Microsoft's acquisition of Activison Blizzard

[Shmunter]

Deal is dead, CMA rejecting the 10 year stunt, doesn’t help foreclosure…



Microsoft's contractual arrangements with Sony or Nintendo are not likely to have any significant impact on the ability to foreclose Sony (page 145)

While we acknowledge that the existing contractual arrangements between SIE and Activision may provide SIE with some protection in the short-term, the relevant protections are clearly of limited duration. As a result, even if they did impact the Merged Entity's ability to foreclose in the short term, they are not of sufficient duration to have a material impact on our competitive assessment, which considers potential concerns with a longer time horizon.
As Microsoft's separate offer to SI remains under negotiation, and there is currently no agreement in place, we do not currently consider this has any impact on the Merged Entity's ability to engage in foreclosure. We also do not consider it appropriate or relevant to comment on the various motivations and behaviour of Microsoft and SI during these negotiations
As such, our provisional view is that Microsoft's contractual arrangements are not likely to have any significant impact on its ability to foreclose SIE


The Minecraft model is not exactly comparable to the COD model (page 150)

The Parties said Minecraft is the most comparable franchise previously acquired by Microsoft to CoD, and that Microsoft kept it available on PlayStation and expanded its reach to other platforms after its 2014 acquisition of Minecraft's publisher Mojang. We note, however, that Minecraft has certain key differences to CoD. Before being acquired by Microsoft, Mojang Studios sold Minecraft for a one-time fee, after which users received lifetime updates and content. Following the acquisition, Microsoft continued to charge a one-time fee (of around $30) and developed other ways of monetising the game, including subscription payments for multi-player functionality, merchandise from the Minecraft Shop (eg, t-shirts, lamps, mugs, etc, and game-enhancing features from the Minecraft marketplace (eg, skin packs, texture packs adventure maps, etc). This legacy monetisation model of a one-time fee for lifetime access and updates, which predated Microsoft's acquisition, differs significantly from CoD, where users buy the new premium iteration of the game every year for a higher fee.

 

[AshHunter216]

Based on some of the schedules I've been reading, MS are supposed to be meeting with the CMA for their hearing on March 1st, with the other parties meeting with them in the following days / weeks.

On a side note: Do you all think the worker's union's appeal to the regulators on behalf of the acquisition will have a lot of sway with the regulators? Seems like they would mainly be concerned with how it would affect consumers and market competition, not necessarily the workers, though I do think Bobby Kotick and Lulu need to go regardless of the outcome.

 

[AshHunter216]

Deal is dead, CMA rejecting the 10 year stunt, doesn’t help foreclosure…



Microsoft's contractual arrangements with Sony or Nintendo are not likely to have any significant impact on the ability to foreclose Sony (page 145)

While we acknowledge that the existing contractual arrangements between SIE and Activision may provide SIE with some protection in the short-term, the relevant protections are clearly of limited duration. As a result, even if they did impact the Merged Entity's ability to foreclose in the short term, they are not of sufficient duration to have a material impact on our competitive assessment, which considers potential concerns with a longer time horizon.
As Microsoft's separate offer to SI remains under negotiation, and there is currently no agreement in place, we do not currently consider this has any impact on the Merged Entity's ability to engage in foreclosure. We also do not consider it appropriate or relevant to comment on the various motivations and behaviour of Microsoft and SI during these negotiations
As such, our provisional view is that Microsoft's contractual arrangements are not likely to have any significant impact on its ability to foreclose SIE


The Minecraft model is not exactly comparable to the COD model (page 150)

The Parties said Minecraft is the most comparable franchise previously acquired by Microsoft to CoD, and that Microsoft kept it available on PlayStation and expanded its reach to other platforms after its 2014 acquisition of Minecraft's publisher Mojang. We note, however, that Minecraft has certain key differences to CoD. Before being acquired by Microsoft, Mojang Studios sold Minecraft for a one-time fee, after which users received lifetime updates and content. Following the acquisition, Microsoft continued to charge a one-time fee (of around $30) and developed other ways of monetising the game, including subscription payments for multi-player functionality, merchandise from the Minecraft Shop (eg, t-shirts, lamps, mugs, etc, and game-enhancing features from the Minecraft marketplace (eg, skin packs, texture packs adventure maps, etc). This legacy monetisation model of a one-time fee for lifetime access and updates, which predated Microsoft's acquisition, differs significantly from CoD, where users buy the new premium iteration of the game every year for a higher fee.

Idas posted this recently?

Edit: Can someone here post the screenshots from the Idas post? I'm not able to atm.

 

[Aidendelaney95]

Idas posted this recently?

Edit: Can someone here post the screenshots from the Idas post? I'm not able to atm.

