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[Satansblade]

- complains about someone with source "rewriting history"
- basically rewriting history himself with zero source.

I can find a million articles about Sony doing this against Nintendo.

I ain't nitpicking, do a Google search yourself.

I don't care either way that you or someone else doesn't like what Sony did.

I just find it funny that people are arguing about Sega and Sony, when Sony stabbed Nintendo in the back.

That's all.

Ummmm, Nintendo stabbed Sony in the back. They were making a console with Sony, and went to panasonic mid development. Man, some of you love rewriting history. Like the other guy in this thread pretending Xbox put Sega out of business (Xbox had just launched, and Sega was coming off multiple hardware failures, xbox had no part in it).

The best part of this thread are fanboys pretending they know more than lawyers and CEO's about the law and these companies. This thread has gotten a bit hilarious

 

[Yoboman]

In some ways, the MS ABK merger has the possibility to be the start of Xbox downfall.

There is the risk of MS screwing up the management of ABK like they have been doing with their studios and MS will eventually get tired of Xbox division fails.

Then there is Sony reaction to it, it can go from nothing to serious damage to the Xbox division.

It's a guessing game at this point.

There's not really a risk to Xbox

I do worry if they stretch themselves too thin that they'll start to cut off the under performing devs who will simply cease to exist. I mean its technically happened already with 343, but say Hellblade 2 is a commercial bomb? Or the next game from Tango doesn't push any subs / engagement

Maybe the ones more focused on single player content aren't able to retain audiences past a few weeks so Microsoft doesn't see the value in them

 

[Satansblade]

I'm honestly really curious if they are going to keep kotick or not. The obvious PR move, which xbox seems to love, is to fire kotick. This would be a massive mistake because as much as I hate him, he got ABK to where they are at now.

CoD and Blizzard got EA to where they are now. He's certainly an excellent CEO, but CEO's don't look after shit like game development, they have peons to do that work for them. I doubt Kotick would be a le to tell CoD from Battlefield by any metric but the balance sheets.

That's the point though, a good CEO knows how to delegate.

 

[TheGodfather07]

Is the Rykan vs Ass of Can Whooping battle over? These man arguing over nothing for hours straight. I went to sleep, woke up and they were still at it!

 

[Ass of Can Whooping]

Is the Rykan vs Ass of Can Whooping battle over? These man arguing over nothing for hours straight. I went to sleep, woke up and they were still at it!

Season 1 is over. Don't know if we're funding season 2 yet

 

[MasterCornholio]

Not only does that article have no details of any incident where "Sony stabbed Nintendo in the back," it also details how Nintendo was in charge of the decision making regarding PlayStation.

From the article "Nintendo had clearly become uncomfortable with the idea of giving Sony a leg-up into the video game market and creating a rival in the process, and had unceremoniously pulled the plug – little did it know, it had also unwittingly brought an end to its dominance of the domestic hardware arena at the same time."

Funny enough, I and many others know that what Nintendo did was sign a deal with Phillips, completely ghosting Sony. IIRC, Sony didn't know about the CD-i until it was announced. Who stabbed who in the back?
So yes, you are actually trying to rewrite history and I am calling you out.

And that's how derpy Link was born.

 

[SportsFan581]

Wow, the train is really in the ravine now, I saw the track a few miles back. LOL

There is some good nuggets in the last few pages. People complaining about others just posting their opinions?

Is this not a discussion board? Would be more of a news bulletin board if opinions were off the table.

To totally jump off topic with the rest of the posters, regarding Sony and their competitors. IMO, I don't think Sony directly destroyed anyone. They were a bigger and better financed company in comparison to their rivals at the time and they used their strengths to better position themselves. Neither Sega nor Nintendo (Nintendo only remained technologically competitive for just one more generation after the PS1 launch) had the capability to compete in the new market, though Nintendo obviously adapted to the situation better. And adapt would be exactly what Sony would do if MS suddenly reshaped the market with GP or something like that.

 

[PaintTinJr]

Yes but it's an other contradiction on their side.
They removed the console market SLC from the equation but they still use the word "provisionally", they're still asking for feedback but what this feedback is supposed to accomplish?
Are they ready for an other public 180 relatively to the console market?
The decision would be a joke and would be immediatly called out for procedural mistakes by Microsoft.
Sony should call out the whole thing as well in their upcoming reply since dropping the console market SLC altogether without a clear proof that Microsoft would not be able to sustain the losses to foreclose COD access is a super weak analysis on their side.
But it's totally unclear if this could lead to somewhere in the UK legal system.

In any case we'll find out what happens in the next few weeks, if Sony's legal team believes they have been totally put out of the equation we'll see them trying to get the best deal they can with MS before the EU/CMA make their final decision. If instead they believe there are possibilities to appeal in some way, to prove procedural mistakes and that the FTC actually has some chances to drag this on for a good while they might hold their position.

It wouldn't be another public 180 for them, because even though we've mostly been treating the CMA/FTC/EC as the prosecution in the regulation, the CMA have made it clear they are more like a judge, who's job it is to weigh up the arguments of the concerned parties.

