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[reksveks]

R reksveks
What do you think about their defense?

My very amateur opinion is that it's just a boring and high level defense to get something in before the deadline, but it's also not the place/time for them to signal their best defence argument especially if it's going to federal court.

Really need to get some sleep so may check in tomorrow (fingers crossed cma gives us more documents before Xmas break)

 

[ChorizoPicozo]

Does this (what happpened in the last 3-4 hours?) granted an Hoeg video?

If so, then tomorrow is going to be a video explaining all this shit.

 

[feynoob]

Does this (what happpened in the last 3-4 hours?) granted an Hoeg video?

If so, then tomorrow is going to be a video explaining all this shit.

Yes. there is alot of legal words in the document.
Plus it also needs reading the ftc paper and disecting certain parts, which MS is talking about.

I cant do that to be honest.

 

[ChorizoPicozo]

Yes. Alot of legal words are in the document.
Plus it also needs reading the ftc paper and disecting certain parts, which MS is talking about.

I cant do that to be honest.

And I am not reading that shit.

 

[solidus12]

Hoe’s law seems to be an expert; they should have represented Microsoft in court.

What a missed opportunity to be the next Camille Vasquez.

 

[adamsapple]

Does this (what happpened in the last 3-4 hours?) granted an Hoeg video?

If so, then tomorrow is going to be a video explaining all this shit.

Oh yeah this will 100% warrant a new video

 

[ReBurn]

Perhaps, but denial is a bit stronger language than saying it is irrelevant. I think R reksveks is right and we would have to hear the arguments to the judge.

I agree. A judge is ultimately going to decide this.

 

[SenjutsuSage]

Microsoft really should consider giving up on the Xbox console hardware brand and focus on the Xbox services brand. Their arguments would hold more weight if they actually committed to bringing gaming actually everywhere instead of some kind of Xbox/Windows trojan horse.

Obviously not serious advice because it's a horrible idea lol. Xbox console hardware is the most popular platform for Game Pass. Therefore Xbox console hardware isn't going anywhere. Where do people even come up with this kind of stuff. They'd be sabotaging game pass by killing Xbox hardware. Not everybody wants to game on PC, and where else will you get the full game pass experience on a device as convenient as an xbox console? A Playstation console? Plz...

 

[thicc_girls_are_teh_best]

Since it's related to this thread.

Yes it's Sony's fault Square-Enix agreed to terms that Sony offered?

Does Microsoft think Sony held a gun to Square-Enix's head and forced them into the deal? Why does the 3P publisher's own involvement in these deals never seem to factor in? Oh yeah, because that would defeat the argument being made!

Virtually 90% of the games Sony have exclusivity deals on are either co-funded, co-developed, co-marketed or some combination of all three by Sony. Moreover, where's the addressing of Microsoft's culpability in having no impetus to make these deals themselves during the XBO's formative years? No one told them they couldn't make such deals, just like no one told them they HAD to cancel Scalebound, Phantom Dust remake, or HAD to close down multiple 1P studios.

And now some would argue Microsoft are attempting to overcorrect for their mistakes of the past. But among other mistakes being made, obfuscating their own involvement in those mistakes and misrepresenting Sony's positions in partnerships with 3P publishers into something that sounds a lot more villainous than it actually ever has been (and no different to things both Microsoft & Nintendo have done and continue to do).

Idas expects CMA to approve without remedies.


https://www.resetera.com/threads/th...e-right-to-put-cod-on-ps.633344/post-98577454

So Microsoft have been on record, multiple times now, saying that this acquisition is really for King and a move into the mobile space (a space they were already in before shutting down Gears Pop! and Forza Streets, BTW), insinuating that COD isn't really a factor in the deal...yet Idas is of the opinion that MS is vehemently against divesting COD and relevant studios into a separate company (of which MS would still partially own) since access to COD in the future at rates considered acceptable has been Sony's particular hold-up (and MS making random offers like COD in PS+ do nothing to actually address that or fit Sony's revenue model for the PlayStation division)?

They are basically admitting that Microsoft have been sending mixed signals on their intentions with the acquisition and regulators will have seen this over the period of time since MS have made these gestures to appease regulators in the first place. Does Idas realize this is what he's effectively suggesting to be the case with that particular rationale? I don't know if they thought that particular part through well enough or if they kept it in mind when giving their thoughts in that post.

 

[feynoob]

Yes it's Sony's fault Square-Enix agreed to terms that Sony offered?

Does Microsoft think Sony held a gun to Square-Enix's head and forced them into the deal? Why does the 3P publisher's own involvement in these deals never seem to factor in? Oh yeah, because that would defeat the argument being made!

Virtually 90% of the games Sony have exclusivity deals on are either co-funded, co-developed, co-marketed or some combination of all three by Sony. Moreover, where's the addressing of Microsoft's culpability in having no impetus to make these deals themselves during the XBO's formative years? No one told them they couldn't make such deals, just like no one told them they HAD to cancel Scalebound, Phantom Dust remake, or HAD to close down multiple 1P studios.

And now some would argue Microsoft are attempting to overcorrect for their mistakes of the past. But among other mistakes being made, obfuscating their own involvement in those mistakes and misrepresenting Sony's positions in partnerships with 3P publishers into something that sounds a lot more villainous than it actually ever has been (and no different to things both Microsoft & Nintendo have done and continue to do).

Its business.
There is no right or wrong.

Everyone would do what they can to make their business stand on the top.

If I was managing a business, I would do the same thing.

