So what do you guys think the CMA eventually settles on? They've taken a massive L with having to change their PF to remove the console SLC.
Do they take another L on accepting behaviourol remedies for the cloud SLC, when they've doubled down on still wanting structural remedies?
I feel like CMA won't be wanting to take 2 Ls here and will stick to it's guns of wanting divestment. But this is unpredictable, so obviously I'm not saying this is what CMA will for certain.
Personally I don't see how they can still insist on divestment when the console SLC concerns have been removed, because these other platforms (Switch) and services (GeForce NOW, Boosteroid, etc.) that MS are offering 10-year COD deals to, don't have any significant reliance on COD revenue in the first place. And for most of them I expect that to remain that way for the 10 years.
To my knowledge Microsoft have not hinted at foreclosure strategies with COD on these other platforms & services like they clearly have with Sony/PlayStation, which the CMA don't seem to see as an issue. That would suggest Microsoft's foreclosure strategy was only aimed at platforms they felt were a clear threat to them channeling future peak revenue through their own console and service ecosystem, at platforms most direct in competition with Xbox, and the only platform fitting that bill is PlayStation.
Microsoft could probably just argue that they don't see divestment as an option because they would have "no incentive" to remove access of COD from other cloud providers and platforms taking the deal because, if you look at these companies, they are either in VERY different console gaming segments than them (Nintendo), or rely on users purchasing COD anyway to leverage the features of the service (Nvidia), or are so small in users & scale that they will never seriously threaten Game Pass & xCloud for revenue & market share (Boosteroid, etc.). Of course Microsoft won't mention those specifics, but any average person can arrive at those conclusions.
Why remove COD cloud access from some rinky-dink cloud streaming service with 4 million (if that) total subscribers if you know that service can't pair the offering with native versions of the game like Game Pass & xCloud can, don't have a company the size of Microsoft backing & funding that service, don't have all the other complementing 1P software in their service the way Microsoft does, and don't have vertical integration with gaming hardware like their own console brand? Let alone probably won't have the subscriber perks the way users of Game Pass & xCloud would? There's nothing to fear from such a rinky-dink service so yeah, make a 10-year offer, throw them a cheap renewal after that if they want it.
Where it
could get interesting is if the CMA focus on mobile storefronts, because Microsoft hasn't made any offers for COD into Google Play or Apple Arcade, have they? They've already revealed they want their own mobile storefront; they've been salivating for regulators to force companies like Apple to open up their devices so that companies like Microsoft can offer their own mobile storefronts free of charge. Well, if Microsoft wants to make this content available to more people, when are they going to offer at least a 10-year deal for Google and Apple's own mobile storefronts?
I can see that being what the CMA shift to in order to insist on divestiture, and I don't think Microsoft would easily stomach (or stomach at all) making such offers for places that are going to be direct competitors for their planned mobile storefront. So if it comes down to that, they could still be forced to divest COD & associated studios, or the deal gets blocked, or Microsoft walks away from the deal altogether.
Personally I don't think any of this makes up for them dropping virtually all of the console SLC concerns, that was still pretty short-sighted of them IMHO, but I guess there's still a very huge hurdle Microsoft may be forced to confront here just in terms of cloud or possible mobile storefront concerns. If the mobile storefront stuff never once comes up though, then these regulators (goes for all of them) will officially forever be jokes in my eyes.
What if we’re missing the forest through the trees here and Microsoft is shifting to mobile like they’ve been saying? Remember how at gdc there was a blank spot for a new console last week? What if that’s a cell phone ? Like this whole time we’re arguing from a console war perspective but what if Microsoft really is dropping the hardware in the future and wants to become this mobile publisher? They’re already bleeding tons of money on Xbox hardware and are slashing prices 3 years in just to remain barely relativent. Liar Phil has claimed that gamepass is stagnant which I do believe, and software sales have fallen off a a cliff. Maybe we’re all freaking out over nothing?
Would be a hell of a development. Although it doesn't completely absolve the console side of things (it's not like they're going to suddenly cancel Xbox if they were to suddenly release a cell phone), and it doesn't change the fact their "hardware-agnostic" strategy still involves having hardware directly competing against competitors in specific market segments (Sony via through Xbox, potentially Apple & Google via through a phone, even though they also want their mobile storefront ON Apple & Google devices rent-free)...it's interesting to consider.
The problem I have in believing MS shifting to mobile means an end to their consoles, is that they have the money to absorb any Xbox losses, as the business currently operates, and have shown they can do this for 20+ years with little impact on the company as a whole. These acquisitions will have at least SOME positive effect on the Xbox side of things, so if MS can easily absorb and justify any losses, what incentive do they have to drop Xbox?
What I personally thought, was that maybe they would turn Xbox into a PC-like gaming NUC line, and shift it off the traditional console business model altogether. I think that's the only scenario where you can have Microsoft make a "real" pivot to mobile, still keep Xbox around, and where none of this seriously impacts PlayStation long-term because at that point Microsoft have a stronger incentive to make the content available, truly available, on as many devices that can run it, which would obviously also include PlayStation. Sony probably wouldn't still be able to get marketing deals for stuff like COD but getting COD, most other ABK games, Zenimax and XGS games Day 1 (outside of exceptions like Age of Empires, Flight Sim etc. which always seem to prioritize PC first) would make up for that.
