Microsoft / Activision Deal Approval Watch |OT| (MS/ABK close)
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True but there are two situations where its not totally accurate. It is their right unless they are contractually obligated. Or if it will lose their shareholders tons of money. COD surely would fall into that category.
Ass of Can Whooping
Member
Lol no
PaintTinJr
Member
I'm just going by where I think we're at in the UK with the fcuk type money companies doing as they please. and the Cloud SLC the CMA identified - which was probably there regardless of this acquisition, and clearly isn't improving with a $70B acquisition being tabled.
My theory is that all regulators have worries and might prefer to block the deal just in the short term for Microsoft to have it overturned in each court. Resisting buys more time and the legal costs are peanuts compared to impact of a worst case SLC being rapidly a reality. Drawing out the process lessens the impact of the deal on competitors/market, and buys more time for scrutiny and gives Microsoft a big question if it is worth continuing? It also gives the FTC a strengthened hand. The CMA and the EC even if eventually told to approve by the courts can still provide valuable assistance to the FTC case, and it would be a scenario that only one regulator needs to permanently win for all regulators to win,
Yoboman
Member
They have got as much of a track record as MS do (one game)
adamsapple
Or is it just one of Phil's balls in my throat?
How close are we on the doomsday clock ?
Yoboman
Member
Can somebody remind me what the mistake was when they updated their provisional findings? Microsoft provided them updated data and they followed it so what was the error?
Yoboman
Member
Not accounting for Microsoft making more money per user as the publisher of the biggest release every year seems like a big oversight
The CMA, when they realize they may have made calculation mistakes once again and might have to redo the Addendum again:
Yoboman
Member
It is an essential input, that never changed? What changed was CMA using Microsoft's new data decided that Microsoft would never foreclose because they don't want to take a loss
FoxMcChief
Gold Member
Surely it's not that simple?
HeisenbergFX4
Member
Its that simple and with good internet quite fast getting into a game
Yoboman
Member
Do you think Sony would care if they didnt think it would do major damage to them? Maybe they are just spending millions on anti trust lawyers for fun
Mr Reasonable
Completely Unreasonable
the microsoft thing was an actual mistake. sonys saying our model is better than yours. 2 different things. and apparently the CMA doesnt care just like they dismissed sonys bunk data about the number of users switching.
its over
Activision/Microsoft expect remedy working paper from UK agency next week -report
Activision/Microsoft expect remedy working paper from UK agency next week - report
Microsoft (MSFT) and Activision (ATVI) expect the UK's antitrust regulator will issue its remedy working paper as part of its review of the $69 billion transaction next week. The...seekingalpha.com
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Don't be silly. These aren't fanboys on a forum. There's billions of dollars at play here. They aren't gonna just throw it away. They will do what makes the most money. And there's literally zero argument that makes sense, saying that gimping the most popular game in the world on the world's leading gaming service, would make more money. It's complete nonsense. COD just prints money, that's why they want it.
Ass of Can Whooping
Member
Are you aware of how shareholders lose or make money?
Not at all a few bucks from the smallest store xbox and mtx from pc-xbox store is not off setting 2 billion a year to gain 2-3 million users over a generation. You also run the risk of being displaced as the top shooter by a game on all platforms. Then you wasted 70 billion on a second tier gaas.
feynoob
Banned
People think its fun to waste couple billions of dollars like its nothing.
Yoboman
Member
The question is are those ~10 million annual buyers on PlayStation going to stop playing if it's not on PlayStation? A portion will and portion will switch.
What the CMA have concluded is a certain portion of users will switch based on survey results. You then need to calculate the spending pattern of those users into the increase in LTV for Xbox and does it offset the revenue loss from PlayStation
We are poking in the dark without numbers but Sony's methodology shows it does, MS's methodology
Sony want them to include increased spending patterns of switchers with higher than average LTV on PlayStation, and also include Microsoft's incremental gains as a first party (making 100% on sales through Xbox). The flaw is probably Sony finding a way to overstate COD user LTVs
Xbox has their LTV extrapolated over 5 years based on the first two years of Series X and S. Which to me sounds ridiculous without seeing the numbers as this is when Xbox has had a software drought, console hardware has been supply limited and they've been running $1 Gamepass promos (which have ended)
Both seem a bit biased and CMA seems like it has no idea what it's doing right now. It should have its own externally validated methodology for calculating the LTV.
Yoboman
Member
Xbox has been running losses for many years. They won't even be running a loss by pulling CoD out of PlayStation, they will just have lower expected revenue in a worse case scenario. CoD will still be extremely profitable. Its a bit like saying Activision had been wasting billions by not having COD on Switch
feynoob
Banned
I am sorry, but these two dont mesh together. Xbox cant make losses, if they are able to make profit from COD. Which is why it makes no sense to say that Xbox is on loss lead, while expecting them to make profits from COD.