 

[gothmog]

Google went with stadia. If MS goes like you said, they will lose their relevence.

The only reason Xbox is alive is the console.

I think you misunderstand what I'm saying. Just publish games on every console along with GamePass and streaming. Stadia was too limited. Basically get out of Sony and Nintendo's way as a direct competitor and become the ultimate middle man.

I know it sounds risky but the alternative is they lose this case and are locked out of major gaming acquisitions for a while. Even if they win they'll probably be effectively locked out for a time.

 

[feynoob]

I think you misunderstand what I'm saying. Just publish games on every console along with GamePass and streaming. Stadia was too limited. Basically get out of Sony and Nintendo's way as a direct competitor and become the ultimate middle man.

That is the problem.
MS has a brand recognition with Xbox , and they got $16b revenue from that platform. If they go to the third party route, they lose a lot.

MS isn't like Activision, which has COD. Their 1st party games doesn't print out that much money, due to their output. They would get less money, if they go full 3rd party.

I know it sounds risky but the alternative is they lose this case and are locked out of major gaming acquisitions for a while. Even if they win they'll probably be effectively locked out for a time.

If this deal is blocked, then they can enter a marketing contract with them.
If they win, that would strengthen their position.


The problem with MS/Xbox was audience relevance. It was a weak console, with weak line ups.
With them owning COD/Activision, it means that MS/Xbox would have the same relevance as x360.
And we know how X360 become after partnering with COD/Activision.

 

[akimbo009]

That is the problem.
MS has a brand recognition with Xbox , and they got $16b revenue from that platform. If they go to the third party route, they lose a lot.

MS isn't like Activision, which has COD. Their 1st party games doesn't print out that much money, due to their output. They would get less money, if go full 3rd party.



If this deal is blocked, then they can enter a marketing contract with them.
If they win, that would strengthen their position.


The problem with MS/Xbox was audience relevance. It was a weak console, with weak line ups.
With them owning COD/Activision, it means that MS/Xbox would have the same relevance as x360.
And we know how X360 become after partnering with COD/Activision.

And it's not like their, what seems promising, upcoming launches would vanish either. They have urgency here to maintain growth around GP and this is the tactic they are taking.

 

[Three]

But what it shows there is that it is a relevant part when deciding but, indeed, it does not have to be the only reason.

But it is ALWAYS a matter of relevance and to be taken into account when making a decision.

Where are you getting that idea from?

"They are mistaken. The antitrust laws don’t permit us to turn a blind eye to an illegal deal just because the parties commit to some unrelated social benefit. The laws we enforce are explicit: They prohibit mergers that “may substantially lessen competition or tend to create a monopoly.” They don’t ask us to pick between good and bad monopolies. Our statutory mandate is to halt a lessening of competition “in any line of commerce.” So we can’t act as deal makers, allowing reduced competition in one market in exchange for some unrelated commitment or benefit in another."

it's telling you it's unrelated. Unrelated isn't a synonym for 'relevant'.

Your way of misrepresenting is funny...

I want to remember how you were the one who said that ESGs were aspects that were not relevant and should not be taken into account by regulators in acquisition processes of this type.

No I wasn't. You were the one complaining that the CMA didn't mention workers conditions at Activision and I pointed out that it's not their job to. I just said its in no way related. This just shows how unrelated it is.

 

[SenjutsuSage]

So Microsoft have been on record, multiple times now, saying that this acquisition is really for King and a move into the mobile space (a space they were already in before shutting down Gears Pop! and Forza Streets, BTW), insinuating that COD isn't really a factor in the deal...yet Idas is of the opinion that MS is vehemently against divesting COD and relevant studios into a separate company (of which MS would still partially own) since access to COD in the future at rates considered acceptable has been Sony's particular hold-up (and MS making random offers like COD in PS+ do nothing to actually address that or fit Sony's revenue model for the PlayStation division)?

They are basically admitting that Microsoft have been sending mixed signals on their intentions with the acquisition and regulators will have seen this over the period of time since MS have made these gestures to appease regulators in the first place. Does Idas realize this is what he's effectively suggesting to be the case with that particular rationale? I don't know if they thought that particular part through well enough or if they kept it in mind when giving their thoughts in that post.

Stop and think about what you just said. King is a major part of the transaction (they make amazing money), but why in god's name would you go and give up the most valuable and most popular thing in the entire transaction even if King is a major consideration of the purchase, which they are? Getting rid of COD or divesting all of Activision literally makes this a useless purchase. Getting King only makes sense in the context of getting it with the entire package of what it is now.

Microsoft isn't trying to buy King and Blizzard. They're trying to buy Activision Blizzard King. If they were told to divest Blizzard that, too, would be a deal breaker for them. If they were told to divest King, that, too, would be a deal breaker for them because it's the area in which Xbox stands to gain the most and where they're on record as being weakest. Microsoft put in a $68.7 billion purchase for the entire package. Divesting any of it kills the deal for them. There's zero evidence that Microsoft doesn't really want King.

 

[feynoob]

I will sleep now. see ya in 5 hour.

 

[Three]

Imo Microsoft are denying

'which leaves it (Switch) unable to play certain games that require
more advanced graphic processing'

Which feels like a stretch unless you are arguing that games aren't fixed products or you can always stream.

Would be interesting to see that argument in front of a judge.

