UK CMA Says Microsoft-Activision Deal Will 'Not Result in a Substantial Lessening of Competition'

[Yobo]

You don't know that... You can't make the same conclusion between COD and MS, to Sony and GTA. The vast majority of COD sales are on PS. It CLEARLY doesn't make sense for MS to remove the title from the platform which produces the most revenue.. In the case of GTA... PS will still be the platform which produces the vast majority of revenue for the title... so Sony could very easily theoretically make GTA exclusive and make it work for them.

And Xbox's market share is less than 1/3 of Playstation...

GTA5 has sold 175 million over its life time. Even if only 20% of that came from Xbox plus Microtransactions you are looking at well into the billion dollar range in revenue. Based on the CMA report, they calculated that X billion for Microsoft in losses is enough to say they won't engage in foreclosure

And heck, no way Sony is giving up a billion anyway

Plus Sony themselves have precedent with Destiny how they treat large popular franchises.

 

[Yobo]

There you go, that's what I'm asking. We don't have to agree but let's have an actual discussion.

Here's the thing. The Activision purchase would put MS slightly ahead of PS in terms of revenue. At that point Sony would be behind and could use that argument, much like MS is using it now. Over time it would erode their market position and they could claim an acquisition of that size is needed.

Here's the baffling thing, though, and it's an argument xbox shills constantly use whenever the deal hits a bump. The regulators aren't here to protect a company's revenue, they're here to protect the consumer. What baffles me is how is eliminating half of the entire console market benefiting consumers. Everyone's focused on COD but this acquisition, much like the Zenimax one, comes with a lot more IPs. IPs that will go exclusive, much like Zenimax ones.

Even if Sony's forced to pay double of what T2 is worth, that's 40 billion. It's well within their means. There's more to resources than pocket money. Debt is frequently used for things like this.

The problem isn't coming up with money, it's would it really be worth it. Yeah, they'd have to jump through a lor of hoops to get it approved. Hell, GTAV is the biggest entertainment product in history if I recall. I agree completely, this would be a hard sell, even with MS owning Activision. But money is not the issue if it's make or break for Sony.

Yes and response to acquisitions by competitors is a valid argument to regulators

 

[Yurinka]

Regardless, now they know what they are up against and if they are not dumb they should go all in on securing the future of PlayStation. They are clearly exposed to MS buying up their partners and chocking them out long term.

In the now unlikely event that MS fails to acquire ABK they'll go for EA or for a combination of other smaller publisher.

Independently if they are allowed to acquire ABK or not, both Sony and MS announced that they will continue acquiring. But companies to be acquired also must want to sell and to sell to them, which is very unlikely.

The CMA saw a more complete picture with extra data of the console market and CoD data and the potential ABK/CoD console exclusivity effects in the console market, and now they think the acquisition won't negatively affect the competition.

We also have to consider that PlayStation is the clear market leader in consoles in many metrics, also including game subs. PS is also growing and investing hard in all areas, their future is more than secured.

In the case of Sony, they prefer to grow in a different way: to make their existing teams bigger, to acquire studios who already worked for them, or talent expecienced on creating top tier big hit IPs instead of buying big publisher/IP names. They are also buying support studios, and also teams who can help them bring their IPs to PC, mobile or the cinema.

And what would Sony offer? Since you're the business expert that doesn't understand how an acquisition works, enlighten me.

As I remember the multiyear budget that Sony has for acquisitions+investments+Sony stocks repurchases has a remaining $5B-$7B to spend until the end of the next fiscal year (March 2024).

Please that this is for the whole corporation, so only a part of this will be for gaming and only a part of this will be for acquisitions. Being lucky Sony may use around half of that budget on gaming acquisitions.

The market cap of Take 2 is $20B. If desired Sony could increase that budget (maybe in March 2024, for the next period) or pay with other stuff, but as of now it isn't the case.

As of now Sony couldn't offer a decent offer for even the 51% of the company. Sony can't buy Take 2 or EA, at least in the next year. And looking at their acquisitions and growing strategies, they aren't interested on them either. Sony would prefer to invest instead on new studios with key talent behind the main Take 2 and EA hits, and giving them a 2nd party game before considering to acquire them or not.

