Support NeoGAF

[Jet Set Willy]

PC also has walled gardens?
Windows / Linux / MacOS are three different gardens.

No they're not! You have a PC and you can install Windows or Linux on it, or even both. You can even run Linux software directly within Windows via Microsoft's WSL. And you can run Windows software within Linux via WINE and Proton.

 

[DenchDeckard]

Yeah, both of these companies are making complete fools of themselves but I do feel that cod is not irreplaceable. Infact, I would love an incredible battlefield game or Titan fall 3. Or just someone to come along with something amazing. Maybe Sonys game they are making with those ex treyarch guys smash it.

When I look at twitch etc viewers seem pretty level between fortnight, modern warfare 2, apex, Cs go, overwatch 2, valorant. So I think competition is there.

It's deffo getting spicy though and MS are gonna have to bend over and make some concessions to get this through which I think they will do on COD as they want King more than anything.

 

[DarkMage619]

Can somebody tell me how this acquisition benefits gamers and the industry? I'm starting to hear it alot but how exactly? Its like people read shit on twitter and regurgitate it without even knowing or understanding what they are saying. It only benefits Microsoft. That's it!

It's pretty obvious. This acquisition allows customers who are not opposed to Xbox on principle to play brand new games without having to rely on traditional retail. I can play the new CoD without having to pay $70. That is clear benefit to Xbox customers. The deal does not benefit Sony specifically but it absolutely benefits normal non fanatical customers.

But why don't Microsoft innovate more and create games themselves instead of buying multiplat ips? Isn't that better for the industry instead of what they're doing now? Why don't Microsoft create a new fps ip to go against cod?

Why won't Sony? They are more than capable of creating a new an innovative FPS. MS still makes FPS so can Sony. Sony is not the entire industry. There is nothing illegal to this acquisition and arguments that just because Sony doesn't benefit from it that it's bad is silly.

 

[Pelta88]

Like the CMA? lol

 

[plip.plop]

Let's all be honest about this topic. Sony fans are actually mad at Sony in the PS4 era for not completely stopping MS in the console space. Sony dropped MS's ass hard that gen and instead of stepping on their throat to end this, they let them get up. Now MS is throwing back and landing some of their own haymakers.
To be for or against this deal is noise.

 

[ChuckeRearmed]

Sony dropped MS's ass hard that gen and instead of stepping on their throat to end this, they let them get up

Sony tried to kill Xbox, but Microsoft simply decided to finance Xbox more and Sony realized that Microsoft was not going anywhere and now was backing Xbox for real. Sony was close and even Satya questioned Phil at one point regarding why were they in gaming. Sony clearly tried to kill Xbox but they failed in 2014, despite being close. They decided to do that at the next gen launch.
By the 2020
* Sony had deals with every big third party IP - GTA, FIFA, NBA, COD, FF14
* Sony had various moneyhats with third parties that they have announced early on - Deathlop, Ghostwire, Forspoken, FF16, KOTOR. They were even trying to get Starfield.
* Sony expected a very good launch lineup and the first years - Spider-man, Returnal, R&C, GT7, Forspoken, FF16, Horizon, GoWR

But they could not predict COVID, they could not predict Microsoft spending big money on acquisitions.

* So all the games failed to be delivered on time (games like Forspoken, GoWR, GT7, Horizon were delayed)
* They failed to sold tons of consoles fast due to shortage
* Microsoft's decision to provide a cheaper console paid off
* Microsoft's acquisitions changed the market dynamics and so on

 

[bitbydeath]

They do?

AFAIK you are allowed to install anything on your PC from everywhere you download it.

Depends on which one you're in, they all have their own exclusive apps.

 

[bitbydeath]

No they're not! You have a PC and you can install Windows or Linux on it, or even both. You can even run Linux software directly within Windows via Microsoft's WSL. And you can run Windows software within Linux via WINE and Proton.

You're saying you can install different walled gardens on it. The OS is what makes it a walled garden.

 

[The_Mike]

Depends on which one you're in, they all have their own exclusive apps.

But a garden would mean you could only use the Ms store.

You can install any store you want, so it's more open than any other platform

 

[bitbydeath]

But a garden would mean you could only use the Ms store.

You can install any store you want, so it's more open than any other platform

Can you install the Mac "App Store" on Windows?

 

[Jet Set Willy]

You're saying you can install different walled gardens on it. The OS is what makes it a walled garden.

No, I'm saying you can literally, and officially, run Linux software on Windows.

 

[bitbydeath]

No, I'm saying you can literally, and officially, run Linux software on Windows.

Can you run all Windows software on Linux or does Steam limit what can be played?

 

[Jet Set Willy]

Can you run all Windows software on Linux or does Steam limit what can be played?

You don't understand the definition of a walled garden. In your view, everything is a walled garden. Because you can't play Linux software on a PS5, or a toaster, and Linux is the most open platform of the lot.

Windows RT was a walled garden, Windows 11 is not. It is an open platform that allows you to run all compatible executable code, and not only the code that MS approves.

 

[bitbydeath]

You don't understand the definition of a walled garden. In your view, everything is a walled garden. Because you can't play Linux software on a PS5, or a toaster, and Linux is the most open platform of the lot.

Windows RT was a walled garden, Windows 11 is not. It is an open platform that allows you to run all compatible executable code, and not only the code that MS approves.