Their argument is unlikely to be that you can always stream. They have said streaming isn't viable for these games in a bid to downplay any cloud scrutiny :

MS:"Cloud gaming is a nascent technology that does not yet have a compelling use case. The quality of general purpose devices like mobile handsets is growing so fast that many complicated games can be played locally on the device and do not need extra computational power from the cloud. Latency – how long it takes for the instruction to shoot my opponent to get from my finger, to the server, into the game, and back to my screen – can be significant and degrade the quality of fast-paced games run in the cloud. No one likes their character to be killed immediately every time they enter the game."

So they are likely to argue power doesn't matter.

 

[DForce]

Idas expects CMA to approve without remedies.


https://www.resetera.com/threads/th...e-right-to-put-cod-on-ps.633344/post-98577454

I just find it funny that you're going with his crazy gut feeling when you were so confident this thing would go through without a problem.

Probably going through, but it's just funny to see the change over the past few months.

 

[12Dannu123]

I just find it funny that you're going with his crazy gut feeling when you were so confident this thing would go through without a problem.

Probably going through, but it's just funny to see the change over the past few months.

Because all rational logic leads to Microsoft not being a monopoly or for closing Sony with COD. The only reason why the FTC is against it is because of political reason.

Microsoft already knows that it will likely win the case against the FTC. Plus the US SC will likely strip the FTC of their power ps using the administrative court as a way to stall deals.

 

[DForce]

Because all rational logic leads to Microsoft not being a monopoly or for closing Sony with COD. The only reason why the FTC is against it is because of political reason.

Microsoft already knows that it will likely win the case against the FTC. Plus the US SC will likely strip the FTC of their power ps using the administrative court as a way to stall deals.

The FTC is well aware of what MS is trying to do. They won't stop at Activision.

Xbox fans were saying months ago that Sony cannot afford to acquire any big publishers and no one is going to stop MS from buying the likes of EA, Take-2 etc. EVEN you were making hundreds of threads telling people cloud is the future and Sony doesn't have the ability to compete as MS expands outside of consoles.

I just don't take you guys seriously anymore because you guys change always change the narrative.

 

[Three]

EVEN you were making hundreds of threads telling people cloud is the future and Sony doesn't have the ability to compete as MS expands outside of consoles.

I just don't take you guys seriously anymore because you guys change always change the narrative.

Pretty much.

Before regulators came back with their concerns or suing he was actually parroting their concerns in other threads

Unfortunately Sony has logistical and business model problems to aggressively compete with MS.

Unless Sony is willing to get into a price war with Microsoft and loose billions in the process with no guarantee of success. Then it's unlikely Sony will be serious competition in the Subscription and Cloud gaming market.

Game Pass has a lot more mindshare and has a lot more entry points into the service. So if Sony were to compete they will need to try to follow MS in the same steps.

No Sony won't directly compete with Game Pass.

1) it's very expensive and will take years of investment to pay off.

2) They don't have enough content to sustain a service like Game Pass, especially as the asking price skyrockets.

3) The economics don't work in Sony's favour. You can't increase the quality of PSNow or PS+ while maintaining $60 a year.

While Sony is considered the leader in traditional consoles, they are too far behind everywhere else. Right now they are very behind on game streaming and having a solid subscription service that can compete with Game Pass.

Microsoft is rumoured to allow people to stream purchased games on the Cloud and have the ability to stream their games on their own streaming stick this year. Compared to Sony, they don't even have PS5 support for their service and they are still capped at 5 million users, let alone being able to stream purchased games or have a solid subscription service that can compare to Game Pass and their IPs MS has purchased.

The reason is pretty clear on why MS is purchasing publishers at a aggressive rate, this is to ensure Game Pass is self sufficient and not totally reliant on third parties.

Sony has simply dropped the ball on long term strategic planning for the PS ecosystem.

This is no surprise, there's essentially no competition at the moment and the competition that is there right now doesn't have the capability to compete at scale

Now the only reason they are against it is political reasons.

 

[Banjo64]

All competing for the same money and time. Also where was all talk of 'high performance console' market nonsense then? I thought that was always how it was described. And which system was for serious gamers?

Exactly - the 3DS was in the same performance ball park as the the PS4 and Xbox One.

 

[DarkMage619]

Exactly - the 3DS was in the same performance ball park as the the PS4 and Xbox One.

Nintendo messed up by not marketing it for the long standing 'high performance console' segment. Don't know why so many missed this obvious category. People will think Nintendo isn't for serious gamers.

 

[Banjo64]

Nintendo messed up by not marketing it for the long standing 'high performance console' segment. Don't know why so many missed this obvious category. People will think Nintendo isn't for serious gamers.

Exactly, you’d have to be an idiot to make a distinction between the 3DS/PS4 power wise.

 

[DarkMage619]

Exactly, you’d have to be an idiot to make a distinction between the 3DS/PS4 power wise.

Yeah why would they advertise their industry leading software when they could talk about megaflops and other technical jargon normal consumer know nothing about. Clearly games are not the selling point of consoles its power levels!

The Commission’s claims are too speculative to support any claim on which relief can be granted.

Neither the filing of this administrative action nor the contemplated relief is in the public interest, pursuant to 15 U.S.C. § 45.

The Complaint reflects improper selective enforcement of the antitrust laws.
These proceedings are invalid because the structure of the Commission as an independent agency that wields significant executive power, and the associated constraints on removal of the Commissioners and other Commission officials, violates Article II of the U.S. Constitution and the separation of powers.

These proceedings are invalid because adjudication of the Commission’s Complaint by the ALJ and the Commission violates Article III of the U.S. Constitution and the separation of powers.

The Commission’s procedures arbitrarily subject Microsoft to administrative proceedings rather than to proceedings before an Article III judge in violation of Microsoft’s right to Equal Protection under the Fifth Amendment.