 

[Yobo]

Independently if they are allowed to acquire ABK or not, both Sony and MS announced that they will continue acquiring. But companies to be acquired also must want to sell and to sell to them, which is very unlikely.

The CMA saw a more complete picture with extra data of the console market and CoD data and the potential ABK/CoD console exclusivity effects in the console market, and now they think the acquisition won't negatively affect the competition.

We also have to consider that PlayStation is the clear market leader in consoles in many metrics, also including game subs. PS is also growing and investing hard in all areas, their future is more than secured.

In the case of Sony, they prefer to grow in a different way: to make their existing teams bigger, to acquire studios who already worked for them, or talent expecienced on creating top tier big hit IPs instead of buying big publisher/IP names. They are also buying support studios, and also teams who can help them bring their IPs to PC, mobile or the cinema.


As I remember the multiyear budget that Sony has for acquisitions+investments+Sony stocks repurchases has a remaining $5B-$7B to spend until the end of the next fiscal year (March 2024).

Please that this is for the whole corporation, so only a part of this will be for gaming and only a part of this will be for acquisitions. Being lucky Sony may use around half of that budget on gaming acquisitions.

The market cap of Take 2 is $20B. If desired Sony could increase that budget (maybe in March 2024, for the next period) or pay with other stuff, but as of now it isn't the case.

As of now Sony couldn't offer a decent offer for even the 51% of the company. Sony can't buy Take 2 or EA, at least in the next year. And looking at their acquisitions and growing strategies, they aren't interested on them either. Sony would invest instead on new studios with key talent behind the main Take 2 and EA hits.

$5 billion - $7 billion is the minimum they need to attempt to spend because thats what's been stated to shareholders for Sony's investment strategies. Otherwise shareholders will see that as not fulfilling targets Sony have laid out

It really means nothing about whether Sony can go over that amount for the right purchase. Sony would just need buy in of their board. If they issue more than 20% of stock in the purchase they would need shareholder approval.

Any hypothetical purchase of a company the size of Take Two would be done with a mix of cash, loans and shares

Also acquisitions aren't paid up front. Around 50-60% will come upfront with the rest staggered over a few years

 

[Yurinka]

$5 billion - $7 billion is the minimum they need to attempt to spend because thats what's been stated to shareholders for Sony's investment strategies. Otherwise shareholders will see that as not fulfilling targets Sony have laid out

No, this is the maximum they could spend because it's the available money in the budget they said their shareholders that they had created for the acquisitions + investments + stock repurchases (not only gaming, and not only acquisitions) made during that period.

At the end of the fiscal year, they could say their investors that reevaluated the budget to increase it, or to wait until the period of the budget is over (end of March 2024) and then maybe create a bigger budget for the next multiyear period.

But as of now, Sony "can't afford"/doesn't plan to acquire right now companies of the size of Take 2, EA, Netease, Garena, Nintendo, Bandai Namco, Roblox or Nexon. Maybe even Capcom.

They 'could afford' acquire this year something of the size of Ubisoft, CD Projekt, Paradox, GungHo, Sega, Kadokawa, or maximum something like Square Enix. But again, they don't seem to be interested on acquiring big names of existing IPs, but instead create talent to create new IP or to support their existing teams.

Any hypothetical purchase of a company the size of Take Two would be done with a mix of cash, loans and shares

Also acquisitions aren't paid up front. Around 50-60% will come upfront with the rest staggered over a few years

If desired they could pay using loans or shares, but what Sony said to their shareholders is that for the current multiyear period, all Sony acquisitions, investments and stock repurchases are paid with that budget. They made it for that.

Regarding Sony shares they are in a process of buying them back to protect themselves against potential hostile takeovers and reinvest in the company, so even ignoring the budget I highly doubt they'd pay something partly using Sony shares.

And even if pay in multiple years, at least in the case of Bungie they take the full money from that budget. They paid the 100% of the Bungie stocks value ($2.4B) when the acquisition was completed, and left for the next years retention bonuses and some other acquisition related costs ($1.3B). All these $3.7B were assigned to that budget.