You could argue any single platform is completely open to the content that exists on that platform. Consoles wouldn't be a walled garden with that logic either.

 

[The_Mike]

Can you install the Mac "App Store" on Windows?

No, because they are two different systems.

Also, pretty lowballing literally take the only unsupported store as evidence.

Ask apple why they haven't made their store available on pc.

You can install steam, origins, epic launcher, gog launcher, any exe launcher free of your choice.

But no, Windows is as closed as xbox and PlayStation because Apple hasn't made their store available on Windows.

 

[Jet Set Willy]

You could argue any single platform is completely open to the content that exists on that platform. Consoles wouldn't be a walled garden with that logic either.

And here we are again, where you fail to properly read my post! Any executable code, whether it's approved by MS or not makes it an open platform, not a walled garden.

Please, read the definition of a walled garden/closed platform, and stop this nonsense. MS does not purposefully restrict what you can run on Windows, it's an open platform. https://en.m.wikipedia.org/wiki/Closed_platform

 

[Three]

But no, Windows is as closed as xbox and PlayStation because Apple hasn't made their store available on Windows.

Nobody is saying Windows is as closed as Xbox or PlayStation. He just told you that "PCs also have walled gardens" because you said this

Consoles are allowed to have a wallet garden.

Oh no, Microsoft having a meeting app in their own OS, the horror.

A walled garden is any ecosystem or platform that prevents or restricts others and can be platforms within a platform, meaning windows can be a walled garden too.

Office for example had a "walled garden" with the document format. Apple have it with their store. There's DirectX. A walled garden isn't just a device.

 

[PaintTinJr]

And here we are again, where you fail to properly read my post! Any executable code, whether it's approved by MS or not makes it an open platform, not a walled garden.

Please, read the definition of a walled garden/closed platform, and stop this nonsense. MS does not purposefully restrict what you can run on Windows, it's an open platform. https://en.m.wikipedia.org/wiki/Closed_platform

What is your view on DirectX - which provides Windows' software only using the latest version of DIrectX with semantically the same walled garden protections as MacOS/iOS apps?

The CMA in their phase 1 response directly mentioned the cadence of patching of graphics features for Windows Desktop - that Microsoft don't license for 3rd party servers, but can/do use those updates with Azure - compared to Windows Server that can be licensed, and the difficulty of 3rd parties using linux instead to have games working correctly at launch (or when the API changes) because of Proton/Wine, presumably the wrapper-ing of of an ever changing closed standard DirectX API controlled by Microsoft exclusively, hence the CMA's claim Microsoft has a +95% share of PC gaming via WIndows.

 

[bitbydeath]

And here we are again, where you fail to properly read my post! Any executable code, whether it's approved by MS or not makes it an open platform, not a walled garden.

Please, read the definition of a walled garden/closed platform, and stop this nonsense. MS does not purposefully restrict what you can run on Windows, it's an open platform. https://en.m.wikipedia.org/wiki/Closed_platform

Walled Garden

a restricted range of information to which subscribers to a particular service are limited.

There's no mention of approvals in the definition? However the code requirements can be seen as a form of an approval gateway.

 

[DarkMage619]

Walled Garden

There's no mention of approvals in the definition? However the code requirements can be seen as a form of an approval gateway.

That's quite a stretch. To think that Windows is a walled garden because you can't run non Windows executable code on it is a definition no one thinking of the standard definition would come up with. You can open and run whatever software store you want on Windows and it doesn't require MS approval first. Windows is not an example of a walled garden. Apple IOS is a real example.

 

[CatLady]

I'm almost at the point where if this gets blocked I hope MS goes on a 70 billion dollar coke bender, buying up smaller studios left and right that I actually give a shit about. ABK doesn't mean much to me outside of being a moneymaker for MS to dump into things I like, as honestly Diablo is the only thing for me from the entire purchase.

Just go ahead and spend $70b on Eidos-level studios over the next few years, now we're talking my language. Oh yeah, go ahead and pick up Squeenix from the corner store as an afterthought.

I would so love that. If the A/B/K deal fell through Xbox/MS would have $65B to get Asobo, Crystal Dynamics, Eidos, Neon Giant, buy Square and make FFVIIR-3 Exclusive, then pay whatever it takes to get an extended marketing contract for CoD and finally moneyhat the hell out of AAA that looks even vaguely appealing.

I couldn't care less about A/B/K the only IP they have that I like is Singularity. I only want the deal to go through because Ryan and Sony have been such despicable, entitled and demanding assholes and because Jimbo's meltdown would be epic.

 

[Jet Set Willy]

Walled Garden

There's no mention of approvals in the definition? However the code requirements can be seen as a form of an approval gateway.

I swear at this point you're just trolling.

A closed platform, walled garden, or closed ecosystem[1][2] is a software system wherein the carrier or service provider has control over applications, content, and/or media, and restricts convenient access to non-approved applicants or content. This is in contrast to an open platform, wherein consumers generally have unrestricted access to applications and content.

Does MS have control over Windows applications? No. Do they have control over the content? No. Do they restrict convenient access to non-approved applicants or content? No. Do Windows users have unrestricted access to applications and content? Yes.

Anyone can port anything they like to Windows and MS can't and won't do a damn thing about it. That's the difference. Apple Arcade software on Windows? Nothing stopping Apple doing that. Game Pass cloud gaming app on iOS? Nope, and even if it did it would have to go through a bunch of approvals, be sold via the Apple app store, along with any in-app transactions, with Apple getting a cut of it all.