The Commission’s procedures violate Microsoft’s right to procedural due process under the Due Process Clause of the Fifth Amendment.

The structure of these administrative proceedings, in which the Commission both initiates and finally adjudicates the Complaint against Microsoft, violates Microsoft’s Fifth Amendment Due Process right to adjudication before a neutral arbiter.

These administrative proceedings violate Microsoft’s Fifth Amendment Due Process right to adjudication before a neutral arbiter as applied to Microsoft because the Commission has prejudged the merits of the instant action.

The Commission’s charges under Section 5 of the Federal Trade Commission Act are unlawful to the extent the Commission purports to apply Section 5 beyond the metes and bounds of the Sherman and Clayton Acts.

On the actual topic of this thread and not the nonsense of people trying to deny Nintendo's place in the market it appears MS is going to make some strong allegations. They don't like the fact this case is being tied up in administrative court and want to go to a federal court immediately. I hope that Supreme Court case resolves quickly. They are due their day in court. This should be interesting.

 

[Banjo64]

Yeah why would they advertise their industry leading software when they could talk about megaflops and other technical jargon normal consumer know nothing about. Clearly games are not the selling point of consoles its power levels!

Exactly - and even consumers have to look at the 3DS and make no power distinction either. It’s fairly simple - Chibo Robo 3DS directly competes with CoD.

 

[DenchDeckard]

The one thing that sticks out to me and makes me understand Microsoft approach to an extent is ROI and the contracts Sony has been able to establish by being first to market and the largest userbase that seems to block Microsoft from making such deals on larger franchises. Which in turn creates a circle of third party exclusivity deals on PlayStation which stops Microsoft from being able to claw back market share the way many people want them to. By securing third party exclusivity deals and funding big triple A games properly.

I see people say Microsoft had more money so they should just spend more. Well it would be nice but I can't see a business signing off on loss leaders. I'm sure others have highlighted this, but rough example below.

Microsoft has a user base of 50 million, Sony has a userbase of 100 million. Publisher tells Microsoft to have exclusivity it will cost 100 million dollars to account for loss of sales on PlayStation. Microsoft runs the numbers and tops they will sell 5 million copies in the exclusivity period to their userbase. After their cut they will only make around 30 million dollars and so will the publisher. They can't sign off a 100 million dollar deal that has an best case ROI of 30 million dollars...so they don't sign it off.

Sony then strikes the deal with their huge userbase they push the terms of "if you're lucky you may hit 5 million sales on xbox and that's if you're lucky so we will pay you 40 million ( 10 mill less than microsoft userbase) and want you to sign that the game won't come out on xbox at all..... but you have the potential of selling 10 million copies and will net yourself 60 million dollars profit as well as the 40 and guarantee to make profit on the deal"

So the publisher signs with Sony and the game can't come out on xbox at a later date becuase the was added by a strong arm move from the largest console seller on the market. ( can't blame Sony at all from these terms)

Now that was just hyperthetical and from my ass but a jihst of how I could see it going.

This then drives Microsoft into a corner, they can't get sign off on budgets for their own games the size of sonys as regularly becuase there's not the userbase to warrant it. So they bolster it with PC sales and they can't get deals like Sony becuase they can't claw back market share.

So they ultimately decide to invest in buying publishers. They then own the content, have the staff, absorb their P and L and basically create considerable equity for themselves. They make the deals, own the ip etc and in the worst case can sell the company if it doesn't work. A gamble but one I feel Microsoft has decided is their last ditch attempt to grow their marketshare along side game pass.

 

[Darsxx82]

Where are you getting that idea from?

"They are mistaken. The antitrust laws don’t permit us to turn a blind eye to an illegal deal just because the parties commit to some unrelated social benefit. The laws we enforce are explicit: They prohibit mergers that “may substantially lessen competition or tend to create a monopoly.” They don’t ask us to pick between good and bad monopolies. Our statutory mandate is to halt a lessening of competition “in any line of commerce.” So we can’t act as deal makers, allowing reduced competition in one market in exchange for some unrelated commitment or benefit in another."

it's telling you it's unrelated. Unrelated isn't a synonym for 'relevant'.

There is admitting its relevance and importance. What the president of the FTC criticizes is the tendency of companies to believe that aspects related to EGS are the most important when making a decision and that only with them should an acquisition process be approved. Obviously, the decision must focus primarily on the effects or not on the competitiveness of the market.
I repeat, that both MS and the CWA saw it as important to make public statements in this regard should tell you a lot. Especially in cases like this where there is a real doubt that the acquisition could harm market competitiveness.

No I wasn't. You were the one complaining that the CMA didn't mention workers conditions at Activision and I pointed out that it's not their job to. I just said its in no way related. This just shows how unrelated it is.

Yes, you misrepresent what was said... No one claimed that the EGS aspects were decisive and important when making a decision for the regulator. Its absence of mention (along with other aspects) was used as an example to criticize the exaggerated tendency of the CMA to focus only on the economic situation of Sony post-acquisition.

 

[feynoob]

Time for breaking down activision response to the ftc
chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://fm.cnbc.com/applications/cn...21222_9412_Resp_Activisions_Answer_PUBLIC.pdf

Xbox lacks the ability, let alone the incentive, to foreclose its competitors from Call of Duty. The FTC's conclusory allegations to the contrary ignore all available realworld evidence, resting instead on a purely hypothetical "but for" world that has no basis in reality;

The FTC's theory assumes that a gaming platform cannot succeed without Call of Duty. The notion that a single game or franchise is the key to the continued competitive vigor of the highly dynamic video game industry is facially absurd and contradicted by the plain facts; and

The FTC's alleged relevant markets are made up for this litigation and are entirely nonsensical.