Seems within the last hour or so.

 

[Gods&Monsters]

Deal is dead, CMA rejecting the 10 year stunt, doesn’t help foreclosure…



Microsoft's contractual arrangements with Sony or Nintendo are not likely to have any significant impact on the ability to foreclose Sony (page 145)

While we acknowledge that the existing contractual arrangements between SIE and Activision may provide SIE with some protection in the short-term, the relevant protections are clearly of limited duration. As a result, even if they did impact the Merged Entity's ability to foreclose in the short term, they are not of sufficient duration to have a material impact on our competitive assessment, which considers potential concerns with a longer time horizon.
As Microsoft's separate offer to SI remains under negotiation, and there is currently no agreement in place, we do not currently consider this has any impact on the Merged Entity's ability to engage in foreclosure. We also do not consider it appropriate or relevant to comment on the various motivations and behaviour of Microsoft and SI during these negotiations
As such, our provisional view is that Microsoft's contractual arrangements are not likely to have any significant impact on its ability to foreclose SIE


The Minecraft model is not exactly comparable to the COD model (page 150)

The Parties said Minecraft is the most comparable franchise previously acquired by Microsoft to CoD, and that Microsoft kept it available on PlayStation and expanded its reach to other platforms after its 2014 acquisition of Minecraft's publisher Mojang. We note, however, that Minecraft has certain key differences to CoD. Before being acquired by Microsoft, Mojang Studios sold Minecraft for a one-time fee, after which users received lifetime updates and content. Following the acquisition, Microsoft continued to charge a one-time fee (of around $30) and developed other ways of monetising the game, including subscription payments for multi-player functionality, merchandise from the Minecraft Shop (eg, t-shirts, lamps, mugs, etc, and game-enhancing features from the Minecraft marketplace (eg, skin packs, texture packs adventure maps, etc). This legacy monetisation model of a one-time fee for lifetime access and updates, which predated Microsoft's acquisition, differs significantly from CoD, where users buy the new premium iteration of the game every year for a higher fee.

Idas post is new but that info from the CMA is old. I read that already a few weeks ago. No updates since then.

 

[AshHunter216]

Idas post is new but that info from the CMA is old. I read that already a few weeks ago. No updates since then.

Just hasn't given his opinion on it until now then, I see. It is interesting that he views the 10 year deals as unlikely to convince the cma just like posters here have said.

can someone post the screenshots here?

 

[Doncortez77]

I found this part from Idas post interesting

ABK thought about developing COD for Nintendo Switch, but the storage capacity was a serious problem (page 94)

Activision's internal documents note the technical limitations of the Nintendo Switch console. For example, one Activision document notes in an early-stage assessment that, to produce a CoD title on the Nintendo Switch, the CoD game would need [REDACTED] (whereas most current CoD titles require from 125- 175GB of storage on console or PC). The document also refers to Apex Legends's [REDACTED]. Another Activision document analysing potential studios [REDACTED] CoD assesses the additional work required [REDACTED] and notes technical issues in other games [REDACTED].

The CMA believes that Nintendo Switch may not be capable of offering games such as COD (page 95) and the importance of the agreement with Nintendo (page 145)

We note the Parties' submission that challenges with porting a game to Nintendo Switch has not impacted Nintendo's ability to compete on the downstream console market, as it offers more games than Xbox and PlayStation, including major games such as Apex Legends, Fortnite and Doom Eternal. However, we consider the evidence above shows that, relative to the Xbox and PlayStation, the Nintendo Switch (i) does not currently offer the same suite of graphically intensive games that PlayStation and Xbox compete on (with the exception of a few games such as Fortnite and Apex Legends), (ii) may not be capable of offering certain graphically intensive multiplayer games (such as CoD), and (iii) does not offer a similar user experience (eg, in terms of storage, graphics, and framerate).

Likewise, regardless of whether [REDACTED] with Nintendo may be legally binding, notwithstanding that this theory of harm is primarily focussed on SIE for reasons already explained, there is also no certainty that this will lead to CoD becoming available on Nintendo. As stated above, the Nintendo Switch has certain technical limitations compared to the latest PlayStation and Xbox consoles (including, for instance, storage capacity). These limitations would need to be overcome for Call of Duty to become available for Nintendo Switch. This is notwithstanding any further disagreements or issues that may become apparent as both parties further develop [REDACTED]. Further, it is not clear at this stage the degree to which the CoD experience would differ on Nintendo Switch. This is acknowledged [REDACTED]. We are therefore unable to place material weight on this in terms of the Merged Entity's ability and/or incentive to foreclose given the early stage of the process and unforeseeable impacts on the market, and the more general limitations around contractual protection as noted above.