 

[GhostOfTsu]

Sony tried to kill Xbox, but Microsoft simply decided to finance Xbox more and Sony realized that Microsoft was not going anywhere and now was backing Xbox for real. Sony was close and even Satya questioned Phil at one point regarding why were they in gaming. Sony clearly tried to kill Xbox but they failed in 2014, despite being close. They decided to do that at the next gen launch.
By the 2020
* Sony had deals with every big third party IP - GTA, FIFA, NBA, COD, FF14
* Sony had various moneyhats with third parties that they have announced early on - Deathlop, Ghostwire, Forspoken, FF16, KOTOR. They were even trying to get Starfield.
* Sony expected a very good launch lineup and the first years - Spider-man, Returnal, R&C, GT7, Forspoken, FF16, Horizon, GoWR

But they could not predict COVID, they could not predict Microsoft spending big money on acquisitions.

* So all the games failed to be delivered on time (games like Forspoken, GoWR, GT7, Horizon were delayed)
* They failed to sold tons of consoles fast due to shortage
* Microsoft's decision to provide a cheaper console paid off
* Microsoft's acquisitions changed the market dynamics and so on

What kind of fan fiction is this? Sony was going to kill Xbox in 2014 when they were almost bankrupt after the PS3 generation and Xbox had the COD marketing for the next 2 years and FIFA too? Xbox also have Madden to this day? FF14 was rejected by Xbox. FIFA had exclusive modes on Xbox one so it's Xbox that wanted to kill Playstation. They also had Titanfall by EA.

And you think Sony were going to kill Xbox in 2020...by releasing their own exclusives? Nobody cared about trash like Deathloop and Ghostwire. Both came and went and flopped. Cyberpunk was bigger than all Sony first-party and Xbox had the marketing too.

KOTOR was announced in 2021 when the gen had already started. A remake is not gonna kill Xbox.

Go back to Xboxera and stay there with your persecution complex. We're in the real world here.

Confirmed: FIFA 15 Ultimate Team Legends is Xbox exclusive

FIFA 15's place-holder box art leaked yesterday, and it featured a sticker that suggested the game's Ultimate Team Lege…

www.vg247.com

 

[CatLady]

Yes, soon you'll be able to play Call of Duty WWIII with your habibis in Saudi Arabia. Both the Xbox consoles & the game are country exclusives now.

There's always Rio de Janero. I hear it's great at carnival time.

 

[ReBurn]

There's always Rio de Janero. I hear it's great at carnival time.

Until it gets hit by a bug meteor

 

[CatLady]

Until it gets hit by a bug meteor

Sounds awful, what is a bug meteor?

 

[SenjutsuSage]

You know Sony doesn't own the CMA right?

You know you can own more than one videogame console and enjoy them all right? People who want this deal to go through want what's best for gaming. And what's best for gaming is more competition and a stronger, more competitive Xbox to put pressure on Playstation. This deal does that. What Microsoft is doing with these acquisitions like Bethesda and now with Activision Blizzard is they're giving Xbox customers guarantees they can take to the bank. Whether people are willing to admit it or not, everybody knows that for many years the greatest weapon in Sony's arsenal has always been their market power and the ability of playstation to cast doubt in the minds of Xbox gamers. One minute a game that was expected to be on both Playstation or Xbox can suddenly end up as a Playstation exclusive. This is something I accept as a gamer, that it comes with the territory, so I'm the type of gamer who can't risk not having every console to protect myself. Xbox securing big guarantees that major games will always be on Xbox and always day one in Game Pass is a major thing for the industry, even when they're not exclusive. This is what has made Playstation such a big deal for years. A Playstation console generally means guarantees. It's good that Microsoft is doing more to create more guarantees for Xbox.

You never know what game might skip Xbox at any given moment, so trying to limit that list as much as possible is important.

 

[CatLady]

There's a few, I don't bother with all this nonsense but Red Dragon is up there.

Probably for the best if he remains unknown.

ZubyTech & King Thrash

What about:
RedTechGaming? It seems like I've heard he's a big Sony Fanboy, but I may be mistaken.

 

[GhostOfTsu]

ZubyTech & King Thrash

What about:
RedTechGaming? It seems like I've heard he's a big Sony Fanboy, but I may be mistaken.

Who are these people with fake names like Red Dragon and whatever the fuck? Those are not paid journalists with a following on big media.

An anonymous twitter account is all you can find? So many shills. Sony is busy

 

[CatLady]

I advise all of us to watch that Hoeg law video.. he really breaks down how pathetic Sonys arguments are here.

We are in for a wild ride. Its going to be one for the ages.

I watched it yesterday and it was flat out hilarious. At times he couldn't continue for a minute he was so shocked and laughing at the stupidity of so many of the arguments and assertions. It's 3 hours long and I watched the entire thing it was so entertaining.

 

[ChorizoPicozo]

It seems like a deal would be a lose-lose situation and viceversa

 

[feynoob]

MS response document by Idas.
Its a long post, so I need to break it down.

 

[Markio128]

I wish I had something meaningful to say on the subject.

 

[feynoob]

Part 1 (Idas)

Well, I finally read the whole response from MS (111 pages). So, long post incoming

I think that it is quite good. For starters, the tone is very different from the first one, where you could feel that they were annoyed by the decision.