These are very juicy.

First, taking Call of Duty exclusive would be disastrous for Xbox. If Xbox withheld Call of Duty from Sony's PlayStation or other platforms that compete with Xbox, Xbox would immediately forgo billions of dollars in lost game sales and cleave off a massive portion of the garners that Activision has worked so hard to attract and retain. Not only would Xbox lose players on those other platforms, but this strategy would also destroy the value of the game to Xbox owners: Call of Duty's appeal is in large part due to the investments that Activision has made to allow garners to play at any time and with anyone they choose, regardless of the platform they or their friends use. Withholding or degrading Call of Duty on PlayStation would eliminate this ability to cross-play and destroy the broad Call of Duty community that drives the game's success. The player backlash from making the Call of Duty franchise Xbox-exclusive would be devastating. It would destroy the trust Xbox has fostered with garners, leading frustrated garners to vote with their wallets and shift their attention away from Xbox offerings. In a world with nearly unlimited gaming alternatives, making Call of Duty exclusive is not a plausible outcome.

The FTC's wildest supposition is that Activision content would be available on subscription and cloud gaming services if not for the merger. The FTC alleges that the Transaction would harm Xbox's competitors for multi-game subscription and cloud gaming services because Activision might otherwise one day make its content available to those companies. These allegations are not only facially speculative and conclusory, they are entirely divorced from the facts. Activision's aversion to multi-game subscriptions and cloud gaming is widely known in the industry and is supported by ample testimony and evidence in the investigative record in this case. The only plausible "but for" scenario here is that Activision's new releases would not be available on subscription or cloud gaming services at all absent the Transaction, meaning that Xbox's plans to bring Activision games to subscription and cloud can only be viewed as output enhancing and overwhelmingly procompetitive. A theory premised on the notion that Xbox can withhold from its competitors something they never would have had access to in the first place reeks of desperation and is destined for failure.

 

[feynoob]

Cont

Second, the FTC's assertion that Call of Duty games are a "powerful influence" on platform adoption is baseless, contrived, and lacking in any legal significance. Courts have long held that a vertical merger can only cause anticompetitive harm when the acquired input is "essential." Call of Duty is a popular and successful game franchise, but it is far from being "essential" or even a "powerful influence" on consumer behavior, as the FTC contends. Indeed, no game or franchise is important enough to make or break a gaming platform. Call of Duty games offered on consoles, PCs, and mobile devices face intense competition from games across all types and genres, and new hit games developed by small studios regularly skyrocket to success seemingly out of nowhere. This highly dynamic environment provides consumers with infinite choices beyond Call of Duty. In particular, China-based gaming companies have been aggressively expanding in the U.S. by investing in U.S. gaming companies (e.g., Tencent's 40% stake in Epic Games, developer of Fortnite) and funding start-up gaming studios, all while enjoying protected access to the largest revenue opportunity in gaming at home in China. If Xbox were to cut off any of its platform competitors from Call of Duty, gamers using those platforms would simply move to alternative games instead. What's more, Sony has many high-quality existing games and an unrivaled war chest of intellectual property spanning movies, television, and music, upon which it can draw to develop even more games and franchises. If Xbox were to remove Call of Duty from PlayStation, Sony has more than enough weapons in its arsenal to continue to compete effectively.

Third, the FTC's made-for-litigation markets defy economic reality. The FTC has invented highly gerrymandered relevant product markets—including a "high-performance console" market limited to Xbox and PlayStation consoles, as well as individual markets for multigame subscriptions and cloud gaming—in an attempt to support its conclusory theories of harm. But even a cursory view of well-established facts demonstrates that these markets are entirely artificial. For example, the concept of a "high-performance console" market that excludes the Nintendo Switch is patently ridiculous. Nintendo competes directly with PlayStation and Xbox, offering many of the same games and targeting the same gamer demographics. Indeed, Different strategies of competing for consumer spend, like the Switch's innovative mobile capability, do not define a separate relevant market, despite the FTC's misguided attempts to claim otherwise.

The FTC's alleged relevant multi-game subscription and cloud gaming markets are similarly unfounded. Multi-game subscription services do not exist in a market unto themselves, but rather are simply another way for garners to pay for and access games. The investigative record is chock-full of evidence that garners frequently switch between multi-game subscriptions and other methods of purchasing and downloading games. Indeed, Activision's aversion to subscription is driven in no small part by the substantial cannibalization effect that multi-game subscriptions have on full game sales—i.e., garners can and do directly substitute game purchases for subscription access. The FTC's contrived cloud gaming market suffers a similar flaw: cloud gaming is simply a new—and still lacking in technological capability, commercial feasibility, and user adoption—gaming feature that aims to offer a different way to access content, not a separate market. Courts regularly reject highly artificial, deliberately drawn markets such as those put forward here, and this case will prove no exception.

 

[Three]

There is admitting its relevance and importance. What the president of the FTC criticizes is the tendency of companies to believe that aspects related to EGS are the most important when making a decision and that only with them should an acquisition process be approved.

You're interpreting things in a bizarre way. The FTC are directly telling you that any promises of improved social or corporate governance are unrelated. They criticised that exact thing saying they are mistaken for thinking this has any bearing on a decision to block a deal.