 

[Nhomnhom]

No, this is the maximum they could spend because it's the available money in the budget they said their shareholders that they had created for the acquisitions + investments + stock repurchases (not only gaming, and not only acquisitions) made during that period.

At the end of the fiscal year, they could say their investors that reevaluated the budget to increase it, or to wait until the period of the budget is over (end of March 2024) and then maybe create a bigger budget for the next multiyear period.


If desired they could pay using loans or shares, but what Sony said to their shareholders is that for the current multiyear period, all Sony acquisitions, investments and stock repurchases are paid with that budget. They made it for that.

Regarding Sony shares they are in a process of buying them back to protect themselves against potential hostile takeovers and reinvest in the company, so even ignoring the budget I highly doubt they'd pay something partly using Sony shares.

And even if pay in multiple years, at least in the case of Bungie they take the full money from that budget. They paid the 100% of the Bungie stocks value ($2.4B) when the acquisition was completed, and left for the next years retention bonuses and some other acquisition related costs ($1.3B). All these $3.7B were assigned to that budget.

Sony: "I guess we'll just have to let PlayStation get choked out because we didn't set aside enougth money for consolidation wars. Well, at least we have other profitable divisions now. If it dies, it dies."

 

[Nhomnhom]

Crash, spyro, thps re irrelevant ips in grand view. Horizon s bigger than those 3 combined. Warcraft s pc ip. Irrelevant for consoles.
Cod s huge get.
Tes, fallout, diablo re big gets. But those games release once a decade. While selling 50% just on ps platforms. I dont see them making service games exclusive like overwatch, diablo.

Will this impr9ve ms position and sales? Absolitely.
Will this destroy sony? No.
WHen ll sony be in big danger? If they remain passive and ms continue buying.
But i dont see ms buying mich more. Maybe one pub like sega in japan. They still have to think about cost. They literaly fired 10k people so they can absorb AB people.

And we re talking about ms here with their mismanagement. They destroyed halo along with 343. CD s helping with perfect dark. Eidos s helping with fable. Lucid s helping rare with sea of thieves.

Sony invested a lot in last decade in first party content. And they look like they wont stop.
Spiderman wont end like mlb. They own movie right. Huge leverage. If disney wants to be budy bud with sony they wont budge about videogame, somwthing they have no interest in.

Very few Sony IPs are that much more relevant than Crash, Spyro and THPS. Sony is done for, long term with, without some massive answers to MS moves.

Just like you know it, MS also knows that if they keep buying, maybe even just one more big publisher, that might be it for PlayStation. Why would they stop?

There is a limit to how incompetent MS can be and Sony isn't looking that hot right now with so many Horizon games being made, Factions nowhere to be seen, lukewarm PSVR2 release, very few games announced and many GaaS on the way.

 

[Bryank75]

I'd just like to say that the budget everyone is talking about is from almost 3 years ago...

Things change and I am sure it seemed like a good amount at the time considering the acquisition of Zenima was 7.5 billion.

When considering the future of their most important division, I don't think some arbitrary budget from several years ago will stop them acting....

That is like imposing significant handicaps on yourself, when facing a much larger opponent... especially in a key moment where MSFT is tied up with regulators and there are possibly less large companies out there to offer comparable amounts.

Waiting till this budget has run its course offers Microsoft and others time to recover, an extra year for MSFT, gives them about 50 billion in profit from their various monopolies and businesses.

There has to be a bit of awareness of the overall picture.

 

[Swift_Star]

Regulators will not allow Sony... the market leader, to purchase a company the size of Take Two.

And Sony can't afford to pay what Take Two would demand. Take Two does not want to be bought in the first place, unlike Activision ... which makes it a VERY different proposition entirely. Sony wont risk an acquisition knowing full well that it likely wouldn't pass regulatory scrutiny.

Japanese companies make far more sense, and are within reasonable price ranges, and are far more likely to pass.