From pages 13 to 69 everything is about Call of Duty: There is an insane amount of work on those pages. :O I really like how they dissect piece by piece every potential issue. And the amount of data presented is staggering.

A paragraph that I liked in this case: MS is not denying the relevance of COD, but the data doesn't automatically show that COD is the only game to attract gamers to a console or that losing it would become critical (Page 25)

While these assertions are central to the case for referral, they are not supported by any evidence. Instead, the Phase 1 Decision relies on high level points such as "CoD is currently one of the largest game franchises", "has a high level of awareness amongst gamers" and "has been consistently successful for nearly a decade". These points may all be true (as they are equally for other popular games), but do not show that the franchise is critical to attracting gamers to a console platform, nor that the loss of that one franchise would foreclose the console in question from the downstream market. No evidence has been provided to suggest that other Activision titles have any degree of market power. As above, the share of these titles is minimal ([0-5]% or less).

From pages 70 to 90 everything is about Gamepass: I think that they offer good arguments, specially the ones about ABK (extensively) being against subscriptions if there is no deal. Therefore, saying that without the merger all competitors could potentially have access to all the ABK content doesn't make a ton of sense because all the evidence points against that: without the acquisition Activision is not interested in subscription services (not even their own).

From pages 91 to 111 everything is about cloud gaming: I thought that it was the most complicated issue but they again present a ton of (internal) data, in this case to downplay cloud gaming as viable option in the short - medium term. The ecosystem theory of harm is counter-argued by also downplaying the importance of Azure for xCloud or the lack of economic incentive to 'block' similar services in the future.

All in all, a very good answer with tons and tons of data.

Anyway, I took notes of things that I believe are new and interesting:

Specific notes from the CMA

The page for the case now includes a notice that is not present in other mergers in Phase 2 (I guess that they felt some pressure):

Evidence

The publication of the evidence of any party on the CMA's webpages does not indicate in any way endorsement by the CMA of the views expressed in the evidence or acceptance of that evidence. Publication in this way is designed to assist public understanding of the issues.

On the other hand, it looks like they'll share more responses from other third parties:

The CMA received a large number of submissions from the public, which it is still in the process of reviewing, and which it will take into account, where appropriate, in the course of its merger investigation.

The future Universal Store is a risky move (pages 12-13)

As Mr. Spencer explained because of "[X]." In particular, the concept of a next- generation game store that operates across a range of devices ("Universal Store") is risky… Moving consumers away from the Google PlayStore and Apple AppStore on mobile devices will require a major shift in consumer behaviour. Microsoft hopes that by offering well-known and popular content, gamers will be more inclined to try something new. But this is far from guaranteed and also depends on proposed regulations and legislation in the U.S., and around the world, that would require Apple and Google to make their platforms and app stores more open to third-party stores and commerce platforms. As such, in seeking approval from its Board of Directors as a public company, Microsoft leadership could [X]. Nevertheless, as Mr. Spencer confirmed, Microsoft will measure the strategic success of the Merger on [X].

MAU for PlayStation and Xbox (page 35)

Publicly available data suggests that PlayStation MAUs in 2021 are more than double Xbox MAUs (107 million versus [X] million).

Steam Deck is a new console for MS (page 38)

Steam has launched a new console without Call of Duty: The Steam experience is also directly relevant to console, as Steam has recently launched a new console, the Steam Deck, without Call of Duty. The Steam Deck is a handheld console which has a docking station that allows it to be plugged into a television or used as a PC. 141 The console runs on a Linux-based operating system and allows gamers to access Windows PC games through the Steam digital storefront. In the words of Valve, "[t]he Proton translation layer allows most Windows games to run with equal or better performance on Steam OS without requiring game developers to do any heavy porting work to get their games running". This means that there are thousands of games available to play on the Steam Deck – and as explained above this does not currently include Call of Duty. Valve has promoted the Steam Deck using a range of other popular titles (including a number of Sony first-party titles) – see Figure 32 below.

 

[feynoob]

Part 2 (Idas)

The extreme levels of monetisation used by ABK regarding COD (pages 39-40)

Even though Activision has faced a strong incentive to monetize every form of exclusivity which makes sense for Call of Duty, there has been no foreclosure: Activision has had a strong incentive to come up with different forms of content and marketing exclusivity which it could monetize in its negotiations with Microsoft and Sony. Since 2005 these marketing arrangements have included: (i) exclusive console marketing arrangements following the release of new titles and downloadable content; (ii) priority access to new maps (until these were phased out following the introduction of cross- platform play); (iii) exclusive access to the online alpha version of the game and access to the beta version of the game 5 days earlier than gamers on Xbox consoles or PC; (iv) game bonuses such as extra "tier skips" on the battle pass; (v) the ability to access additional "experience points" (e.g., through exclusive events); and (vi) certain in-game character customisations and content bundles.

MS left ABK in 2015, not the other way around (page 41)

Sony was not foreclosed when Call of Duty was exclusive to Xbox: There is no indication, based on Call of Duty's prior history of differentiation between versions of Call of Duty on Xbox and PlayStation, that this could in any way affect rival consoles' ability to compete effectively. Sony's share of console sales grew in the period from 2005-2015 when Xbox had certain exclusive rights to Call of Duty content. There are many more popular games available in the market in 2022 than there were between 2005 and 2015 (including Fortnite, PUBG, Apex Legends, Elden Ring and many others). If anything, Call of Duty's importance as a franchise was greater in 2005-2015. When Xbox decided not to continue with the Call of Duty co-marketing agreement in 2015, it simply found other ways to market and promote its platform. Sony, as the market leading console with an extensive first-party and third-party exclusive game catalogue, is even better placed to do the same.