Aguero9320
Member
No, which is why I was surprised. I thought their market success was based on their own exclusives and long developed brand loyalty, not a temporary third party marketing deal. Clearly they think this is potentially a big problem for them or they wouldn't be taking such a position.
ulantan
Member
Their exclusives will take a hit when they lose cod that's a lot of money
POKEYCLYDE
Member
My understanding is in the CMA's view, CoD is such a unique beast, that they can't look at something like Starfield and say they'll do the same thing with CoD. Likewise they can't look at Minecraft and say they'll do that with CoD. It's such a juggernaut and holds such a unique position as a franchise in the games industry that they can't look at past behavior and say CoD fits a similar mold to what they did with this or that game.
They're arguing certain things could cripple their business, that I'm sure they themselves would like to do with future acquisitions. Maybe that strictens future acquisition remedies for Sony, but I don't know. Really everything Sony argues would hurt them immeasurably has already happened to a degree without foreclosing them.
Many 3rd party PS3 games were abysmal compared to 360's. Yet, Playstation is still around. Which really only goes to show how weak Sony's arguments against this acquisition are.
Without the actual numbers behind it, it's hard to see where the differences in the CMA's revised findings and Sony's model are.
The CMA, when they realize they may have made calculation mistakes once again and might have to redo the Addendum again:
I believe the CMA did use a higher LTV than the average customer using the justification that "switchers" are more hardcore and spend more.
Now, maybe Sony's numbers are right, but would they make a material difference in the CMA's findings? I'm not sure. Currently the CMA's findings conclude that Microsoft would lose billions if they made CoD exclusive.
Really depending on the percentage of "switchers" is what determines the profitability of such a decision. If 33% of CoD players on Playstation switched over to Xbox and ALL of those players paid 3x more in the Xbox ecosystem than they spent on CoD in Playstation, then Xbox breaks even from making CoD exclusive.
Any % of switchers lower than that and Microsoft would be losing money by making CoD exclusive. There is probably a margin of loss that the CMA would deem immaterial for Microsoft. But when you get to the actual percentage of users switching (probably closer to %15, but even at Sony's proposed 24%), Microsoft is still losing multiple hundreds of millions from a CoD exclusive strategy.
I'm not sure if the CMA used Sony's "3x the average" if it would even make a difference in their findings. But if they did use Sony's numbers, and it did change the CMA's findings, I'm sure Microsoft would argue against it.
Eotheod
Member
Does it account for 100% development costs? Maybe that's why the decision was reversed, because CMA hadn't accounted for (however stupid that is) development costs being 100% under Microsoft if they were to gain Activision-Blizzard. So if they foreclose, they lose 70% of the market and still have 100% of the development costs, meaning far less gain.
In the situation Sony is assuming, the foreclosure would somehow push more profit through to Microsoft by supposedly upsetting the balance and causing Sony to bleed console owners. I'm not sure how exactly that would work, as that's ignoring literally everything else Sony makes for the sake of giving CoD this gravitas of power.
Yoboman
Member
Their concern is the entire game which sells 10 million every year on PS is pulled. That the exiting of a substantial part of their yearly revenue and userbase will have flow effects that can't be calculated eg how many leave PS to follow their friends to Xbox.
You chip away enough at Sony's third party support and you expect it not to have an impact?
Doesn't matter, if the overall revenue for Xbox/MS increases as a result of foreclosure to the point it offsets revenue lost from PlayStation, which is what they are trying to figure out with customer LTV values.
Development profitability doesn't matter because the scope of this is looking beyond what an individual COD makes per year, and besides an overall revenue increase for Xbox while reducing number of platforms to develop for is more profitable
Xbox profits and COD profits aren't the same thing.
1) Xbox losing money for so long shows they are willing to take on massive losses, 2) That is far more substantial than being slightly less profitable on the game they bought
3) if you are assessing the likelihood of foreclosure IMO than Xbox being willing to take on losses year after year shows that point 2 is irrelevent
Yoboman
Member
I mean if we want to use that as a benchmark, PlayStation lost 75 million users generation to generation and went from 85% market share with Xbox + PS to 50/50 with Xbox
Xbox One lost massive market share coming out of the gate with worse performance
Obviously other factors contributed but to hand waive performance is a bit silly
feynoob
Banned
Xbox has to make profits for COD to be exclusive in the first place.
If the division is at loss lead, it wont generate enough money to make profit from COD. It will be impossible to cover PS loss with Xbox sales. Even if those users switched to xbox.
Yoboman
Member
According to who? Nobody is stopping Xbox running a loss leader strategy with COD. And it still won't be a loss leader, it will just be lower ROI. Activision makes over 5 - 7 billion in profits a year, cut that in half without PS and its still a healthy profit margin for the Activision division with Xbox and PC. And that's not counting the financial benefits to their wider ecosystem.
You think Xbox isn't already hoping Gamepass will be more than enough to encourage switchers? Surely they must see the benefit in Gamepass growth over PS revenue if they are forging ahead with that plan.
None of that is the point though. The point is Xbox has historically shown they are willing to take a loss so I don't see how their new subsidiary dropping in profit from 5 billion to 2.5 billion is going to worry them when they are still in the green
feynoob
Banned
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adamsapple
Or is it just one of Phil's balls in my throat?