PS: this could be relevant to asses the importance of the agreement with Nintendo. For example, that maybe it's only useful for future hardware and in the mid-long term.


All that promising to make COD available to “150 million more players..” song and dance aint magically going to happen if that deal would have went through. Activision already reviewed the possibility and came to the conclusion that it wasn’t possible to bring a similar experience to the switch

 

[Doncortez77]

MS removed 2 games from Nvidia GFN, in theory for licensing issues, but the CMA is not convinced of the arguments (page 245)

We have also considered internal documentary evidence in relation to the previous acquisition of Zenimax (which includes the publisher Bethesda). Bethesda had two games (Wolfenstein: Young Blood and Quake 2 RTX) on NVIDIA GFN at the time of Microsoft's acquisition of Zenimax. Following the acquisition, a Microsoft internal document shows [REDACTED]:

(a) In an internal email in March 2021 to [REDACTED] notes that [REDACTED].

(b) In the same email chain, [REDACTED] replies to [REDACTED] suggesting they [REDACTED]. [REDACTED].

(c) Ultimately Microsoft decides to remove these games from GFN. In another email, [REDACTED] confirms that he has the 'OK' from [REDACTED] to give [REDACTED]. In this email thread, when discussing whether Microsoft should [REDACTED].

Microsoft submitted that it had a consistent policy not to allow a provider to stream its games without a license. Microsoft also submitted that while the Xbox Cloud Gaming team did not object to continuing to support these games on NVIDIA GFN, Microsoft ultimately removed the titles in 2021 because no valid licensing agreement was in place. Microsoft submitted that [REDACTED].

We consider that Microsoft did not provide convincing evidence to show the full motives behind Microsoft's decision to remove Wolfenstein: Young Blood and Quake 2 RTX from NVIDIA GFN.

Most importantly, Microsoft's submissions do not address the fact that a Microsoft senior employee [REDACTED]. In any case, we consider that these motives ([REDACTED] licensing) are not mutually exclusive and [REDACTED] are likely to have contributed to Microsoft's decision to remove the two Bethesda games.

 

[FatKaz]

All that promising to make COD available to “150 million more players..” song and dance aint magically going to happen if that deal would have went through. Activision already reviewed the possibility and came to the conclusion that it wasn’t possible to bring a similar experience to the switch

It's very sneaky from ms to make it look like they are somehow the driving factor of cod coming to Nintendo, when in truth it's more todo with the next switch may have a decent hardware bump for it to be feasible.

But yeah CMA have done their homework, and those Xbox fanboys/shills who think ms will somehow trump the CMA are in for a rude awakening as CMA have the receipts.

 

[nongkris]

CMA is proving that they are hands down the best anti trust agency in regards to research and transparency. No one knows what the EC is thinking but if they end up being duped and approving this, they’ll drop to the worst agency. CMA basically tore through the phony Nintendo and NVIDIA deals already with their research.

 

[KiryuRealty]

Based on some of the schedules I've been reading, MS are supposed to be meeting with the CMA for their hearing on March 1st, with the other parties meeting with them in the following days / weeks.

On a side note: Do you all think the worker's union's appeal to the regulators on behalf of the acquisition will have a lot of sway with the regulators? Seems like they would mainly be concerned with how it would affect consumers and market competition, not necessarily the workers, though I do think Bobby Kotick and Lulu need to go regardless of the outcome.

Nothing to do with labour is of any relevance whatsoever to the market damage the merger would cause, and that’s all the CMA is there to look at.

You seem to get sucked in be every PR smokescreen MS farts out.

 

[AshHunter216]

Nothing to do with labour is of any relevance whatsoever to the market damage the merger would cause, and that’s all the CMA is there to look at.

You seem to get sucked in be every PR smokescreen MS farts out.

Not really, I just like to be prepared for all outcomes and don't like to declare victory prematurely.

I'm still reading the rest of those cma excerpts, but yeah, based on what I've read now, seems like nothing MS have done so far will be enough. It's probably why they're doing this PR media blitz atm. Just today an article interview from a UK magazine with Phil Spencer defending the deal popped up.

 

[Yobo]

Based on some of the schedules I've been reading, MS are supposed to be meeting with the CMA for their hearing on March 1st, with the other parties meeting with them in the following days / weeks.

On a side note: Do you all think the worker's union's appeal to the regulators on behalf of the acquisition will have a lot of sway with the regulators? Seems like they would mainly be concerned with how it would affect consumers and market competition, not necessarily the workers, though I do think Bobby Kotick and Lulu need to go regardless of the outcome.