(c) Microsoft [X] Call of Duty exclusivity: Microsoft's exclusive arrangements for Call of Duty content expired at the end of 2015. (Page 31)

(d) Microsoft did not expect [X]. Microsoft did not [X], but does not believe this agreement [X]. Microsoft was not foreclosed as a result of the agreement. (Page 31)

The EMEA (Europe, the Middle East and Africa) market is where COD has more players? (Page 54)

Second, as noted in Microsoft's deal model, "continued sales of Activision Blizzard's portfolio on all platforms (console, PC, mobile)" accounted for [X] of the estimated "Value to Microsoft" from the Merger.200 Given that ca. [X]% of Call of Duty's total MAUs (and ca. [X]% of console MAUs) are on PlayStation, a hypothetical foreclosure strategy would involve putting at risk a significant portion of Activision's revenues. The consequences would be even more severe in the EMEA region where ca. [X]% of Call of Duty's total MAUs (and ca. [X]% of console MAUs) are on PlayStation. This would be a commercially irrational strategy, in particular in circumstances where Microsoft could not conceivably expect to foreclose Sony from the market.

MS is expecting to lose market share in UK

As the table below shows, Xbox in 2021 accounts for [20-30]% of the installed base of gaming consoles globally, [30-40]% in the UK, while Sony accounted for [40-50]% globally and [40-50]% in the UK – this is even excluding handheld console devices. Xbox's share of yearly sales is even lower, suggesting that its share of installed base is likely to decrease against Nintendo and Sony in the near future. The global and UK leader Sony just cannot be foreclosed by losing access to a single franchise among the broad range of alternatives for gamers available on the PlayStation platform.

20-30% of PlayStation 5 users also have an Xbox: 10-20% of Xbox users have a PlayStation 5 (page 67)

Gamers often multi-home across gaming consoles: Gamers who multi-home simultaneously own more than one gaming console. Multi-homing gamers who already own an Xbox are not impacted by a withholding of Activision content from PlayStation and/or Nintendo. They are unlikely to "abandon" their PlayStation or Nintendo console and instead simply purchase the exclusive content for their Xbox console. This severely reduces any impact on rival platforms and further hinders Microsoft ability to foreclose rivals. Third-party data procured by Microsoft in the ordinary course of business suggests that at the very least [20-30]% of PlayStation 5 users also owned an Xbox Series X/S and [X] also gamed on a PC. These metrics are as of December 2020 and are likely to have [X] at the time of this submission.

Microsoft regularly procures third-party data from NPD on console cross-ownership in the USA. The latest available data from NPD shows that in the fall of 2020, ca. [20-30]% of PlayStation 5 users also owned an Xbox Series X/S whereas [10-20]% of Xbox Series X/S users also owned a PlayStation 5. The same data also suggests that [] of PlayStation 5 and Xbox Series X/S owners also plays on their PC. The difference in share of cross-owners across consoles is likely to be explained by the ongoing semiconductor shortage caused by the COVID-19 pandemic and the fact that PlayStation 5 has witnessed a higher excess demand compared to the Xbox Series X/S. As the latest available data refers to the very beginning of the console generation, Microsoft expects the share of multi-homing console gamers to have increased materially over the course of the past months

 

[feynoob]

Part 3 (Idas)
Users with multiple consoles generally prefer PlayStation (page 68)

In the context of a survey, Microsoft has asked gamers which of their consoles is their "favourite" to play on. Generally, gamers that multi-home across consoles have reported to prefer their PlayStation over their Xbox More specifically, in response to the question: "Of the consoles you play games on, which one is/was your favourite to play on?", [60-70]% of gamers owning an Xbox and a PlayStation have reported their favourite console to be a PlayStation – [30-40]% PlayStation 4, [20-30]% PlayStation 5, [10-20]% Xbox Series X, [10-20]% Xbox One. Of the gamers owning all three consoles, [40-50]% have reported their favourite console to be a PlayStation – [30-40]% PlayStation 5, [10-20]% PlayStation 4, [10-20]% Xbox Series X, [10-20]% Nintendo Switch, [10-20]% Nintendo Switch OLED, [0-10]% Xbox One, [0-10]% Nintendo Switch Lite.

Sony and Nintendo could allow access to Gamepass via browser but they don't want to (page 68)

Gamers can access content via the web browser on their console – if their console provider allows them to: Microsoft allows other content services to be accessed on Xbox consoles via the web browser on the console (e.g., Luna, GeForce Now and Stadia can be accessed via Xbox consoles). Other console providers would have the option to do the same and allow gamers using their consoles to access Game Pass through the console browser. In that scenario, gamers would be able to access content which is exclusive to Game Pass without the need to purchase a new Xbox console. From a technical perspective, a gamer on any platform can access Game Pass, as long as the platform supports a modern implementation of a chromium-based browser and does not block the site. Game Pass is available via the browsers on increasing range of other devices, including Valve's Steam Deck, Razer and Logitech handheld gaming devices, the Meta Quest platform, new Samsung smart TVs, and Google Chromebooks. Sony and Nintendo do not currently allow gamers on their platforms to access Game Pass or other gaming services via the browsers on their consoles – but could easily do so.