Just like a judge they will have a starting viewpoint, but the decisions rendered are by strength of the arguments made, even if that results in the wrong decisions, like saying the console SLC from ATVI acquisition isn't there. We all see it, but the evidence needs to support that

 

[adamsapple]

Wow, the train is really in the ravine now, I saw the track a few miles back. LOL

 

[Ar¢tos]

There's not really a risk to Xbox

I do worry if they stretch themselves too thin that they'll start to cut off the under performing devs who will simply cease to exist. I mean its technically happened already with 343, but say Hellblade 2 is a commercial bomb? Or the next game from Tango doesn't push any subs / engagement

Maybe the ones more focused on single player content aren't able to retain audiences past a few weeks so Microsoft doesn't see the value in them

Investors/shareholders want to see profits. Right now Zenimax is being sacrificed to increase Gamepass numbers. Games cost the same to develop, all potential sales from Playstation were removed and potential sales on Xbox/pc greatly reduced by putting their games day one on gamepass. Even being for the "greater good", Zenimax still has to report numbers and investors won't like to see negative results, even if it means more gamepass users (the profits from the lost sales would be much higher than the gain from Gamepass subscriptions).
Now imagine the same eventually happening with Activision-Blizzard games, either by MS choice or as a last resort vengeance (really really desperate last resort) move from Sony (as a platform holder they can deny whatever games they want from releasing on PlayStation and no regulator or court can force them to accept games on their platforms, if the contracts are over), it would hurt Sony, but for MS it would be a 70bn investment that just bleeds money out of every hole on top of the 3bn Zenimax money drain.
All they could do is seriously increase Gamepass cost and risk making users angry and even lose users.

If gamepass subscriptions don't increase Massively, the shareholders pressure will make Zenimax studios either go back to releasing games on PlayStation or changing their releases to mostly AA gamepass filler games with a AAA game every 3-4 years.

 

[Elios83]

It wouldn't be another public 180 for them, because even though we've mostly been treating the CMA/FTC/EC as the prosecution in the regulation, the CMA have made it clear they are more like a judge, who's job it is to weight up the arguments of the concerned parties.

Just like a judge they will have a starting viewpoint, but the decisions rendered are by strength of the arguments made, even if that results in the wrong decisions, like saying the console SLC from ATVI acquisition isn't there. We all see it, but the evidence needs to support that

I doubt the console concerns will be reconsidered again.
This whole turnaround is probably due to two factors, first they realized their calculations had a procedural mistake so not fixing it would result in a case easily disputable by recurring to CAT.
Second reason is probably political, some levers were moved, some people talked with other people and so on. They felt pressured to allign with EU.
It's more likely that CMA tries to block or ask structural remedies based on the cloud market alone than them changing their idea again on the console market.
And I don't think chances of the former are high anyway because Microsoft has offered stronger remedies for the cloud market and a few direct competitors already accepted them (see nVidia) so if they're happy with that why a regulator shouldn't?

That leaves the question to what Sony's going to do. At this point it's close to gambling territory for them.
They will try to give a feedback to CMA but what that could yield is uncertain to me.
They could bet on FTC now moving quickly forcing Microsoft to go to court and appealing if they lose, that could delay things an other year. But it could also cost them a lot of headaches with private documents exposed.
The safest option for them is to sign the best deal they can with Microsoft over COD.
Microsoft is unlikely to be able to withdraw from the offer while their behaviour and promises are still under the regulators' eyes.

 

[Sanepar]

Sony can't compete with MS in the money stakes, but they have good will and market relevance. If Sony gets enough exclusive content then people will buy their console to play those games.
On the other hand you don't need to buy an xbox or PC to play MS games. If you have a good internet connection you will be able to stream their games. You will definitely see more people having both consoles.
Content is king. If Sony has good content, people will come.

I agree but they have 19 studios. 3 are support studios. Games take 5 years to develop. Release 2-3 exclusivers per year will not be enough. They more studios at least if not publishers.

Ms will have 41 studios after this aquisition.

 

[ChuckeRearmed]

Investors/shareholders want to see profits. Right now Zenimax is being sacrificed to increase Gamepass numbers. Games cost the same to develop, all potential sales from Playstation were removed and potential sales on Xbox/pc greatly reduced by putting their games day one on gamepass. Even being for the "greater good", Zenimax still has to report numbers and investors won't like to see negative results, even if it means more gamepass users (the profits from the lost sales would be much higher than the gain from Gamepass subscriptions).
Now imagine the same eventually happening with Activision-Blizzard games, either by MS choice or as a last resort vengeance (really really desperate last resort) move from Sony (as a platform holder they can deny whatever games they want from releasing on PlayStation and no regulator or court can force them to accept games on their platforms, if the contracts are over), it would hurt Sony, but for MS it would be a 70bn investment that just bleeds money out of every hole on top of the 3bn Zenimax money drain.
All they could do is seriously increase Gamepass cost and risk making users angry and even lose users.

If gamepass subscriptions don't increase Massively, the shareholders pressure will make Zenimax studios either go back to releasing games on PlayStation or changing their releases to mostly AA gamepass filler games with a AAA game every 3-4 years.

Shareholders should first start asking questions during the investor call about anything else aside Azure first. Microsoft does not need ROI on their 70b. MSFT literally earned that amount while the deal is being approved so.

 

[ReBurn]

What part of BUNGIE CAN SET TERMS AND CONDITIONS ON THE SALE OF THEIR SHARES THAT ARE LEGALLY BINDING BECAUSE IT IS A PRIVATE COMPANY AND NOT A PUBLICALLY TRADED COMPANY is difficult for you to grasp, Can?