No regulators aren't going to support a Labor market monopsony

 

[AshHunter216]

Found Idas summary of what he thinks about the full CMA report from a twitter post. He still tries to soften things for those who are in favor of the deal, but he admits that that MS have a "Really steep hill to climb" with the CMA.

 

[Swift_Star]

Deal is dead, CMA rejecting the 10 year stunt, doesn’t help foreclosure…



Microsoft's contractual arrangements with Sony or Nintendo are not likely to have any significant impact on the ability to foreclose Sony (page 145)

While we acknowledge that the existing contractual arrangements between SIE and Activision may provide SIE with some protection in the short-term, the relevant protections are clearly of limited duration. As a result, even if they did impact the Merged Entity's ability to foreclose in the short term, they are not of sufficient duration to have a material impact on our competitive assessment, which considers potential concerns with a longer time horizon.
As Microsoft's separate offer to SI remains under negotiation, and there is currently no agreement in place, we do not currently consider this has any impact on the Merged Entity's ability to engage in foreclosure. We also do not consider it appropriate or relevant to comment on the various motivations and behaviour of Microsoft and SI during these negotiations
As such, our provisional view is that Microsoft's contractual arrangements are not likely to have any significant impact on its ability to foreclose SIE


The Minecraft model is not exactly comparable to the COD model (page 150)

The Parties said Minecraft is the most comparable franchise previously acquired by Microsoft to CoD, and that Microsoft kept it available on PlayStation and expanded its reach to other platforms after its 2014 acquisition of Minecraft's publisher Mojang. We note, however, that Minecraft has certain key differences to CoD. Before being acquired by Microsoft, Mojang Studios sold Minecraft for a one-time fee, after which users received lifetime updates and content. Following the acquisition, Microsoft continued to charge a one-time fee (of around $30) and developed other ways of monetising the game, including subscription payments for multi-player functionality, merchandise from the Minecraft Shop (eg, t-shirts, lamps, mugs, etc, and game-enhancing features from the Minecraft marketplace (eg, skin packs, texture packs adventure maps, etc). This legacy monetisation model of a one-time fee for lifetime access and updates, which predated Microsoft's acquisition, differs significantly from CoD, where users buy the new premium iteration of the game every year for a higher fee.

Here’s hoping the deal is really dead. And fuck Microsoft

 

[Swift_Star]

W

Not really, I just like to be prepared for all outcomes and don't like to declare victory prematurely.

I'm still reading the rest of those cma excerpts, but yeah, based on what I've read now, seems like nothing MS have done so far will be enough. It's probably why they're doing this PR media blitz atm. Just today an article interview from a UK magazine with Phil Spencer defending the deal popped up.

Well tbh there’s this one simple thing MS can do to make sure the deal goes through: shut the Xbox division down and go third party.

 

[KiryuRealty]

Not really, I just like to be prepared for all outcomes and don't like to declare victory prematurely.

I'm still reading the rest of those cma excerpts, but yeah, based on what I've read now, seems like nothing MS have done so far will be enough. It's probably why they're doing this PR media blitz atm. Just today an article interview from a UK magazine with Phil Spencer defending the deal popped up.

That’s the thing, none of what MS says in public relations posts means a damned thing. The process is essentially done with the CMA, as their Provisional Findings outlined how they see the situation and what conditions they’d approve the deal under.

They made it clear that they know MS is full of shit, that MS can shrug off any penalty for violating any deals they may offer anyone, and that it’s about controlling Call of Duty to keep PlayStation from having the biggest-selling game.

Their answer to this is to tell MS that the only way forward for the merger is divesting everything related to Call of Duty.

Nothing MS says or does or declares or threatens changes one jot of the findings.

On top of that, Mad Brad declared MS will absolutely not agree to divestiture under any circumstance.

Barring a sudden change of heart from Microsoft, that means they are just playing out the string to avoid publicly being the side that blinked. They’ve given the ultimatum, but the CMA is the side with the gun.

 

[Swift_Star]

Found Idas summary of what he thinks about the full CMA report from a twitter post. He still tries to soften things for those who are in favor of the deal, but he admits that that MS have a "Really steep hill to climb" with the CMA.

View attachment 682

“Complete clown show by the CMA” - green rat fanboy said.
It always amuse me when a random forum user claims to understand more about this than regulators.

 

[Swift_Star]

Random user on Era:

Do you believe if Microsoft shows Sony being disingenuous in their negotiations with the specific goal of getting the deal blocked that the CMA would consider this fact?

What do these people think this is?

 

[AshHunter216]

“Complete clown show by the CMA” - green rat fanboy said.
It always amuse me when a random forum user claims to understand more about this than regulators.

Lol you're still reading that thread's comments?