Source? With MS having ABK, both will have the same marketshare, so… sorry to burst your bubble. It’ll happen and you’ll cry.

 

[Swift_Star]

TAKE. TWO. WILL. NOT. SELL. FOR. WHAT. SONY. WOULD. OFFER.

Source? Your desperation shows because you know they would and now you are screaming in a forum in hopes it doesn’t happen

 

[Remij]

Source? Your desperation shows because you know they would and now you are screaming in a forum in hopes it doesn’t happen

I wish Sony would buy Take Two... Like I give a shit.. what are they going to do... release GTA or RDR on PC a year or more later? ...oh no!

You guys don't know me as well as you think you do!

 

[Airbus]

This curent trend of taking out third party publishers sucks so bad

WIsh i can go back to PS3/360 era where every third party publishers are available for everyone and the console manufacturer focuses on their own first party studios

 

[Nhomnhom]

This curent trend of taking out third party publishers sucks so bad

WIsh i can go back to PS3/360 era where every third party publishers are available for everyone and the console manufacturer focuses on their own first party studios

Except for GTA expansions that were timed exclusives for Xbox and Gears of War games that were all paid Xbox exclusive and Bioshock and Mass Effect 2 and TES Oblivion and so on.

Xbox had zero focus on their own internal studios during the 360 days it was all mostly moneyhats. Ironic that the reliance on the same strategy might just end up being the thing that dooms Sony.

 

[Swift_Star]

Except for GTA expansions that were timed exclusives for Xbox and Gears of War games that were all paid Xbox exclusive and Bioshock and Mass Effect 2 and TES Oblivion and so on.

Xbox had zero focus on their own internal studios during the 360 days it was all mostly moneyhats. Ironic that the reliance on the same strategy might just end up being the thing that dooms Sony.

Except all you said contradicts with facts since Sony have 100% focus on their internal studios.

 

[Johnic]

I'd just like to say that the budget everyone is talking about is from almost 3 years ago...

Things change and I am sure it seemed like a good amount at the time considering the acquisition of Zenima was 7.5 billion.

When considering the future of their most important division, I don't think some arbitrary budget from several years ago will stop them acting....

That is like imposing significant handicaps on yourself, when facing a much larger opponent... especially in a key moment where MSFT is tied up with regulators and there are possibly less large companies out there to offer comparable amounts.

Waiting till this budget has run its course offers Microsoft and others time to recover, an extra year for MSFT, gives them about 50 billion in profit from their various monopolies and businesses.

There has to be a bit of awareness of the overall picture.

Thankyou.gif

People are too focused on 5 billion. It's not a budget set in stone and it's not a budget they have to go with until 2024. These companies have regular meetings where each aspect of a business is reviewed and restructured if needed. They can outright have a meeting today and decide to increase the budget immediately, starting tomorrow.

Especially in cases such as this where their main business is getting stepped on.

 

[Deleted member 417]

There's no need for Sony to pick up 3rd parties, Microsoft are not a threat to Sony.

Microsoft are doing all of us a favour; taking the cancerous rot of the industry and consolidating it into one place. CoD, Diablo, Overwatch, Halo, THPS and Gears are all grotesque aberrations of their former selves, consumed by P2W, lootboxes and DRM-in-all-but-name.

You know it's true.

 

[Yurinka]

I'd just like to say that the budget everyone is talking about is from almost 3 years ago...

Things change and I am sure it seemed like a good amount at the time considering the acquisition of Zenima was 7.5 billion.

When considering the future of their most important division, I don't think some arbitrary budget from several years ago will stop them acting....

That is like imposing significant handicaps on yourself, when facing a much larger opponent... especially in a key moment where MSFT is tied up with regulators and there are possibly less large companies out there to offer comparable amounts.

Waiting till this budget has run its course offers Microsoft and others time to recover, an extra year for MSFT, gives them about 50 billion in profit from their various monopolies and businesses.

There has to be a bit of awareness of the overall picture.

Yes, as I remember it was a budget of -back then $18B- to spend in a 3 years period or so that ends next year.

