies purchased up so much of the 3P market (particularly in terms of overall revenue) and in doing so would have starved companies like Sony out of the market. That's even beyond losing the ability to negotiate for 3P marketing deals or co-fund games with 3P developers; many of those other big tech companies have incentives to prioritize their own hardware & services platforms with whatever content they acquire, and natural instinct says that they will (either consciously or subconsciously) do everything possible to ensure competitors can't access or leverage that content on terms that threaten their vertical integration of the acquired content.
And, we don't need to "wait" to see this happen: it's already happening and has always been the case. You don't see Disney+ offering MCU films to HBOMax or Discovery, do you? You don't see Meta allowing a VR competitor like Sony investing in a co-developed exclusive with RAD, do you? You didn't even see Microsoft offer COD availability to Amazon Luna or AWS (or Apple Arcade), now did you? There are obvious reasons why. So if companies like Microsoft, Amazon, Apple etc. are able to basically go carte blanche and acquire big 3P publishers due to an approval of MS-ABK that basically is a wet fart of "slap on wrist" remedies for Microsoft, those companies are GOING to either remove access of that content to competitors, or make it so that competitors can no longer engage in the types of marketing, funding & development partnerships with that content they (and in fact ALL companies) were able to do when the creators/publishers of that content were actual 3P entities in the market. That has a knock-on effect which inherently rewards the largest companies and inherently punishes the smaller competitors, and removes the market further and further away from a fair & balanced neutral space where companies compete more on merit of their offerings to the public (versus consolidating the market of content creators & providers, built on generations of wealth in at least some cases gained through what would be considered anti-competitive practices today).
But wait, can't Sony just acquire publishers? Well, yes. But even if MS acquiring ABK would make things easier for a company like Sony, it's still a part of rapid industry consolidation. Something which didn't have to take place, and where there's no need for it TO take place considering the means of which the market has been operating for decades works as well now as it did decades ago. There's no industry financial crash like in the early '80s taking place where the entire industry model fails and needs a reboot; people say that AAA gaming might crash and maybe so, but that is clearly only the case for select publishers and all of them share the same mistakes of chasing after trends which don't pay off long-term. Sony is doing just fine as a AAA publisher; same with Nintendo, same with Take-Two, same with Bandai-Namco, same with Capcom...even companies like Sega are doing well in the AAA space these days. The only companies really in danger of falling apart in the AAA space are those who have not done their part in keeping up quality, or got greedy with MTX & lootboxes, NFTs, etc. And, almost all of the companies in that boat, happen to be Western ones.
Ubisoft, EA, Zenimax...they're all guilty of one or several of these things, but them being in a bind doesn't mean the AAA model is collapsing. And it doesn't mean the industry model is failing and needs a reset. So if there was ever a point that publisher acquisitions & consolidation were meant to be an answer to that "problem", then it was never a good answer because the "problem" was always isolated and never industry-wide to begin with. And ultimately, even the excuse that publisher consolidation would "solve" such a problem is a ruse because we all know the real purpose behind any consolidation: more ownership, more power & control over IP & assets, and more revenue & profit. All of which are driven by the desires of shareholders, board members, and corporate owners. Particularly when a company feels like it cannot grow further in a space due to reaching a saturation point, acquisitions start to look appealing. That's one reason and it's probably the one driving Microsoft's intentions, because just imagine where Xbox would be today if they did not acquire Zenimax after all. Very likely, the brand would effectively be dead in terms of market relevance, instead of just "somewhat declining" in said market relevance we are seeing ATM.
And, yes, on some level I can see how that gives Microsoft a decent excuse to justify making these acquisitions, but it simply can't be looked at on only those terms and I hope regulators are seriously considering the other reasons & ramifications listed in this post and others in this thread, and online among others who can clearly see the negative implications so should MS's acquisition of ABK go through without some sound structural remedies (at least to go alongside proposed behavioral ones). Because this acquisition is MUCH bigger than just Microsoft; depending on the decision and the terms of the approval the foundational integrity of this industry can either remain mostly intact, or it can be completely destroyed and see a sweep of consolidation so rampant that there really could be another industry crash 10 years from now.
That fate's mostly in the hands of regulators now, we can only hope they do the right thing.
We might be able to glean some hints about how things are going with regulators right now over the coming weeks by observing the behavior of those involved. More media/PR blitzes may mean MS are unhappy about something behind the scenes. If Sony suddenly accepted a deal it may mean that they now view resistance as futile. (Though this is unlikely)
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I've seen the argument used in this particular article below before and it's a pretty crappy one imo. It's the same East vs West argument Bobby Kotick used in an interview not long ago.
www.washingtonexaminer.com
The FTC should settle the Microsoft-Activision dispute - Washington Examiner
Opinion The FTC should settle the Microsoft-Activision dispute By Saul Anuzis February 26, 2023 06:00 AM Twitter LinkedIn Facebook Email Print Opinion The FTC should settle the Microsoft-Activision dispute By Saul Anuzis February 26, 2023 06:00 AM Twitter LinkedIn Facebook Email Print Millions...
www.washingtonexaminer.com
Sony is not going to accept anything but the deal being killed by regulators.