It was amazing to watch you become so enraged while being so confidently incorrect. The only difference between the purchase of a public company and a private company is who the shares are purchased from. The conditions for sale are agreed upon up front and once the sale is completed the seller has no more claim to what they sold. There can't be post-acquisition conditions between two companies because the seller doesn't own it any more. Once you sell something to someone you can't go take it back if you don't like what they do with it because it isn't yours any more.

It's more likely that Bungie's independence relies upon them meeting specific performance targets. Sony doesn't want to run that business themselves at this time, so they left the board of directors intact and placed one of their executives on the board as the parent company's voice. But if Bungie doesn't meet Sony's expectations they can absolutely dissolve the Bungie board of directors and remove their leadership team because they own the company.

The only legally binding contracts would be with the key individuals they wanted to retain in the transition, and those likely have performance requirements as well. So individuals could probably sue if they felt their employment contracts were violated, but Bungie Inc. can't sue Sony be it would be Sony suing itself.

 

[reksveks]

Shareholders should first start asking questions during the investor call about anything else aside Azure first. Microsoft does not need ROI on their 70b. MSFT literally earned that amount while the deal is being approved so.

Yeah, it's been a while since publicly shareholders has really asked about anything other than Azure. I suspect that a question around the OpenAI investments and how that is going next earnings call. Should get a comment about the ABK deal, cause in theory the UK/EU may be sorted by then. I don't think we have a date yet for the MS earnings call.

 

[TheGodfather07]

I just want the deal over and done with at this point. Dragging it out benefits no one. Get it over with so we can actually start looking forward to some new game announcements.

 

[zedinen]

Questions for Xbox bros:

• What do you think Sony will do to respond to this acquisition once approved?
• What would you be okay with? And what would you be not?

A few examples to clarify the questions:

• Sony may stay the course: increase current studios organically by adding more developers and buying smaller studios every now and then.
• Sony may start acquiring smaller publishers (< $10 billion): SquareEnix, Capcom, CDPR, FromSoftware, Ubisoft, Sega, etc.
• Sony may attempt a bigger publisher (> $10 billion): Take-Two, EA, etc.
• Sony may go all in timed-exclusivity deals.
• Sony may go all in on full-exclusivity deals for major multiplatform franchises
• Other stuff like this that I didn't list here.

What do you think they are most likely to do? And what would you be okay with/not okay with?

1) Investors are unfazed

YTD

2) PS will sell 7M+ in the US for the first time in two decades

Amazon US
#8 PS5 Console - GOW Ragnarök Bundle
#16 NSW Mario Choose One Bundle
#20 PS5 Console
#44 PS5 Digital Edition - GOW Ragnarök Bundle
#68 NSW - OLED Model
#87 PS5 Digital Edition



3) PS5 will break PS2 record sales

Q4 6.08 M
FY 22.52 M

4) Sony Group will allow SIE to invest its own cash flows in PlayStation. The rest of Sony should learn to stand on its own two feet.

-PS Free Cash Flow (FY13 - FY17) 700 bn yen+

F


-PS Free Cash Flow (FY18 - FY21) 929.1 bn yen

5) G&NS (PS) will become the dominant segment within Sony Group, thanks to Microsoft

6) Publishers in Japan and Europe are cheap (Enterprise Value)

Capcom, Embracer, Koei Tecmo ($6 - $7 bn)

Square Enix, Ubisoft, Sega Sammy, Kadokawa, CD Projekt ($2 - $4bn)



7) SIE will acquire publisher(s), expand PS Studios , Bungie and their IPs

8) Acquisition wars are fought with money, but they are won by synergies

Sony has already won the first round. The missing piece, Insonmiac Games, was priced at $229 milllion.

9) Microsoft is trying to solve a problem by creating a bigger one

Sony can handle Microsoft with ease ... Gates, Ballmer, Mattrick, Nadella , Spencer are easy to read.

Historically, Sony has only been beaten by unpredictable midgets (90s Apple and Samsung)


Apple sales in 1999 $6.1 bn (Sony was 10x bigger)

10) Lina Khan is right: Concentration begets concentration, independent publishers will struggle to survive and consumers will pay the price

Consolidation should be stopped ASAP

 

[ChuckeRearmed]

Yeah, it's been a while since publicly shareholders has really asked about anything other than Azure. I suspect that a question around the OpenAI investments and how that is going next earnings call. Should get a comment about the ABK deal, cause in theory the UK/EU may be sorted by then. I don't think we have a date yet for the MS earnings call.

Yeah, I think they will ask about AI 100%. And maybe in the future they will start asking about gaming....on mobile Because it relates to Apple and Google.

The call should be at the end of April - last time it was on 26th of April.

 

[PaintTinJr]

I doubt the console concerns will be reconsidered again.
This whole turnaround is probably due to two factors, first they realized their calculations had a procedural mistake so not fixing it would result in a case easily disputable by recurring to CAT.
Second reason is probably political, some levers were moved, some people talked with other people and so on. They felt pressured to allign with EU.
It's more likely that CMA tries to block or ask structural remedies based on the cloud market alone than them changing their idea again on the console market.
And I don't think chances of the former are high anyway because Microsoft has offered stronger remedies for the cloud market and a few direct competitors already accepted them (see nVidia) so if they're happy with that why a regulator shouldn't?

That leaves the question to what Sony's going to do. At this point it's close to gambling territory for them.
They will try to give a feedback to CMA but what that could yield is uncertain to me.
They could bet on FTC now moving quickly forcing Microsoft to go to court and appealing if they lose, that could delay things an other year. But it could also cost them a lot of headaches with private documents exposed.
The safest option for them is to sign the best deal they can with Microsoft over COD.
Microsoft is unlikely to be able to withdraw from the offer while their behaviour and promises are still under the regulators' eyes.

