Microsoft / Activision Deal Approval Watch |OT| (MS/ABK close)

Do you believe the deal will be approved?

  • Yes, will be approved without changes.

    Votes: 221 24.9%

  • Yes, will be approved but with structural changes to ABK.

    Votes: 102 11.5%

  • Yes, will be approved but only with behavioral concessions.

    Votes: 262 29.6%

  • No, will not be approved.

    Votes: 301 34.0%
  • Total voters
    886
  • Poll closed .
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Not open for further replies.
DenchDeckard said:
No changes lol.

It would be crazy if this took a curve ball and the hardware guys had to goto court and it was somehow found out that the hardware teams had been breaking nda and discussing other companies specs and design with one another.

I doubt there would be a paper trail bout it would be amazing to see something where AMD and Microsoft or Sony were caught out discussing the competitors box in detail.

Would be great just for the drama.
Click to expand...
When Sony was making the Cell, IBM sold some of the "key components" to Microsoft.
www.theguardian.com

How Sony helped Microsoft produce the Xbox 360

A new book by two IBM chip designers says Sony's Cell chip research was used to the benefit of Microsoft's Xbox 360 processor
www.theguardian.com www.theguardian.com
But yes if AMD is found giving secrets from one console maker to another the drama would be amazing.
 
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ToadMan said:
No one is saying MS will destroy Sony by gaining market share. That is your strawman. What is "wrong with us guys" is people using strawmen and various false comments to paint an inaccurate picture of what's occurred here.

The CMA is opposed because of how MS is attempting to increase market share - the CMA is protecting consumers in the marketplace, not Sony or anyone else.
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I think they're more concerned with the outcome than the method tbh.
 
Banjo64 said:
Could the new collective voluntarily choose to only make Xbox games? I don't know. It wouldn't make much sense for the future acquirer to ignore Sony so it's something that's extremely unlikely in my opinion.

Other people here know more than me so please feel free to chime in if I've got anything wrong.
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Basically how I understand it as well.

Theoretically the new 'COD Company' could sign any deal with any platform holders and regulators will be very unlikely to be able to do anything. Regulators are changing precedence (rightly so) but unsure if they would go that far.
 
Banjo64 said:
The transaction goes ahead as planned.

Microsoft then have to sell off the element that they've agreed to with the CMA. It's yet to be determined what that would look like.

Hypothetically, they could come to an agreement to sell off the CoD IP, Infinity Ward, Treyarch, Sledgehammer and Raven.

This collective would then be sold by Microsoft to another company. Microsoft are not allowed to own this collective.

Could the new collective voluntarily choose to only make Xbox games? I don't know. It wouldn't make much sense for the future acquirer to ignore Sony so it's something that's extremely unlikely in my opinion.

Other people here know more than me so please feel free to chime in if I've got anything wrong.
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I don't think the transaction goes ahead "as planned" as such - the divestment deal has to be done and transacted simultaneously.

I'm not sure if there's a specific legal part to that from the CMA, but from the perspectives of the participants it has to be this way.

CMA can't approve a deal without the divestment issue resolved. Buyer identified, divestment scope confirmed, contracts complete.

MS can't resolve it unless they have a buyer, a price and a plan for the leftovers after the divestment scope is dealt with.

MS also needs to be able to negotiate a fair value price - no one would offer fair value if MS are compelled to sell and MS would in the meantime carry the cost of an organisation they cannot legally interact with. So MS need to be able to walk away from the deal and they can only do that prior to completion.

The buyer can't agree to buy while MS doesn't have control of ABK. Conversely, the CMA can't wait for MS to take control and then monitor the sale process - too much shenanigans possible.

ABK also needs to know that following the disembowelment by the divestment, the deal will complete so they won't divest before the purchase day in case it all fell through.

All of these competing interests and interlinked contracts mean the purchase and divestment must all go through simultaneously - if any part aborts, it's all halted.

I'd expect the deals to all be signed up and a time/date of execution to be chosen when all the ownership changes are triggered simultaneously. And all of that would be approved by the CMA first.

This is probably why MS is quiet right now publicly at least - working out suitors for the divestment, working out price and other bits. Then they can respond with a plan or pull out if they're unable to find a suitable home for the divested stuff.
 
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ToadMan said:
I don't think the transaction goes ahead "as planned" as such - the divestment deal has to be done and transacted simultaneously.