Hope your right! I have a bad feeling about the CMA and really bad feeling about CWA.
I actually feel like the CMA are the least likely to cave, the EC is a different story though.
Have you read the Provisional findings report from the CMA?
Nobody with a functioning brain and good reading comprehension could read that and say “Yup, MS is going to get what they want!”
What if they get lobbying, cheques, azure clouds, booze and free sex
Brad Smith and Lulu's statements on their provisional findings have come off as damage control to me personally. Jez was also hilariously pissed when the report first came out so it does feel like MS consider the CMA to be bad news for them so far.
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The CMA know exactly what they are doing, and demanding divestiture of COD is the perfect poison pill, as evidenced by Mad Brad declaring that that is totally unacceptable to MS.
Anyone who thinks the CMA would settle for any behavioural remedies after reading that section of the Provisional Findings is on acid.
OP
OP
TweekTown has been very pro acquisition, they are australian owned and some of the biggest Xbox fanboys are from Australia.
But I have only seen one or two tweets from him lately.
I've seen the argument used in this particular article below before and it's a pretty crappy one imo. It's the same East vs West argument Bobby Kotick used in an interview not long ago.
The FTC should settle the Microsoft-Activision dispute - Washington Examiner
Opinion The FTC should settle the Microsoft-Activision dispute By Saul Anuzis February 26, 2023 06:00 AM Twitter LinkedIn Facebook Email Print Opinion The FTC should settle the Microsoft-Activision dispute By Saul Anuzis February 26, 2023 06:00 AM Twitter LinkedIn Facebook Email Print Millions...
Always funny to see shades of those 1980s "Japanese tech takeover of America" fears pop back up every now and then in moments like this. It's just such a comical thing to have and doesn't work as a good argument in this case for being in favor of the acquisition. Even if Microsoft is an "American" company in theory, a large bulk of their workforce is in non-American countries, their products are manufactured in Chinese factories, they probably keep some large portion of their monies in non-American banks, etc. It's like the cheap "Made in America" clothing companies that still get their products produced in China and Indonesia; they just replace the "Made In" tags to say America
.And the funnier part is, I do agree in principal that there are things the government could do to strengthen corporate incentives and economic factors to benefit American citizens. But I think those things should be like-for-like. For example, since China doesn't allow American companies to acquire Chinese ones (or land for development, IIRC), the American government shouldn't allow Chinese companies or investors to buy American corporations/land/resources. Stuff like that.
But that's got little to do with this ABK acquisition. That article is trying to infuse political arguments into something that should really be viewed outside of that particular angle. Letting Microsoft buy ABK won't make America "stronger", it'll just make Microsoft an even larger mega-conglomerate than it already is. It's not suddenly going to lead to more jobs for Americans, or higher salaries for American employees at Microsoft, or ANYTHING like that. The only thing these big companies care about being "patriotic" to, is money.
And for them, that money is global.
Also, the article is littered with factually unsubstantiated arguments, like this one:
If the person who wrote this did any research, they'd know that almost 95% of revenue in the gaming console market comes from things other than gaming subscription services! The analogy to DVD is disingenuous because that is for an industry whose technology both in production of the content, and consumption of the content by end customers, reached a point to which banal, entry-level commodity hardware in a wide range of device types, could provide the content without issue.
There aren't a crap-ton of different programming languages, graphics suites, or APIs for making movies and TV shows. The barrier to having a good enough camera to record high-resolution content of real-life people and locations is magnitudes cheaper than recreating visuals at that detail to run in real-time on computing hardware that has had to see multiple generations of new hardware to attempt getting close to real-world results (and they still haven't accomplished that yet).
There is ZERO "market-driven evolution" in the industry for subscription gaming; if that were the case, Microsoft would not have needed to rely on a literal pandemic causing global lockdowns, to see a swell in Game Pass subscriber growth! They wouldn't need to purchase a massive publisher like ABK, if the market was naturally being driven into a subscription-based gaming future. I don't expect political pundits masquerading as games journalists to understand this, but actual gamers get it, regulators (hopefully) get it, and Microsoft hopes regulators don't get it.
Who are they and why should I care (respectfully)?
I think @thicc_girls_are_teh_best wrote more words on this page of the thread, then I have in my entire life.