But that isn't how the nuanced wording of the amendment reads IMHO. They will happily return to the "maybe" won't foreclose problem so long as new data is provided which is obviously the real snag.

If Sony can just show them the gains they made with PS4 CoD relative to PS3, when Xbox One imploded to substantiate how much money is there to be made in a foreclosure strategy, especially when factoring in Live Gold gains, MTX gains, increased average LTV gains, and in Microsoft's and Xbox's case - given they spend stupid amounts on advertising MSFT over $10b per year - how much they would save on advertising by using ATVI adverts to promote Xbox as first party exclusive, and all this would also swing console sales meaning that the $100-200 loss per console each gen would likely be fixed too from such a strategy.

We only need look back at how news of ATVI becoming Microsoft/Xbox first party was received by all gamers on gaf - prior to regulator messaging -to know that gamers as a whole can instinctively see the foreclosure strategy of the $2T company regardless of how the figures ae presented by accounts to regulators, even the amended numbers from a few days ago have seen this thread immediately jump to how can PlayStation counter this acquisition talk. It is just a shame herd instinct can't be used as evidence for the obvious SLC in the console market.

 

[Ozriel]

Maybe the ones more focused on single player content aren't able to retain audiences past a few weeks so Microsoft doesn't see the value in them

Microsoft certainly seemed happy with the Gamepass performance of Hi-Fi Rush, Atomic Heart and High on Life

 

[b6a6es]

Questions for Xbox bros:

• What do you think Sony will do to respond to this acquisition once approved?
• What would you be okay with? And what would you be not?

A few examples to clarify the questions:

• Sony may stay the course: increase current studios organically by adding more developers and buying smaller studios every now and then.
• Sony may start acquiring smaller publishers (< $10 billion): SquareEnix, Capcom, CDPR, FromSoftware, Ubisoft, Sega, etc.
• Sony may attempt a bigger publisher (> $10 billion): Take-Two, EA, etc.
• Sony may go all in timed-exclusivity deals.
• Sony may go all in on full-exclusivity deals for major multiplatform franchises
• Other stuff like this that I didn't list here.

What do you think they are most likely to do? And what would you be okay with/not okay with?

You forgot

* Sony selling SIE to Apple or Amazon, takes that cash flow and buys Namco Bandai thus becoming its new G&NS division (alongside Bungie, who is more interested in Sony's multimedia power than PS)

 

[ToadMan]

It wouldn't be another public 180 for them, because even though we've mostly been treating the CMA/FTC/EC as the prosecution in the regulation, the CMA have made it clear they are more like a judge, who's job it is to weight up the arguments of the concerned parties.

Just like a judge they will have a starting viewpoint, but the decisions rendered are by strength of the arguments made, even if that results in the wrong decisions, like saying the console SLC from ATVI acquisition isn't there. We all see it, but the evidence needs to support that

Enough people comprehend the risk of this acquisition to our corner of the hobby, and I believe the regulators do too.

The problem for any regulator is to accurately identify and quantify the SLC such that it will stand up to a potential court hearing or even public scrutiny given they're working for consumers on all sides in this.

It's not easy to do that when there aren't many competitors and those providing the data have vested interests. The CMA used a formula, plugged in some data and identified an SLC - now they've updated the formula, used different numbers, and can't find the SLC any more.

Words, "incentives" and past behavior aren't enough by themselves to stand up in court, regulators need something concrete to justify their actions. So, for the CMA to 180 again they'd need some robust financial formulae and/or data that once again identifies an SLC.

Doubtful anyone has that - that's the problem with "unprecedented" deals, everything is breaking new ground and fixing things after they're broken is much more problematic.

It's how US healthcare became such a mess amongst other things.

 

[Ar¢tos]

You forgot

* Sony selling SIE to Apple or Amazon, takes that cash flow and buys Namco Bandai thus becoming its new G&NS division (alongside Bungie, who is more interested in Sony's multimedia power than PS)

Why would Sony sell its cash cow?

 

[feynoob]

1) Investors are unfazed

YTD

2) PS will sell 7M+ in the US for the first time in two decades

Amazon US
#8 PS5 Console - GOW Ragnarök Bundle
#16 NSW Mario Choose One Bundle
#20 PS5 Console
#44 PS5 Digital Edition - GOW Ragnarök Bundle
#68 NSW - OLED Model
#87 PS5 Digital Edition



3) PS5 will break PS2 record sales

Q4 6.08 M
FY 22.52 M

4) Sony Group will allow SIE to invest its own cash flows in PlayStation. The rest of Sony should learn to stand on its own two feet.

-PS Free Cash Flow (FY13 - FY17) 700 bn yen+

F


-PS Free Cash Flow (FY18 - FY21) 929.1 bn yen

5) G&NS (PS) will become the dominant segment within Sony Group, thanks to Microsoft

6) Publishers in Japan and Europe are cheap (Enterprise Value)

Capcom, Embracer, Koei Tecmo ($6 - $7 bn)

Square Enix, Ubisoft, Sega Sammy, Kadokawa, CD Projekt ($2 - $4bn)



7) SIE will acquire publisher(s), expand PS Studios , Bungie and their IPs

8) Acquisition wars are fought with money, but they are won by synergies

Sony has already won the first round. The missing piece, Insonmiac Games, was priced at $229 milllion.