Obviously, the decision must focus primarily on the effects or not on the competitiveness of the market.
I repeat, that both MS and the CWA saw it as important to make public statements in this regard should tell you a lot. Especially in cases like this where there is a real doubt that the acquisition could harm market competitiveness.

Absolutely not. The fact that MS and the CWA did such a thing is exactly the type of play the FTC are criticising and say they make little difference to their decision to sue to block or not. What you are doing is trying to bolster its importance even when it is unrelated.

Yes, you misrepresent what was said... No one claimed that the EGS aspects were decisive and important when making a decision for the regulator. Its absence of mention (along with other aspects) was used as an example to criticize the exaggerated tendency of the CMA to focus only on the economic situation of Sony post-acquisition.

How did I misrepresent what was said?

You were upset the CMA didnt mention Activision working conditions and concentrated on harm to competitors instead.

If the EGS aspect is unimportant and not decisive why did you believe it bears mentioning in the CMA investigation then?
It's more your exaggerated tendency to push the creative ways companies try to fend off a government challenge to an acquisition. The very thing the FTC criticised.

A company can promise the world but the regulators should not care if their mandate is to decide whether an acquisition results in substantial lessening of competition (SLC) . That's not to say those companies won't still try to appeal to human emotion and public opinion but asking for mentions of unrelated aspects in an investigation is daft and not what those agencies are there to do. They will assess EGS concerns in a merger but only any negative effects, not in exchange for some unrelated commitment or benefit. As they said they are not deal makers. If there is SLC then they block the merger even with any unrelated commitments the company/you think bear mentioning in an investigation, if there isn't SLC then those commitments are still unrelated and irrelevant.

 

[feynoob]

Cont

Adding Activision's content to multigame subscription and cloud gaming, where it would not have been available otherwise, is plainly output enhancing and gives garners more options on how and where to engage with Activision content. Activision, and particularly its King division, will also enable the acceleration of Xbox's nearly non-existent mobile gaming business, which would enhance competition in the fastest growing segment of gaming. And the Transaction will ultimately expand the capital support and talent available to Activision's game development studios, driving further innovation in new games and technologies.

Other response is lawyers talks. Skiming through to find interesting parts.

68. Activision lacks knowledge or information sufficient to form a belief as to the truth of the allegations of Paragraph 68 and denies them on that basis, except to specifically deny any implication that Nintendo's hardware is reserved for or tends to be used more for "casual" or "family gaming," particularly given that Activision itself has published titles on Nintendo's Switch that could not plausibly be described as "casual" or "family" games. These include titles in the Overwatch and Diablo franchises that feature "T for Teen" (for gamers aged 13 and up) and "M for Mature" (for garners aged 17 and up) ratings, respectively, by the Entertainment Software Review Board. Activision further denies that such distinctions are competitively relevant and denies any implication that Nintendo Switch appeals to a different gaming audience than Microsoft and Sony consoles; in fact, young adults aged 20 to 25 make up the largest share of the Switch's player demographic and adults well into their 40s make up a significant proportion of the Switch's user base.

 

[Three]

Cont


Other response is lawyers talks. Skiming through to find interesting parts.

Somebody should ask them why Diablo 4 isn't coming to switch then. Then follow up with how much did the PS3/360 Diablo 3 game they ported sell on Switch in comparison to playstation 4 and xbox one for example.

 

[feynoob]

Activision legal defense

Activision asserts the following defenses with respect to the causes of action alleged in the Complaint, without assuming the burden of proof or persuasion where such burden rests on the Commission. Activision has not knowingly or intentionally waived any applicable defenses, and it reserves the right to assert and rely upon other applicable defenses that may become available or apparent throughout the course of the action. Activision reserves the right to amend, or seek to amend, its answer or affirmative defenses.
1. The Complaint fails to state a claim upon which relief can be granted.
2. The Complaint fails to allege a plausible relevant product market or markets.
3. The Complaint fails to allege a plausible relevant geographic market.
4. The Complaint fails to allege undue share in any plausibly defined relevant market.
5. The Complaint fails to allege any harm to competition.
6. The Complaint fails to allege any harm to consumers or consumer welfare.

7. The combination of Microsoft's gaming business with Activision's business will be procompetitive. The Transaction will result in substantial acquisition-specific efficiencies, synergies, and other procompetitive effects that will directly benefit consumers. These benefits will greatly outweigh any and all proffered anticompetitive effects. 8. There will be no harm to competition, consumers, or consumer welfare because there is, and will continue to be, entry and expansion by competitors, which is timely, likely, and sufficient.
9. The alleged harm to potential competition is not actionable.
10. The Commission cannot provide clear proof that the combination of Microsoft's gaming business and Activision's business would restrain trade in the alleged markets for "multigame content library subscription services" or "cloud gaming subscription services" because butfor the Transaction, Activision's games would not be available on any such service.
11. The Commission fails to allege a time frame for the alleged anticompetitive effects.
12. The Commission is not entitled to relief because none of Activision's conduct identified in the Complaint is actionable—independently or in the aggregate—under the antitrust laws.
13. Microsoft's offers of binding contractual commitments to continue to offer certain titles like Call of Duty to other gaming companies, including Nintendo and Sony, for at least ten years address all of the alleged anticompetitive effects in the alleged markets and ensure that there will be no harm to competition or consumers.
14. The Commission's claims are too speculative to support any claim on which relief can be granted.