Next year Sony will be in a different context: with more money, in a growing trend, after the Zenimax and ABK acquisitions and with a new president who particularly wants to invest in media (games, movies and music).

If they make a new budget for the next 3 years or so pretty likely will be bigger, or to don't make a similar budget for the next period. Or they could review the existing one before it expires.

Sony: "I guess we'll just have to let PlayStation get choked out because we didn't set aside enougth money for consolidation wars. Well, at least we have other profitable divisions now. If it dies, it dies."

No, it's more like this:

Sony: "We more than double in the main metrics our direct competitor, we don't give a fuck if they get 1% or 2% of console market share with the ABK acquisition because we already invested in other things that will help us grow more than that without needing to waste dozens of billions. "

Nobody is 'choking' PS and these few acquisitions we saw in recent years represent a tiny portion of the market. ABK, Zenimax, Bungie and Zynga are maybe the only top 50 companies acquired in recent years, so most of the top 50-100 biggest companies of gaming are there same and the top players only have a small market share in the gaming industry.

Sony continues and will continue in the top 2 in gaming and top 1 in consoles. Is not that they are in a hurry for acquisitions or something like that. MS spends like $100B on acquisitions and almost give away their AAA games because they are desperate for attention and have no idea on how to compete against Sony, not because it makes sense.

 

[Satoru]

Yes, as I remember it was a budget of -back then $18B- to spend in a 3 years period or so that ends next year.

Next year Sony will be in a different context: with more money, in a growing trend, after the Zenimax and ABK acquisitions and with a new president who particularly wants to invest in media (games, movies and music).

If they make a new budget for the next 3 years or so pretty likely will be bigger, or to don't make a similar budget for the next period. Or they could review the existing one before it expires.


No, it's more like this:

Sony: "We more than double in the main metrics our direct competitor, we don't give a fuck if they get 1% or 2% of console market share with the ABK acquisition because we already invested in other things that will help us grow more than that without needing to waste dozens of billions. "

Nobody is 'choking' PS and these few acquisitions we saw in recent years represent a tiny portion of the market. ABK, Zenimax, Bungie and Zynga are maybe the only top 50 companies acquired in recent years, so most of the top 50-100 biggest companies of gaming are there same and the top players only have a small market share in the gaming industry.

Sony continues and will continue in the top 2 in gaming and top 1 in consoles. Is not that they are in a hurry for acquisitions or something like that. MS spends like $100B on acquisitions and almost give away their AAA games because they are desperate for attention and have no idea on how to compete against Sony, not because it makes sense.

Man, you really are trying to get a job at Microsoft with so much bullshit per square metre

 

[Loy310]

CoD, Diablo, TES, Fallout, Doom, Warcraft, Overwatch, THPS, Crash, Spiro and so much more. MS can just time it so PlayStation gets cut out of those games come next gen and PlayStation is done for. There is nothing that stops MS from also playing the moneyhat exclusive deals the moment they get a better market share as well we saw that with the 360.

MS counter to Xbox having no market share in Japan is to push Sony out of NA, it's rigth there in their recent public declarations trying to turn this into a USA vs Japan/"America first" issue. That's the main advantage Sony always had over Xbox (on top of Xbox weak internal stable of studios).

MS gaming division is now so big that they could change direction away from Gamepass if it fails and still beat Sony at their own game of exclusive content.


They never proved that against a company trying to buy up the market and cutting them out of third party support.Not a single PlayStation console would have been successful without third party support, Sony is not Nintendo. You don't seem to be thinking long term.

Sony will fumble at some point and Horizon, Death Stranding and GoT sure as hell ain't going to save them. Spider-man will end upjust like MLB if MS gets a bigger market share.

This sounds like bullshit fantasy. Sony wont be MS only issue, they will have to contend with apple and google if they start gobbling up this that and the other. The games you listed drop once a generation other than COD correct? Its 10 games in xbox vs hundreds of exclusives on PS.

MS might be the 1 that is done for if any if these devs thin out or if any of these games miss.

 

[SSfox]

If this goes through, Sony better start thinking about Buying Take 2 , Capcom and SE