9) Microsoft is trying to solve a problem by creating a bigger one

Sony can handle Microsoft with ease ... Gates, Ballmer, Mattrick, Nadella , Spencer are easy to read.

Historically, Sony has only been beaten by unpredictable midgets (90s Apple and Samsung)


Apple sales in 1999 $6.1 bn (Sony was 10x bigger)

10) Lina Khan is right: Concentration begets concentration, independent publishers will struggle to survive and consumers will pay the price

Consolidation should be stopped ASAP

Hope the people here can relax little bit.

 

[feynoob]

But that isn't how the nuanced wording of the amendment reads IMHO. They will happily return to the "maybe" won't foreclose problem so long as new data is provided which is obviously the real snag.

If Sony can just show them the gains they made with PS4 CoD relative to PS3, when Xbox One imploded to substantiate how much money is there to be made in a foreclosure strategy, especially when factoring in Live Gold gains, MTX gains, increased average LTV gains, and in Microsoft's and Xbox's case - given they spend stupid amounts on advertising MSFT over $10b per year - how much they would save on advertising by using ATVI adverts to promote Xbox as first party exclusive, and all this would also swing console sales meaning that the $100-200 loss per console each gen would likely be fixed too from such a strategy.

We only need look back at how news of ATVI becoming Microsoft/Xbox first party was received by all gamers on gaf - prior to regulator messaging -to know that gamers as a whole can instinctively see the foreclosure strategy of the $2T company regardless of how the figures ae presented by accounts to regulators, even the amended numbers from a few days ago have seen this thread immediately jump to how can PlayStation counter this acquisition talk. It is just a shame herd instinct can't be used as evidence for the obvious SLC in the console market.

MTX numbers say HI.

 

[Godot25]

According to your logic, Sony never took games from xbox then.
We can play this game all day.

Ehh.. Yeah.

I never understood crying from both sides. Both Microsoft and Sony are trying to do what's in their power to be successful. That's why I was never really "angry" at Sony while they moneyhated KOTOR, Deathloop, Ghostwire etc. It's entirely fine.

But same is fine for Microsoft. Just because Sony can't afford ABK does not mean Microsoft should be forbid from buying them. And if someone wants to argue that it isn't fair because Microsoft is trillion dollar company, I have one thing to say: Business is nor fair.

Market currently dictates that Sony can afford to moneyhat because it is cheaper for them. But on the other hand Microsoft thanks to their Azure success can reinvest their profits to speed up their gaming targets.

 

[SneakersSO]

Waiting for S SneakersSO analysis of today's announcements....

Anyhow, it'll be interesting to see how or IF Sony responds to this with more acquisitions. I had a feeling that if the deal got blocked, they'd continue their normal targetted acquisitions of smaller studios like normal. But now that the deal is likely to go through, I'm not so sure. Anything, outside of maybe EA, is pretty much on the table. I don't like that it's going to go down this path, but it likely will.

Finally caught up! Its interesting, for sure. I mean, you're not gonna get a take from me that isn't in-line with everyone else. The ATVI stock price finally, after all this time, rallied on this news to start approximating the actual sale price that MS is willing to throw down for all this, although we are still like $10 p/s off from where it should be.

The first thing to note is that the CMA could still very well block the deal over their concerns for the Cloud market, although I do believe that is pretty unlikely. The route the CMA took on this is a touch unusual, but the %s that their original findings/estimates showed were already low enough that some folks were questioning if this was a big enough effect to even block it over. The EU could also still move towards divestment or behavioral remedies, although even I don't think thats what the EU will do. And ofc, the FTC has its case, although that will take over 6months before we start seeing real progress.

As for the route for the remainder of this deal, I think its pretty clear how this'll go: if the CMA's final report in April approves of the deal, as well as the EC also approving it, then MS is just going to close the acquisition and basically dare the FTC to file an injunction in Federal Court and get this in front of a Federal Judge, likely in a district they feel will be friendly towards them, more so than the FTC's court will be.

As for Sony, like I detailed way back when, their opposition to this deal was always a win/win for them. Sony represented something like 15-19% of all of ATVI's earnings (MS was so small they didn't even get a slice in their earnings breakdown by platform), and CoD was responsible for $1b in revenue for SIE per year. If regulators are okay with MS continuing their foreclosure strategy, which is precisely what this is, then they are also going to be okay with Sony going in and purchasing/securing their revenue streams, especially since unlike MS, Sony is pretty open to continuing releasing on platforms that aren't theirs in the case of very big acquisitions.

Kadokawa, Square Enix, Capcom will become major factors for Sony, while they will seek to further invest into their relationship with GTA, I imagine.

 

[POKEYCLYDE]

MS has to rely on consolidation for the "Game Pass strategy" because they have completely failed at showing to the wider market why they should voluntarily offer their new releases Day 1 into a subscription service, without needing the owner of that subscription service to pay them a fat check. And even in those cases it has no sway on 3P AAA games.

Sub services cannibalize B2P game sales. The "fat check" is to make up for potential lost sales. AAA games are more likely to recoup their development costs and make profit through B2P sales. Why would 3rd party developers forego a fat check?

Your argument seemingly is "Microsoft hasn't convinced 3rd party developers to do something financially illogical, therefore the model sucks".