The potential problems of having content from ABK on Gamepass (page 70)

The reality is that Activision content is present today on multi-game subscriptions only to a very limited extent. For reasons previously explained and reiterated below, publishers like Activision have conflicting incentives when it comes to the economics of placing their content on multi-game subscription services. Moreover, Microsoft would have to navigate current contractual restrictions to place Activision content into Game Pass. However, the intention of improving Game Pass with the inclusion Activision content would be to differentiate the service give gamers the benefit of accessing these titles more cheaply via a subscription.

ABK seems to be "against" subscription services and cloud gaming (page 76)

Activision has never published any newer content on multi-game subscription services and has no intention to do so in the future.

This stance is reflected in statements made by Activision's senior leadership, who in recent Investigational Hearings with the FTC in relation to the Merger have stated on the record that [X]. The Parties specifically note that:

(a) Bobby Kotick, CEO of Activision stated that [X]. Specifically, Mr. Kotick stated that [X]. Mr. Kotick was even more unequivocal in his position on cloud streaming, calling it [X]. Regarding the technical requirements, Mr. Kotick stated that even if latency and control issues could be improved, he considered that game developers were [X]. Likewise, Mr. Kotick stated [X]. For the reasons stated above, Mr. Kotick considered cloud-based game streaming to be [X].

(b) Mr. Kotick's position has been reiterated by numerous other senior leadership figures in Activision. Mike Ybarra, President of Blizzard Entertainment, stated that [X]. Additionally, Mike confirmed that [X]. Moreover, with regards to cloud-based game streaming, Mr. Ybarra stated that [X]. Mr. Ybarra stated that [X]. Mr. Ybarra has stated his view that [X].

World of Warcraft likely not coming to Gamepass (page 78)

A large component of Activision's share of PC game publishing is due to World of Warcraft, a single-game subscription title that is not part of any multi-game subscription service and would be technically very challenging to integrate into a multi-game subscription service.

 

[feynoob]

Part 4 (Idas)
Gamepass was expected to be around 35 million in July 2022 (page 82)

Since its launch in 2017, Game Pass has gradually grown to approximately 25 million subscribers. As above, this is 10 million fewer subscribers (28%) than what was forecasted for Fiscal Year 2022.

A bit more about Sony preventing games from being included on Gamepass (page 85)

Any potential growth of Game Pass, whether or not it elicits competitive response from Sony, would only be beneficial to gamers. For completeness, Microsoft is aware that Sony has secured contractual rights to prevent games from a number of publishers from being included on Game Pass. Sony engages in conduct today which is reflective of its market power in multi-game subscriptions, including charging a significant pricing premium for its subscription services without fear of losing share in either subscriptions or consoles, as well as restrictive provisions in its agreements with publishers. Accordingly, any concerns raised by Sony in relation to the potential impact of the Merger on multi-game subscription services must acknowledge this conduct, which suggests that Sony has prioritised its own profits, rather than benefits to gamers.

For example, Microsoft understands that [X].

PC Gamepass having a small market share (page 89)

While Microsoft's share of revenue generated by multi-game subscriptions services on PC is [X] than the Parties' share of game publishing on PC, these should not be taken as an indication that anticompetitive effects are likely to arise from any strategy involving the withholding of Activision's games from rival services. It is not appropriate to sub-segment the PC gaming segment and carve out subscription services. As explained, these are just another means of paying for gaming content and do not represent a meaningfully different offering from a demand-side perspective. Game Pass' share is miniscule on PC: the overall revenue from subscription services on PC accounts for less than [X]% of the global PC gaming segment and [X]% in the UK. The beta for PC Game Pass was only launched in June 2019 and Microsoft has not seen any evidence of a cannibalisation effect in PC gaming to date. Microsoft notes that its share of distribution in PC games is limited in any event (ca. [X]% in the UK in 2021).

xCloud numbers are really small? (Page 92) We don't know the numbers, but I guess that they wouldn't frame them this way if they were good.

In December 2021, there were only around [X] million MAUs on xCloud worldwide, representing [X]% of total Xbox MAUs in the same period. These proportions are even smaller if one considers the percentage of game time: the total game-time on xCloud is only [X]% of the total game-time on Xbox console in 2021, and only [X]% in 2022. Over January - March 2022 the average share of xCloud MAUs to Xbox MAUs was [X]%

 

[feynoob]

Part 5 (Idas)

Fortnite on xCloud is having worse numbers than MS expected (page 94)

While cloud gaming on mobile may grow, adoption is not expected to be rapid as it requires a significant change in consumer behaviour. Research published by the CMA shows that, both worldwide and in the UK, where cloud gaming app users had a choice between a provider's native or web app on Android, around 99% of users used the native app, with 1% using either the web app or a combination of the web and native app. Microsoft's experience with adding Fortnite on Xbox Cloud Gaming illustrates these challenges.

Microsoft added cloud gaming as a feature of its top-tier subscription service offer, Game Pass Ultimate (which also includes the multi-player functionality of Xbox Live Gold) in September 2020. Yet, more than two years later, Xbox Cloud Gaming is still available as a "beta", meaning that it is still in second- stage testing.