I'm not sure if there's a specific legal part to that from the CMA, but from the perspectives of the participants it has to be this way.

CMA can't approve a deal without the divestment issue resolved. Buyer identified, divestment scope confirmed, contracts complete.

MS can't resolve it unless they have a buyer, a price and a plan for the leftovers after the divestment scope is dealt with.

MS also needs to be able to negotiate a fair value price - no one would offer fair value if MS are compelled to sell and MS would in the meantime carry the cost of an organisation they cannot legally interact with. So MS need to be able to walk away from the deal and they can only do that prior to completion.

The buyer can't agree to buy while MS doesn't have control of ABK. Conversely, the CMA can't wait for MS to take control and then monitor the sale process - too much shenanigans possible.

ABK also needs to know that following the disembowelment by the divestment, the deal will complete so they won't divest before the purchase day in case it all fell through.

All of these competing interests and interlinked contracts mean the purchase and divestment must all go through simultaneously - if any part aborts, it's all halted.

I'd expect the deals to all be signed up and a time/date of execution to be chosen when all the ownership changes are triggered simultaneously. And all of that would be approved by the CMA first.

This is probably why MS is quiet right now publicly at least - working out suitors for the divestment, working out price and other bits. Then they can respond with a plan or pull out if they're unable to find a suitable home for the divested stuff.
Click to expand...

I wonder if, at least for now, they are more focused on putting forward behavioral remedies. There's also the hurdles represented by the FTC and EU still in play too.
 
ToadMan said:
I don't think the transaction goes ahead "as planned" as such - the divestment deal has to be done and transacted simultaneously.

I'm not sure if there's a specific legal part to that from the CMA, but from the perspectives of the participants it has to be this way.

CMA can't approve a deal without the divestment issue resolved. Buyer identified, divestment scope confirmed, contracts complete.

MS can't resolve it unless they have a buyer, a price and a plan for the leftovers after the divestment scope is dealt with.

MS also needs to be able to negotiate a fair value price - no one would offer fair value if MS are compelled to sell and MS would in the meantime carry the cost of an organisation they cannot legally interact with. So MS need to be able to walk away from the deal and they can only do that prior to completion.

The buyer can't agree to buy while MS doesn't have control of ABK. Conversely, the CMA can't wait for MS to take control and then monitor the sale process - too much shenanigans possible.

ABK also needs to know that following the disembowelment by the divestment, the deal will complete so they won't divest before the purchase day in case it all fell through.

All of these competing interests and interlinked contracts mean the purchase and divestment must all go through simultaneously - if any part aborts, it's all halted.

I'd expect the deals to all be signed up and a time/date of execution to be chosen when all the ownership changes are triggered simultaneously. And all of that would be approved by the CMA first.

This is probably why MS is quiet right now publicly at least - working out suitors for the divestment, working out price and other bits. Then they can respond with a plan or pull out if they're unable to find a suitable home for the divested stuff.
Click to expand...
Microsoft do not have to negotiate a buyer at a "fair" price. If they can't find a buyer the CMA will find one for them.
 
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ToadMan said:
This is probably why MS is quiet right now publicly at least - working out suitors for the divestment, working out price and other bits. Then they can respond with a plan or pull out if they're unable to find a suitable home for the divested stuff.
Click to expand...
I really doubt Microsoft is even looking at divestment (for exactly the reasons you listed), maybe they're entertaining the idea, but the bulk of their efforts are probably geared toward convincing the CMA to accept a behavioral remedy proposal.
 
POKEYCLYDE said:
I really doubt Microsoft is even looking at divestment (for exactly the reasons you listed), maybe they're entertaining the idea, but the bulk of their efforts are probably geared toward convincing the CMA to accept a behavioral remedy proposal.
Click to expand...

Out of all the options that's the most unlikely one that they will accept correct?
 
MasterCornholio said:
Out of all the options that's the most unlikely one that they will accept correct?
Click to expand...
Behavioral remedies are the most unlikely the CMA will accept. But I think Microsoft won't even consider divestment unless it is heavily in their favour (just the CoD IP, which is not on the table).

Microsoft sees an avenue open for behavioral, so they're going full force that way (is my guess).

Had the CMA not left that door open, I bet Microsoft would have backed away from the deal by now. (Maybe they'd keep it going to get their hands on what they can subpoena from Sony, but I truly believe Microsoft won't divest)
 
laynelane said:
I wonder if, at least for now, they are more focused on putting forward behavioral remedies. There's also the hurdles represented by the FTC and EU still in play too.
Click to expand...