It's almost as if the revenue off the Game Pass subscription service is so low that Microsoft can't upfront offer a revenue-sharing payment model or payment model based on player traffic/downloads etc. that can match the actual sales revenue those very same games would get in a B2P model. And the promise of making up revenue through increased MTX purchases of content in the service aren't manifesting, not even for 1P AAA content like Halo Infinite.

And your argument here is "Microsoft isn't offering a financially illogical payment to 3rd party developers, therefore the model sucks".

There are pros and cons to being on Gamepass. Benefits include more people checking out your game that wouldn't have because the barrier of entry is much lower. The more people check out your game, better the reach word of mouth has, this has a compounding effect on how many people play your game (might even move B2P sales).
The downside to being in Gamepass is giving up potential B2P sales for a smaller guaranteed lump sum (some developers might view this as a positive too actually).

A revenue share model gives the developers all the benefit of being on Gamepass with none of the risk. It massively benefits 3rd party developers over Microsoft, therefore it's illogical.

And, since Microsoft have completely failed to show to the industry that a subscription model works in terms of revenue to the point where 3P would want to voluntarily provide their content (especially AAA games) to such services Day 1, they are trying to force the subscription model to work by just buying up that 3P content through acquiring the publishers who own it .

Again, voluntarily implies foregone payment. Your arguments heavily rely on one or both parties acting illogically.

Specifically in terms of the ABK acquisition? I think we're going to see some negative impacts rather soon. The moment games like Diablo IV and the newest COD are Day 1 in Game Pass, their sales revenue is going to take a huge dip. That will negatively affect total industry revenue. Lower industry revenue means more investors who may become apprehensive towards investing into companies in the industry, or banks becoming less willing to provide loans of certain sizes or even to certain companies (generally smaller ones).

Smaller industry revenue stopping investment is a weird one. Not going to say it's impossible, but it's improbable to affect many at all. And if Gamepass takes off in the way that Microsoft wants, it'll have the opposite effect.

And I say that because there is no reality where Game Pass revenue increases due to subscriber uptick to offset the potential total revenue drops.

Mathematically this statement is wrong and is counter to the reason why Microsoft is going hard into the subscription service model.

Currently Microsoft has 23 studios, let's say each one of those studios is making a AAA game, at $200M dev costs over 4 years. That is $1.15B in 1st party development for the year.
We don't know how much Microsoft spends on 3rd Party Gamepass deals every year. If we say $1.35B, we end up at $2.5B in Gamepass expenses. At 25M subscribers at an average of $10 a month. Gamepass would be making 3B in revenue a year. That is $500M in profit.

As subscribers grow, 1st party development costs stay the same. And 3rd party gamepass deals only get marginally more expensive.

At 50M subscribers. They'll be making somewhere in the range of $3.5B in profit. So this is a reality where subscriber uptick offsets potential total revenue drops.

 

[Thirty7ven]

Why would Sony sell its cash cow?

Some people really have an axe to grind with PlayStation.

Even if Sony decided no more hardware from them and turned into third party, PlayStation would still be the name used. He does bring up a point about Bandai Namco being a sensible purchase.

 

[gothmog]

Why would Sony sell its cash cow?

They wouldn't. This line of reasoning has the same amount of actual reality applied to it as the concept that the ABK deal failing would have Xbox close it's doors.

The most realistic take on this is that someone like Apple or Amazon attempts to buy Sony. This wouldn't be for PlayStation necessarily, but more for the consumer electronics and specifically TV areas. Stacking a proven product brand like PlayStation on top of that is icing on the cake.

 

[Solidus_T]

And that's how derpy Link was born.

Hot take: As much as people love to trash that crappy CD-i Zelda game, the content it's given us through the years makes it all worth it.

 

[suspicious mind]

Microsoft certainly seemed happy with the Gamepass performance of Hi-Fi Rush, Atomic Heart and High on Life

Wo long? It was 8th place on most played chart the week it released.

 

[MasterCornholio]

Hot take: As much as people love to trash that crappy CD-i Zelda game, the content it's given us through the years makes it all worth it.

Well I can't disagree there. Guess what's in the box?

 

[POKEYCLYDE]

Exactly, so still ls a lessening of competition. but just not the "substantial" lessening any more - is what the current data model shows. Third parties invited to respond, and Cloud SLC still the same, meaning the deal needs structural remedies or cancelled still, no?

One of the ways that the CMA would accept behavioral remedies is if relevant customer benefits (RCBs) outweighed any potential substantial lessening of competition (SLC).

The SLC for consoles was iron clad, had research and numbers behind what SLC would happen if Microsoft took CoD away from Playstation. With that SLC out of the way, micrososft is focused on cloud.

The cloud SLC are much harder to prove. Activision's actions regarding access to cloud providers proves that only the largest cloud providers (willing to accept licensing and royalty fees) would have access to CoD in the future (perhaps, only one cloud provider would have exclusive access).

Micrososft offering 10 year deals to a host of cloud gaming providers, raises the RCBs materially over any hypothetical SLC. Therefore meeting the criteria to accept a behavioral remedy.

 

[Elios83]

But that isn't how the nuanced wording of the amendment reads IMHO. They will happily return to the "maybe" won't foreclose problem so long as new data is provided which is obviously the real snag.

If Sony can just show them the gains they made with PS4 CoD relative to PS3, when Xbox One imploded to substantiate how much money is there to be made in a foreclosure strategy, especially when factoring in Live Gold gains, MTX gains, increased average LTV gains, and in Microsoft's and Xbox's case - given they spend stupid amounts on advertising MSFT over $10b per year - how much they would save on advertising by using ATVI adverts to promote Xbox as first party exclusive, and all this would also swing console sales meaning that the $100-200 loss per console each gen would likely be fixed too from such a strategy.