(b) At launch, Microsoft was hopeful that [X].373 But even then, Microsoft understood [X].374 The 'market signal' Microsoft received, [X].

(c) Fortnite was launched as a free-to-play game on Xbox Cloud Gaming in May 2022. 375 As the game was free-to-play and available separately from Game Pass, Microsoft was relatively optimistic as to the number of potential users of the service. [X].

(d) As shown by Figure 53 below, the number of players on Fortnite on Xbox Cloud Gaming [X].

Azure is not optimised for gaming (page 104)

Azure has a limited number of data centres in the UK: Azure provides IaaS from a limited number of [X] data centres in the UK. The locations of Azure's data centres are optimized for enterprise customers, not gaming customers. Azure GPU optimised servers suitable for cloud gaming are located at third- party data centres in London. Azure does not, therefore, offer a broader footprint in the UK than its competitors.

Cloud gaming is losing money for MS right now (page 107)

Microsoft has no history of using Windows OS to target cloud gaming providers: Cloud gaming providers such as Amazon, Google and Nvidia have been SPLA partners for many years. Microsoft has not withheld access to the SPLA program, nor has it degraded access to Windows Server under SPLA in the past. The revenue Microsoft receives from licensing Windows Server via SPLA is substantial at ca. USD [X] billion [X] (equating to approximately [X]% of SPLA revenues) and it is not credible that Microsoft would forgo this revenue in order to protect its position in cloud gaming which does not generate material revenues and is loss-making.

 

[twilo99]

What's the "penalty" for not completing the deal ?

Maybe taking that 60bil back during a recession is not a bad idea. Spend it on stupid exclusives, etc..

 

[feynoob]

What's the "penalty" for not completing the deal ?

Maybe taking that 60bil back during a recession is not a bad idea. Spend it on stupid exclusives, etc..

If the deal doesn't happen, someone has to pay for it

Activision Blizzard has to pay Microsoft a termination fee of $2,270,100,000 if:

• MS is still waiting for the ABK stockholders meeting to happen by the termination dates.
• Regulatory conditions were not satisfied and the reason is a breach by ABK.
• ABK infringes the agreement.
• The ABK stockholders reject the deal.
• The Activision Blizzard Board of Directors doesn't recommend the deal anymore.
• ABK receives a better offer.

Microsoft has to pay Activision Blizzard a termination fee of:

• $2,000,000,000, if the termination notice is provided prior to January 18th, 2023.
• $2,500,000,000, if the termination notice is provided after January 18th, 2023 and prior to April 18th, 2023.
• $3,000,000,000, if the termination notice is provided after April 18th, 2023.

Reasons for this possible termination fee in favor of ABK:

• A court or a regulator rejects the deal and there is no way to appeal it.
• There is a new law that prohibits this kind of deal.
• MS infringes the agreement.
• Regulatory conditions were not satisfied and the reason is a breach by MS.

 

[GhostOfTsu]

Gamepass was expected to be around 35 million in July 2022 (page 82)

Since its launch in 2017, Game Pass has gradually grown to approximately 25 million subscribers. As above, this is 10 million fewer subscribers (28%) than what was forecasted for Fiscal Year 2022.

Interesting after the 29 millions from Sony. They expected 35 millions with Halo, Forza and xCloud but they only reached 25 millions and they admit xCloud is a flop and Fortnite was low too. Ouch.

 

[feynoob]

Important part of document for those who dont want to read those long part.

• MS is not denying the relevance of COD, but the data doesn't automatically show that COD is the only game to attract gamers to a console or that losing it would become critical
• without the acquisition Activision is not interested in subscription services
• Publicly available data suggests that PlayStation MAUs in 2021 are more than double Xbox MAUs (107 million versus [X] million).
• Activision has had a strong incentive to come up with different forms of content and marketing exclusivity which it could monetize in its negotiations with Microsoft and Sony. Since 2005 these marketing arrangements have included: (i) exclusive console marketing arrangements following the release of new titles and downloadable content; (ii) priority access to new maps (until these were phased out following the introduction of cross- platform play); (iii) exclusive access to the online alpha version of the game and access to the beta version of the game 5 days earlier than gamers on Xbox consoles or PC; (iv) game bonuses such as extra "tier skips" on the battle pass; (v) the ability to access additional "experience points" (e.g., through exclusive events); and (vi) certain in-game character customisations and content bundles.
• When Xbox decided not to continue with the Call of Duty co-marketing agreement in 2015, it simply found other ways to market and promote its platform. Sony, as the market leading console with an extensive first-party and third-party exclusive game catalogue, is even better placed to do the same.
  
  • (c) Microsoft [X] Call of Duty exclusivity: Microsoft's exclusive arrangements for Call of Duty content expired at the end of 2015. (Page 31)
    