But the behavioural remedies have to match divestment at least in the eyes of the CMA. And then that has to pass the EU and FTC.

That's a lot of effort and still ends up with net divestment equivalence - not sure how that is easier or beneficial compared to divestment for MS.
 
POKEYCLYDE said:
Behavioral remedies are the most unlikely the CMA will accept. But I think Microsoft won't even consider divestment unless it is heavily in their favour (just the CoD IP, which is not on the table).

Microsoft sees an avenue open for behavioral, so they're going full force that way (is my guess).

Had the CMA not left that door open, I bet Microsoft would have backed away from the deal by now. (Maybe they'd keep it going to get their hands on what they can subpoena from Sony, but I truly believe Microsoft won't divest)
Click to expand...

If you what you say is correct then Microsoft is betting against all odds. This will probably lead them to dropping the deal if they actually want COD that badly.
 
POKEYCLYDE said:
I really doubt Microsoft is even looking at divestment (for exactly the reasons you listed), maybe they're entertaining the idea, but the bulk of their efforts are probably geared toward convincing the CMA to accept a behavioral remedy proposal.
Click to expand...

Divestment is a known process though.

But a behavioral solution? Seems like that's never been achieved on this scale by anyone.

I'm not gonna say it's unachievable to someone - but MS just doesn't seem to be very good at this. And, having gone through the work of doing this they still end up with net equivalent divestment.

They don't gain anything through doing that work but do take on risk and timescale bloat.

Having said that, its clear this is an issue of pride for MS - they're already being irrational so this would be more evidence of that.
 
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MasterCornholio said:
If you what you say is correct then Microsoft is betting against all odds. This will probably lead them to dropping the deal if they actually want COD that badly.
Click to expand...
I agree 100%. I'd put there success chances somewhere below 5%. They'd essentially have to roll a nat 20 to get this deal through ahaha.
 
DenchDeckard said:
No changes lol.

It would be crazy if this took a curve ball and the hardware guys had to goto court and it was somehow found out that the hardware teams had been breaking nda and discussing other companies specs and design with one another.

I doubt there would be a paper trail bout it would be amazing to see something where AMD and Microsoft or Sony were caught out discussing the competitors box in detail.

Would be great just for the drama.
Click to expand...
I mean if something like that is happening it's definitely going both ways and would be found in discovery of a trial
 
ToadMan said:
But the behavioural remedies have to match divestment at least in the eyes of the CMA. And then that has to pass the EU and FTC.

That's a lot of effort and still ends up with net divestment equivalence - not sure how that is easier or beneficial compared to divestment for MS.
Click to expand...

I see what you're saying, but am unclear whether divestment is an option that MS would really consider. They may choose to walk away from the deal if no other agreement can be reached.
 
ToadMan said:
I'm not gonna say it's unachievable to someone - but MS just doesn't seem to be very good at this. And, having gone through the work of doing this they still end up with net equivalent divestment.

They don't gain anything through doing that work but do take on risk and timescale bloat.
Click to expand...
I don't think it's equivalent to divestment. They get the profit and some control. They'd be able to decide the release schedule and put those developers on other projects. They wouldn't have to maintain the current Call of Duty pipeline (yearly release). They could have those studios collaborate with and give their expertise to other studios under Microsoft. There are tons of reasons to keep go the hard route of behavioral over divestment. One is Call of Duty on Gamepass. It just would have to be available to all other game subscription services at FRAND terms.

I think they view that as a path worth trying for.
 
laynelane said:
I see what you're saying, but am unclear whether divestment is an option that MS would really consider. They may choose to walk away from the deal if no other agreement can be reached.
Click to expand...

Well yeah that's of course likely.

But the impact on the MS and xbox brands of just walking away now? I mean how do they spin this as "ok" nevermind "good" for their prospects?

It's a PR disaster, sets them back 18 months in a generation that is speeding by them, and they have nothing to show in market progress and not much to point at in the future, except a lot of work to compete for market position on genuine endeavor rather than what they can buy.

So the consequences of not trying to find a way through are potentially worse for xbox than taking a poisoned deal.

But its just spitballing for now. The first move has been made, everyone is curious what MS's response will be now.
 
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ToadMan said:
Questions, questions…. Did you find out how the pfizer ruling applies to this yet?