15. Neither the filing of this administrative action nor the contemplated relief is in the public interest, pursuant to 15 U.S.C. § 45.
16. The Complaint reflects improper selective enforcement of the antitrust laws.
17. These proceedings are invalid because the structure of the Commission as an independent agency that wields significant executive power, and the associated constraints on removal of the Commissioners and other Commission officials, violates Article II of the U.S. Constitution and the separation of powers.
18. These proceedings are invalid because adjudication of the Commission's Complaint by the Administrative Law Judge and the Commission violates Article III of the U.S. Constitution and the separation of powers.
19. The Commission's procedures arbitrarily subject Activision to administrative proceedings rather than to proceedings before an Article III judge in violation of Activision's right to Equal Protection under the Fifth Amendment.
20. The Commission's procedures violate Activision's right to procedural due process under the Due Process Clause of the Fifth Amendment.
21. The structure of these administrative proceedings, in which the Commission both initiates and finally adjudicates the Complaint against Activision, violates Activision's Fifth Amendment Due Process right to adjudication before a neutral arbiter.
22. These administrative proceedings violate Activision's Fifth Amendment Due Process right to adjudication before a neutral arbiter as applied to Activision because the Commission has prejudged the merits of the instant action.
23. The Commission's charges under Section 5 of the Federal Trade Commission Act are unlawful to the extent the Commission purports to apply Section 5 beyond the metes and bounds of the Sherman Act and the Clayton Act.

 

[feynoob]

Somebody should ask them why Diablo 4 isn't coming to switch then. Then follow up with how much did the PS3/360 Diablo 3 game they ported sell on Switch in comparison to playstation and xbox.

Its either porting issues or profitable issues.
I would be inclined to say profitable issues, as activision likes money, and dont care about how bad their porting is.

 

[feynoob]

 

[feynoob]

R reksveks
what do you think about activision response?

 

[Three]

Its either porting issues or profitable issues.
I would be inclined to say profitable issues, as activision likes money, and dont care about how bad their porting is.

Trust us, we don't have separate markets we release to based on capability we just didn't feel like releasing it there. It so would have sold a lot of copies to those users who MS say have 50% of the consoles of the same audience/market but we just decided let's not release it there.

 

[ChiefDada]

Him being lawyer, means he knows his stuff.

To be more specific, I'm a European lawyer and I've been working for almost 15 years on IT and competition law (antitrust).

Jesus Christ I can't begin to convey how utterly shocked I am to hear this from someone with supposedly 15yrs experience as an attorney. I expect that sort of ill informed statement from those who don't work in professional services. Speaking as a chartered accountant myself. Bizarre.

 

[feynoob]

Jesus Christ I can't begin to convey how utterly shocked I am to hear this from someone with supposedly 15yrs experience as an attorney. I expect that sort of ill informed statement from those who don't work in professional services. Speaking as a chartered accountant myself. Bizarre.

Loopholes.
He might know couple of them, which allows MS to land in to that position.

 

[thismeinteil]

Gotta love when they say they have no incentive to make Activision games exclusive (same thing they said about Zenimax), and in the same breathe say PS can compete just fine without COD. It's obvious, COD is going exclusive to Xbox/PC if the deal goes through. Well, the mainline games. I'm sure they'll publish some quick junk so they can still abide by their Nintendo agreement.

 

[reksveks]

R reksveks
what do you think about activision response?

Will try to go over their points in a bit more detail, whilst going for a stroll.

Top level off those tweets
- they have a slight point about the demographics (which is defined typically by age, gender, ethnicity and economic income, I am used marketing definition cause there could be slight variations).
- need to look in paragraph 97, think it's the one referring to the big 4. I would need to see what 'substantially important' typically is defined as but imo it's not a strong defence for ABK if you are referring to all AAA games. Think the point (which is badly explained) is that you need a range of content is the strong one.
- Generally seems as 'aggressive' as MS if not more so
- Someone raised the interesting point about ABK's position re subscriptions models means that they are going to argue that there isn't an actual loss of a potential supplier in the subscription market (imo kinda on the BS side of things) if they are able to show its a justifiable relevant market.

 

[Three]

97. AAA gaming content is a substantially important input for High-Performance
Consoles, Multi-Game Content Library Subscription Services and Cloud Gaming Subscription Services, as these products use AAA content to attract and retain users and drive adoption. AAA content is difficult to produce given the intense resources and specialized competency required to develop these valuable games.

 

[Darsxx82]

You're interpreting things in a bizarre way. The FTC are directly telling you that any promises of improved social or corporate governance are unrelated. They criticised that exact thing saying they are mistaken for thinking this has any bearing on a decision to block a deal.

LOL, no, you're the one doing a bizarre interpretation to fit your narrative.
At no time is there any statement that its lack of importance when deciding, it only states that the basis of the decision is, obviously I repeat, whether or not there is an injury to competitiveness in the market. FTC criticizes the tendency of companies to believe that it is THE decisive factor, but in no case does it deny its value when deciding. Doing so would be absurd, especially in cases like this where there is great doubt about the main aspect.

.

Absolutely not. The fact that MS and the CWA did such a thing is exactly the type of play the FTC are criticising and say they make little difference to their decision to sue to block or not. What you are doing is trying to bolster its importance even when it is unrelated.

Again another bizarre interpretation on your part. I repeat, the FTC criticizes that companies believe that it is the main deciding factor, it never says that it is unrelated or downplays it. It is for this reason that MS and the CWA manifest themselves, because they really believe that in a case like this with so many doubts it can tip the scales

How did I misrepresent what was said?

You were upset the CMA didnt mention Activision working conditions and concentrated on harm to competitors instead.