We only need look back at how news of ATVI becoming Microsoft/Xbox first party was received by all gamers on gaf - prior to regulator messaging -to know that gamers as a whole can instinctively see the foreclosure strategy of the $2T company regardless of how the figures ae presented by accounts to regulators, even the amended numbers from a few days ago have seen this thread immediately jump to how can PlayStation counter this acquisition talk. It is just a shame herd instinct can't be used as evidence for the obvious SLC in the console market.

Sony has probably already tried to use that card with the EU and it seems they were not listened, they might try again with the CMA but it probably doesn't stand legal tests to be taken seriously.
Maybe (I'm no legal expert), it can't be legally considered a realistic/credible scenario that a company is willing to take substantial losses just to damage a competitor even if Microsoft is absolutely in the financial position to take such actions.

Sony has limited options atm:
1)They can talk with the FTC and try to understand if they're willing to move quickly to bring Microsoft to court and prevent that the acquisition can be completed with an injunction.
Under this scenario Microsoft won't be able to complete the acquisition until 2024.
2)They can hope that the CMA still wants to block the acquisition and will try to do so using just the SLC about the cloud market.
3)They realize that the possibility of blocking the deal is gone and they move quickly to make a deal with Microsoft now that they're still under observation and can't break their promises without creating evidence against them.
4)They don't do anything trusting that Microsoft will keep their promises, that regulators are right that they won't make COD exclusive because it doesn't make financial sense to do so. All the legal work they have done goes to the benefit of nVidia, Nintendo and some unknown cloud companies. This is kinda stupid if not suicidal.

My bet is on number 3.

 

[SportsFan581]

One of the ways that the CMA would accept behavioral remedies is if relevant customer benefits (RCBs) outweighed any potential substantial lessening of competition (SLC).

The SLC for consoles was iron clad, had research and numbers behind what SLC would happen if Microsoft took CoD away from Playstation. With that SLC out of the way, micrososft is focused on cloud.

The cloud SLC are much harder to prove. Activision's actions regarding access to cloud providers proves that only the largest cloud providers (willing to accept licensing and royalty fees) would have access to CoD in the future (perhaps, only one cloud provider would have exclusive access).

Micrososft offering 10 year deals to a host of cloud gaming providers, raises the RCBs materially over any hypothetical SLC. Therefore meeting the criteria to accept a behavioral remedy.

Also, Xcloud is a separate thing from GP, some GP games aren't on there. If push came to shove, MS can just withhold CoD from their own cloud gaming platform, almost completely remove any SLC risk in cloud gaming with that one move alone. Though I agree with you and think they will just commit to putting their games on any cloud gaming platform out there where it is reasonably feasible, when the entire industry is backing the move it is harder to find an angle to say it is anti competitive.

 

[James Sawyer Ford]

If regulators are okay with MS continuing their foreclosure strategy, which is precisely what this is,

So you think the regulators aren't being completely honest in their about face on this deal? The CMA concluded that after "revisiting the numbers" it would essentially impossible for MS to foreclose CoD on Playstation. I have no idea how they come to that conclusion coming from a company like Microsoft with near infinite pocketbooks.

 

[reksveks]

Mathematically this statement is wrong and is counter to the reason why Microsoft is going hard into the subscription service model.

Currently Microsoft has 23 studios, let's say each one of those studios is making a AAA game, at $200M dev costs over 4 years. That is $1.15B in 1st party development for the year.
We don't know how much Microsoft spends on 3rd Party Gamepass deals every year. If we say $1.35B, we end up at $2.5B in Gamepass expenses. At 25M subscribers at an average of $10 a month. Gamepass would be making 3B in revenue a year. That is $500M in profit.

As subscribers grow, 1st party development costs stay the same. And 3rd party gamepass deals only get marginally more expensive.

At 50M subscribers. They'll be making somewhere in the range of $3.5B in profit. So this is a reality where subscriber uptick offsets potential total revenue drops.

Basically this.

Thicc is looking at it from the pov of 'potential profits' from full game sales but that's not how MS clearly are looking at the massively complex accounting. Primarily because most of the SW revenue for both Sony and Microsoft doesn't not come from full game sales.

 

[suspicious mind]

But ms doesnt want playstation dead. That would be incredibly stupid. Imagine apple comes in and buys sony. That would be a way bigger problem for ms.
No they are perfectly fine with ps doing ok. Its the lesser of potentialy much more dangerous evils.
For now they have to divide the high end cake by 2. Keep ps in good shape and a strong xbox and it will be super hard for a third party to enter the market if not impossible. This way the keep the market on lock. There always gonna be at least one competitor anyway.

 

[feynoob]

So you think the regulators aren't being completely honest in their about face on this deal? The CMA concluded that after "revisiting the numbers" it would essentially impossible for MS to foreclose CoD on Playstation. I have no idea how they come to that conclusion coming from a company like Microsoft with near infinite pocketbooks.

Infinite money doesn't mean you will want to lose money.
MS still wants to make money from their purchase. They will make it like Minecraft.

 

[James Sawyer Ford]

Infinite money doesn't mean you will want to lose money.
MS still wants to make money from their purchase. They will make it like Minecraft.

Yeah but I think Microsoft can easily stand to lose billions in the next 10 years in an attempt to make billions in the years that come after that.