Where do the regulators say they enforce equality of outcome?
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I keep asking questions because you keep on avoiding answers.

I suppose it relates in that there is a path to appeal tribunal and Supreme Court for CMA findings.

Its not equality of outcome, it's that the outcome won't create a monopolistic environment, harm competition, and/or result in a negative for consumers.
 
POKEYCLYDE said:
I don't think it's equivalent to divestment. They get the profit and some control. They'd be able to decide the release schedule and put those developers on other projects. They wouldn't have to maintain the current Call of Duty pipeline (yearly release). They could have those studios collaborate with and give their expertise to other studios under Microsoft. There are tons of reasons to keep go the hard route of behavioral over divestment. One is Call of Duty on Gamepass. It just would have to be available to all other game subscription services at FRAND terms.

I think they view that as a path worth trying for.
Click to expand...

Well if they get the profit and control then their behavior remedy isn't the equivalent of the divestment regulators want.

I envisage the contentious parts of ABK - COD obviously and whatever else the regulators say is a problem, having to be at least a wholly owned subsidiary of MS with separate management and financial controls. Does that still count as a behavior remedy? Not sure but MS wouldn't need a 3rd party buyer.

In this scenario, MS don't have control and don't get the "profit" - they do though have an asset which they can recognise value and growth from (or a loss if it sinks of course).

Then that subsidiary has checks and balances to ensure it operates entirely independent of MS in the market place. But the regulators don't want to police that so it'll be something that limits the engagement of this subsidiary with MS.

Seems like a lot of fuss but pride is at stake so who knows what lengths MS will go to to lock in a "win" from this.
 
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Hero of Spielberg said:
I keep asking questions because you keep on avoiding answers.

I suppose it relates in that there is a path to appeal tribunal and Supreme Court for CMA findings.

Its not equality of outcome, it's that the outcome won't create a monopolistic environment, harm competition, and/or result in a negative for consumers.
Click to expand...

Nah man. You've been given straight answers by many people - but you don't like the answers you get and try to find ways out.

Again you're regurgitating the same incorrect information you had before. CMA findings are not contestable.

Find an example to the contrary.

Your second point demonstrates exactly what you said - in the opinion of the CMA and other regulators, the outcome of this acquisition will be negative for consumers. Hence the block.

MS is entitled to gain market share through approved methods - acquisition is, in this case, not an approved method.
 
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ToadMan said:
Well if they get the profit and control then their behavior remedy isn't the equivalent of the divestment regulators want.

I envisage the contentious parts of ABK - COD obviously and whatever else the regulators say is a problem, having to be at least a wholly owned subsidiary of MS with separate management and financial controls. Does that still count as a behavior remedy? Not sure but MS wouldn't need a 3rd party buyer.

In this scenario, MS don't have control and don't get the "profit" - they do though have an asset which they can recognise value and growth from (or a loss if it sinks of course).

Then that subsidiary has checks and balances to ensure it operates entirely independent of MS in the market place. But the regulators don't want to police that so it'll be something that limits the engagement of this subsidiary with MS.

Seems like a lot of fuss but pride is at stake so who knows what lengths MA will go to to lock in a "win" from this.
Click to expand...
I think you're viewing divestment or what would equate to divestment as the only possibility. Where you should be thinking what does the CMA want? They want to make sure Microsoft doesn't use Call of Duty to harm competition.

As long as Microsoft doesn't use Call of Duty to do that, they can still profit off of it and control the studios behind it. Microsoft could use Activision to it's advantage as long as Microsoft can address the worries/theories of harm with a behavioral remedy package.

Don't get me wrong, I do not believe this is a likely outcome. That is a huge burden of proof on Microsoft, one I'm not sure they'd be able to address. But there's a non-zero chance of that happening.

CMA is worried about access to Call of Duty and not using it to gain an advantage or harm competitors. They're not worried about Microsoft getting a boost in profits or using ABK's expertise to advantage themselves overall.
 
gothmog said:
It's been nothing but gaslighting recently so some of us are a bit defensive. Nothing personal. We all try to be slightly respectful around here.

Take 2 would be interesting. I was thinking Amazon. They had some success setting up some studios but I think they suffered by not having the leadership that could execute well. Lots of false starts and unreleased garbage. Buying a publisher might help them have some success as a third party. Especially since their hardware division is basically on a skeleton crew. They wouldn't be that interested in a console given where they are at.
Click to expand...
No way Amazon will be allowed to get their hands on acti. One of the concerns of the CMA was Microsofts cloud and Amazon has their own cloud service ( is Luna still a thing?).
 