If the EGS aspect is unimportant and not decisive why did you believe it bears mentioning in the CMA investigation then?
It's more your exaggerated tendency to push the creative ways companies try to fend off a government challenge to an acquisition. The very thing the FTC criticised.

A company can promise the world but the regulators should not care if their mandate is to decide whether an acquisition results in substantial lessening of competition (SLC) . That's not to say those companies won't still try to appeal to human emotion and public opinion but asking for mentions of unrelated aspects in an investigation is daft and not what those agencies are there to do. They will assess EGS concerns in a merger but only any negative effects, not in exchange for some unrelated commitment or benefit. As they said they are not deal makers. If there is SLC then they block the merger even with any unrelated commitments the company/you think bear mentioning in an investigation, if there isn't SLC then those commitments are still unrelated and irrelevant.

Once again, we were not criticizing the lack of mention of the situation of workers and social aspects per se, we were criticizing the exaggerated way of the CMA in focusing its concerns on Sony's post-acquisition economic situation.
We wanted to express a criticism of the letter of the CMA that left the impression of only caring about safeguarding the interests of the market leader (as stated by MS and Act in their response).
It was criticized for mentioning really irrelevant and wrong aspects focused on his concern for the position of Sony and yet leaving the opportunity to mention others.

 

[Bumblebeetuna]

No I'm not, those against this deal are raising specters of a scary future world. We already live the nightmare of shitty moneyhats which seems to be the preferred method some folks here want - probably cause it benefits them on their plastic toy of choice.

This is basically the gist of it. Every company makes moneyhat deals. No one cares when Nintendo does it. It’s funny and Xbox users are mocked when Sony does it. People only raise a fuss when Xbox does it. Which in a way makes sense, because they have the smallest user base, so an exclusive Xbox deal does exclude more people than the other two consoles. But there is still a deep disconnect between what MS does versus Nintendo/Sony. For some reason people are fine with Sony using their market position to make it extremely difficult for MS to compete without bleeding loads of money. MS instead opts for acquisitions because it makes way more sense but somehow that’s not good enough either. We have to protect poor little Sony!

Look at the replies you’ve gotten. Compared to the likes of SFV, FF7, FFXVI, Forspoken, Silent Hill, KOTOR, Stellar Blade, Rise of the Ronin, others I am forgetting, you get people mentioning Tunic and Sable and Ascent and fucking Medium These people understand a massive publisher acquisition is different than a normal moneyhat deal but also want to pretend High on Life and FFXVI are the same thing.

It comes down to what benefits their toy of choice. Which is fine. Just wish some would drop the act is all.

 

[reksveks]

97. AAA gaming content is a substantially important input for High-Performance
Consoles, Multi-Game Content Library Subscription Services and Cloud Gaming Subscription Services, as these products use AAA content to attract and retain users and drive adoption. AAA content is difficult to produce given the intense resources and specialized competency required to develop these valuable games.

Cheers, yeah it's a bit of a weird one from ABK. The following is MS's response.

Paragraph 97 purports to state conclusions of law to which no response is
required. To the extent a response is required to these conclusions, Microsoft denies those
allegations. Microsoft admits that it is valuable to have a variety of content available on Xbox
and Game Pass. Microsoft denies the remaining allegations contained in Paragraph 97

A bit more succinct but equally legalese and 'weak'. Think they are both agreeing that you need a variety of content including and not only AAA. I wonder if MS is also denying the 'AAA content is difficult to produce sentence'. If so, probably not a great argument.

I am not sure on this one from MS and ABK.

 

[Three]

At no time is there any statement that its lack of importance when deciding, it only states that the basis of the decision is, obviously I repeat, whether or not there is an injury to competitiveness in the market.

I'm not even going to entertain this idea you're pushing other than to point out the possible outcomes in what the FTC are telling you

SLC
ESG Benefits pushed by company
Blocked

NO SLC
ESG Benefits pushed by company
NOT blocked

NO SLC
NO ESG Benefits pushed by company
NOT blocked

Now try and apply some critical thinking as to how important the EGS benefits being pushed by the company would be in the investigation. It's them trying to bargain with the regulators and regulators have said they don't do that. You want to interpret it differently though.

Once again, we were not criticizing the lack of mention of the situation of workers and social aspects per se,

Could have fooled me. This was what you said:

I also invite you to tell me where they mention or "concern" about the interests of the workers.... A very important part after scandals of humiliating treatment and job security.

Nothing,

To which I replied "because that's unrelated".

It was criticized for mentioning really irrelevant and wrong aspects focused on his concern for the position of Sony and yet leaving the opportunity to mention others.

Man, I can't believe you. The fact that you continue to think that harm to competitors is what's "irrelevant and wrong" whereas 'interests of workers' is more important to an agency investigation of competition.

 

[reksveks]

Not sure if feynoob shared the link but ABK response is here

https://fm.cnbc.com/applications/cnbc.com/resources/editorialfiles/2022/12/23/20221222_9412_Resp_Activisions_Answer_PUBLIC.pdf

Looking at these documents on a phone is a pain.

 

[reksveks]

Just a quick side note, The CWA and AFL-CIO agreements are purely a political move in this context, it does help politically combat any potential concerns around Labor Monospony but that was always a losing argument imo. FTC didn't raise it iirc.

Only the gamers lawsuit raised anything about employees.

 

[DenchDeckard]

I need Hoegs law videos and anyone else to break this down into lamens terms but just from looking at it it seems to be a good counter argument from MS and ABK.