 

[SportsFan581]

So you think the regulators aren't being completely honest in their about face on this deal? The CMA concluded that after "revisiting the numbers" it would essentially impossible for MS to foreclose CoD on Playstation. I have no idea how they come to that conclusion coming from a company like Microsoft with near infinite pocketbooks.

I think he's referring to the partial foreclosure strategy that PS has been running (and that Xbox was running prior to that) with perks and early access for their platform. Sony has been complaining that MS might do to them exactly what they have been doing themselves against MS already (even though MS has stated that they would not and that there would be parity in all releases). The CMA is now saying they don't care about that, and if MS decided to give itself early access and perks they don't have a problem with that because the game would ultimately still come to PS.

 

[MasterCornholio]

But ms doesnt want playstation dead. That would be incredibly stupid. Imagine apple comes in and buys sony. That would be a way bigger problem for ms.
No they are perfectly fine with ps doing ok. Its the lesser of potentialy much more dangerous evils.
For now they have to divide the high end cake by 2. Keep ps in good shape and a strong xbox and it will be super hard for a third party to enter the market if not impossible. This way the keep the market on lock. There always gonna be at least one competitor anyway.

I don't think the Japanese government would allow a foreign company to buy Sony.

 

[Andodalf]

So you think the regulators aren't being completely honest in their about face on this deal? The CMA concluded that after "revisiting the numbers" it would essentially impossible for MS to foreclose CoD on Playstation. I have no idea how they come to that conclusion coming from a company like Microsoft with near infinite pocketbooks.

MS wouldn't have to worry about the CMA getting mad if they did that, They would get their pants sued off by their shareholders for taking what is, by CMAs most optimistic estimations, Multiple billions of dollars in losses per year. A publicly shared company has a fiduciary's responsibility to make profit for their shareholders. Intentionally losing money like that is legitimately illegal

 

[suspicious mind]

I don't think the Japanese government would allow a foreign company to buy Sony.

I really dont know. I read some conflicting reports on that.

 

[KingT731]

Infinite money doesn't mean you will want to lose money.
MS still wants to make money from their purchase. They will make it like Minecraft.

The presumption is that they would operate in the benefit of business (to make revenue)

Yeah but I think Microsoft can easily stand to lose billions in the next 10 years in an attempt to make billions in the years that come after that.

It would be more determinant if the losses from that division would swing the overall business into the red which isn't likely at all.

 

[MasterCornholio]

I really dont know. I read some conflicting reports on that.

Seems very unlikely that they would allow a hostile takeover. Especially with a company like Sony. If it was some small Japanese developer they probably wouldn't do anything. But this us Sony we ate taking about.

 

[Elios83]

Finally caught up! Its interesting, for sure. I mean, you're not gonna get a take from me that isn't in-line with everyone else. The ATVI stock price finally, after all this time, rallied on this news to start approximating the actual sale price that MS is willing to throw down for all this, although we are still like $10 p/s off from where it should be.

The first thing to note is that the CMA could still very well block the deal over their concerns for the Cloud market, although I do believe that is pretty unlikely. The route the CMA took on this is a touch unusual, but the %s that their original findings/estimates showed were already low enough that some folks were questioning if this was a big enough effect to even block it over. The EU could also still move towards divestment or behavioral remedies, although even I don't think thats what the EU will do. And ofc, the FTC has its case, although that will take over 6months before we start seeing real progress.

As for the route for the remainder of this deal, I think its pretty clear how this'll go: if the CMA's final report in April approves of the deal, as well as the EC also approving it, then MS is just going to close the acquisition and basically dare the FTC to file an injunction in Federal Court and get this in front of a Federal Judge, likely in a district they feel will be friendly towards them, more so than the FTC's court will be.

As for Sony, like I detailed way back when, their opposition to this deal was always a win/win for them. Sony represented something like 15-19% of all of ATVI's earnings (MS was so small they didn't even get a slice in their earnings breakdown by platform), and CoD was responsible for $1b in revenue for SIE per year. If regulators are okay with MS continuing their foreclosure strategy, which is precisely what this is, then they are also going to be okay with Sony going in and purchasing/securing their revenue streams, especially since unlike MS, Sony is pretty open to continuing releasing on platforms that aren't theirs in the case of very big acquisitions.

Kadokawa, Square Enix, Capcom will become major factors for Sony, while they will seek to further invest into their relationship with GTA

About the FTC if they're serious and they believe that Microsoft might close the acquisition after the CMA/EU decisions they might decide to file an injunction quickly. In that case the acquisition would suffer a considerable delay if we consider that even if FTC loses they might appeal.

 

[feynoob]

The presumption is that they would operate in the benefit of business (to make revenue)

Which is why they won't take the game from PS.
Xbox will generate more money that way, and use that money to increase gamepass content.

They are already getting benefits by having COD marketing rights and putting the game on gamepass.

 

[DeepEnigma]

Amazing retort.
I'm glad your first reply had the word Retarded in it, because it certainly was.
I'm not the one changing my mind about the CMA. The CMA changed their own minds.
I said they were wrong, then then came out and agreed with me that they were wrong.


Your second reply, it was a bit of a laugh at Jim Ryan's expense. Don't be so precious.
I don't hate Jim Ryan and Sony. I just think they have been hugely hypocritical with their submission and as such I think it's quite funny that it backfired on then.

What's amazing is that you never participated in this thread the entire time, but you come into it with a retard level victory dance. Stick to twittard.