ToadMan said:
Nah man. You've been given straight answers by many people - but you don't like the answers you get and try to find ways out.

Again you're regurgitating the same incorrect information you had before. CMA findings are not contestable.

Find an example to the contrary.

Your second point demonstrates exactly what you said - in the opinion of the CMA and other regulators, the outcome of this acquisition will be negative for consumers. Hence the block.

MS is entitled to gain market share through approved methods - acquisition is, in this case, not an approved method.
Click to expand...


-1. Appeals of CMA decisions go to the Competition Appeals Tribunal https://www.catribunal.org.uk/ (clue is in the name).

-2. Yes, they make decisions on the outcome! I'm glad you finally get it! They also provide potential remedies and approve some acquisitions without remedies at all. I.e. market share can be 'bought' as long as it doesn't meet any of the criteria I mentioned earlier.
 
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DenchDeckard said:
Imagine if the rest of the world passes this and MS did just fuck the UK off. How crazy would that be. 😳
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If it was Xbox alone this might have worked, but this is about Microsoft as a whole, and they are not going to give away all their UK business (cloud, office, windows) just for the gaming division
 
Helghan said:
If it was Xbox alone this might have worked, but this is about Microsoft as a whole, and they are not going to give away all their UK business (cloud, office, windows) just for the gaming division
Click to expand...

Would it affect the whole of Microsoft? Why would it affect Windows and office etc?
laynelane said:
Hope springs eternal. :messenger_grinning_sweat:
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I was just speaking to a lawyer and they said with their limited knowledge of it MS could literally say that's fine we won't operate those in the UK as the profits from King and call of duty mobile etc in Asia will far eclipse ABK operating profits in the UK.

But maybe there is some details we aren't aware of that would stop this.
 
Helghan said:
If it was Xbox alone this might have worked, but this is about Microsoft as a whole, and they are not going to give away all their UK business (cloud, office, windows) just for the gaming division
Click to expand...
They could....maybe do what Disney did with Fox.
Fox Sport in Mexico is not owned by Disney cuz Mexico didnt let the deal go through.
In the UK Activision Blizzard King is NOT a division of Microsoft and is run by someone else.
Highly highly highly unlikely.
 
DenchDeckard said:
I was just speaking to a lawyer and they said with their limited knowledge of it MS could literally say that's fine we won't operate those in the UK as the profits from King and call of duty mobile etc in Asia will far eclipse ABK operating profits in the UK.

But maybe there is some details we aren't aware of that would stop this.
Click to expand...

You do realise that if Microsoft wants to make other acquisitions of this size the CMA will be looking at how they reacted to this one correct?
 
Black_Stride said:
They could....maybe do what Disney did with Fox.
Fox Sport in Mexico is not owned by Disney cuz Mexico didnt let the deal go through.
In the UK Activision Blizzard King is NOT a division of Microsoft and is run by someone else.
Highly highly highly unlikely.
Click to expand...

This is what they were saying. ABK would still be ABK but owned by MS. They said that ABK could just sense operations in the UK but that would only be an option if every other body passes it. So the rest of the world including Europe, leaving only the UK with an issue.
 
Hero of Spielberg said:
-1. Appeals of CMA decisions go to the Competition Appeals Tribunal https://www.catribunal.org.uk/ (clue is in the name).

-2. Yes, they make decisions on the outcome! I'm glad you finally get it! They also provide potential remedies and approve some acquisitions without remedies at all. I.e. market share can be 'bought' as long as it doesn't meet any of the criteria I mentioned earlier.
Click to expand...

1. Sure? So what appeal would MS bring and what would the CAT do with it?

You posted pfizer as your example. Thats gone it seems. Poor pfizer …. Any others?

2. Really? Link to where you think they do this stuff, because … well they don't. Not in the case of MS-ABK anyway.

I really want to give you a clue, but …. Well later maybe.

Oh - your use of method and outcome is incorrect here too. Method is how MS gains market share and outcome is whether MS is successful …
 
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DenchDeckard said:
This is what they were saying. ABK would still be ABK but owned by MS. They said that ABK could just sense operations in the UK but that would only be an option if every other body passes it. So the rest of the world including Europe, leaving only the UK with an issue.
Click to expand...

Then there's the EC and FTC.
 
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