    (d) Microsoft did not expect [X]. Microsoft did not [X], but does not believe this agreement [X]. Microsoft was not foreclosed as a result of the agreement. (Page 31)
• hypothetical foreclosure strategy would involve putting at risk a significant portion of Activision's revenues. The consequences would be even more severe in the EMEA region where ca. [X]% of Call of Duty's total MAUs (and ca. [X]% of console MAUs) are on PlayStation. This would be a commercially irrational strategy, in particular in circumstances where Microsoft could not conceivably expect to foreclose Sony from the market. (In case COD leaves PS)
• Xbox's share of yearly sales is even lower, suggesting that its share of installed base is likely to decrease against Nintendo and Sony in the near future. The global and UK leader Sony just cannot be foreclosed by losing access to a single franchise among the broad range of alternatives for gamers available on the PlayStation platform.
• . Third-party data procured by Microsoft in the ordinary course of business suggests that at the very least [20-30]% of PlayStation 5 users also owned an Xbox Series X/S and [X] also gamed on a PC. These metrics are as of December 2020 and are likely to have [X] at the time of this submission. [20-30]% of PlayStation 5 users also owned an Xbox Series X/S whereas [10-20]% of Xbox Series X/S users also owned a PlayStation 5.
• Sony and Nintendo do not currently allow gamers on their platforms to access Game Pass or other gaming services via the browsers on their consoles – but could easily do so.
• Moreover, Microsoft would have to navigate current contractual restrictions to place Activision content into Game Pass. (Seems activision games is going to be blocked from gamepass for a while)
• Activision has never published any newer content on multi-game subscription services and has no intention to do so in the future.
• A large component of Activision's share of PC game publishing is due to World of Warcraft, a single-game subscription title that is not part of any multi-game subscription service and would be technically very challenging to integrate into a multi-game subscription service.
• Microsoft is aware that Sony has secured contractual rights to prevent games from a number of publishers from being included on Game Pass.
• Game Pass' share is miniscule on PC: the overall revenue from subscription services on PC accounts for less than [X]% of the global PC gaming segment and [X]% in the UK.
• While cloud gaming on mobile may grow, adoption is not expected to be rapid as it requires a significant change in consumer behaviour.
• The revenue Microsoft receives from licensing Windows Server via SPLA is substantial at ca. USD [X] billion [X] (equating to approximately [X]% of SPLA revenues) and it is not credible that Microsoft would forgo this revenue in order to protect its position in cloud gaming which does not generate material revenues and is loss-making.

 

[feynoob]

Interesting after the 29 millions from Sony. They expected 35 millions with Halo, Forza and xCloud but they only reached 25 millions and they admit xCloud is a flop and Fortnite was low too. Ouch.

They estimated too much. This partly to blame for their first party output. That explains the target drop for gamepass. The potential target numbers were high and unrealistic according to their 1st party output.

 

[DForce]

It's pretty obvious. This acquisition allows customers who are not opposed to Xbox on principle to play brand new games without having to rely on traditional retail. I can play the new CoD without having to pay $70. That is clear benefit to Xbox customers. The deal does not benefit Sony specifically but it absolutely benefits normal non fanatical customers.

You guys love to spin everything as a Pro Gamer move when it comes to Microsoft. lol

This move doesn't benefit all gamers. It's just that simple. That's just something Xbox fans are buying because they see Microsoft as the savior of the gaming industry.

 

[GhostOfTsu]

They estimated too much. This partly to blame for their first party output. That explains the target drop for gamepass. The potential target numbers were high and unrealistic according to their 1st party output.

Not really. They went up 37% the year before without any big game and 86% the year before.

They expected to hit big with the new Halo + Forza + Psychonauts + Age of Empires 4 + Flight Simulator + xCloud/PC instead they only went up 28%.

73% was fair. They won publisher 2021 with these games so why would you expect less exactly?

I can play the new CoD without having to pay $70. That is clear benefit to Xbox customers. The deal does not benefit Sony specifically but it absolutely benefits normal non fanatical customers.

I want to play with you. What level are you?

 

[feynoob]

Not really. They went up 37% the year before without any big game and 86% the year before.

They expected to hit big with the new Halo + Forza + Psychonauts + Age of Empires 4 + Flight Simulator + xCloud/PC instead they only went up 28%.

73% was fair. They won publisher 2021 with these games so why would you expect less exactly?

The issue is the pace of those output.
Xsx/s come out without exclusive. After almost 1 year, they got flight simulator, forza, halo, Psychonauts 2, then disappeared after that. Even to this day, we have no idea when their next big game would hit.

You also have to add the lack of big gamepass day1 game after those games.

 

[ChiefDada]

Whether people are willing to admit it or not, everybody knows that for many years the greatest weapon in Sony's arsenal has always been their market power derived from their ability to produce compelling first party games

That's better.

and the ability of playstation to cast doubt in the minds of Xbox gamers.

 

[lefty1117]

In the end, MS had more cash and so was able to go for a bigger acquisition, and Sony mad. That's it. All this other stuff is noise. Sony does the same stuff with exclusivity and preventing other consoles from getting access to content (to answer someone who raised that on my last post). Some of Sony's first party exclusives are coming from studios they purchased, not "home grown". There is no difference. Sony's arguments are dumb.

 

[CatLady]

for more info, here is Idas take.

WTF is Idas, where is this info coming from and what makes it credible?

 

[RCU005]

In the end, MS had more cash and so was able to go for a bigger acquisition, and Sony mad. That's it. All this other stuff is noise. Sony does the same stuff with exclusivity and preventing other consoles from getting access to content (to answer someone who raised that on my last post). Some of Sony's first party exclusives are coming from studios they purchased, not "home grown". There is no difference. Sony's arguments are dumb.

These kind of arguments just tell me that people who makes them, will never be able to have a business, let alone a hot dog cart in the street.

Ffs it's not about fanboys. It's not about COD. This merge is very dangerous for the industry as a whole. It's not just about pleasing fanboys and making exclusive deals.