Activision/Microsoft expect remedy working paper from UK agency next week - report
Microsoft (MSFT) and Activision (ATVI) expect the UK's antitrust regulator will issue its remedy working paper as part of its review of the $69 billion transaction next week. The...
seekingalpha.com
ChorizoPicozo
Member
that would be Jim Ryan expecting a miracle to happen.Activision/Microsoft expect remedy working paper from UK agency next week - report
Microsoft (MSFT) and Activision (ATVI) expect the UK's antitrust regulator will issue its remedy working paper as part of its review of the $69 billion transaction next week. The...
Were they really Sony's gamers to begin with if they will all swap platforms to follow COD?
Henry Panic
Banned
Call of Duty used to be called casual trash that couldn't hold up to Halo 3 and Army of Two.
Now it's the most important game in the industry.
It's come a long way.
Now it's the most important game in the industry.
It's come a long way.
feynoob
Banned
Barakov
Member
feynoob
Banned
That is a great loop.
Xbox Series S COD bundle: console, headset, 1 year of GPU, base battlepass or XXXX codbux as a GPU benefits for 300-400 would diminish that barrier. Microsoft has a lot of levers at its disposal to add value without cost.
Torrent of Pork
Banned
I don't blame Jimbo for doing his job in doing anything he can to block the ABK deal. But he's straight-up calling his own first party studios too incompetent to make a valid competitor to CoD.
I loved Sony back during the PS2 and 3 when they had the balls to take a risk on something that might not work out.
I loved Sony back during the PS2 and 3 when they had the balls to take a risk on something that might not work out.
ChorizoPicozo
Member
like Death Stranding, VR or Dreams?
Heisenberg007
Gold Journalism
Yeah that's one of the differences in the arguments b/w Sony and CMA now.My understanding is in the CMA's view, CoD is such a unique beast, that they can't look at something like Starfield and say they'll do the same thing with CoD. Likewise they can't look at Minecraft and say they'll do that with CoD. It's such a juggernaut and holds such a unique position as a franchise in the games industry that they can't look at past behavior and say CoD fits a similar mold to what they did with this or that game.
They're arguing certain things could cripple their business, that I'm sure they themselves would like to do with future acquisitions. Maybe that strictens future acquisition remedies for Sony, but I don't know. Really everything Sony argues would hurt them immeasurably has already happened to a degree without foreclosing them.
Many 3rd party PS3 games were abysmal compared to 360's. Yet, Playstation is still around. Which really only goes to show how weak Sony's arguments against this acquisition are.
Without the actual numbers behind it, it's hard to see where the differences in the CMA's revised findings and Sony's model are.
I believe the CMA did use a higher LTV than the average customer using the justification that "switchers" are more hardcore and spend more.
Now, maybe Sony's numbers are right, but would they make a material difference in the CMA's findings? I'm not sure. Currently the CMA's findings conclude that Microsoft would lose billions if they made CoD exclusive.
Really depending on the percentage of "switchers" is what determines the profitability of such a decision. If 33% of CoD players on Playstation switched over to Xbox and ALL of those players paid 3x more in the Xbox ecosystem than they spent on CoD in Playstation, then Xbox breaks even from making CoD exclusive.
Any % of switchers lower than that and Microsoft would be losing money by making CoD exclusive. There is probably a margin of loss that the CMA would deem immaterial for Microsoft. But when you get to the actual percentage of users switching (probably closer to %15, but even at Sony's proposed 24%), Microsoft is still losing multiple hundreds of millions from a CoD exclusive strategy.
I'm not sure if the CMA used Sony's "3x the average" if it would even make a difference in their findings. But if they did use Sony's numbers, and it did change the CMA's findings, I'm sure Microsoft would argue against it.
Sony says that it will make a big difference and gave a number (assuming all 3 of their objections are honored).
ZehDon
Member
It's hard not to feel sorry for PlayStation's first parties when Ryan's out here making comments like these. When PS3 was languishing against the Xbox 360 in beast mode, it was Sony's first parties who stepped up and did the impossible: they delivered the games that were as good as PlayStation needed them to be. Now, Ryan's out here saying none of them matter. Insomniac, SSM, Polyphony Digital, Bend, Guerrilla Games; not a single one of them actually matters. Sony's biggest first party titles - God of War, Gran Turismo, Ratchet and Clank, Horizon, Spider-man, Ghost of Tsushima - are worthless, because all that matters is Call of Duty. Without that one game, PlayStation is kaput. Sure must feel great going to work everyday, knowing the man in charge thinks so highly of the work you do.
DarkBatman
SBI’s Employee of the Year
This is such a narrow and false statement that just aims to paint Jim Ryan in the wrong light. With his actions he not only wants to defend Playstation itself, but also the first party studios and help them that their work will continue to be appreciated in the future.
Just look at the sales figures for the last few years. Sony's first party studios deliver fantastic video games with outstanding ratings. But who is always at the top? Call of Duty. Accordingly, it is pretty easy to predict what would happen if Call of Duty were no longer available for the Playstation or if it was only released in an inferior version (whether in terms of quality or content). Of course he exaggerates with his statements and overdramatizes the whole thing. In essence, however, he is right: the blind "I just want to play COD and shoot everything away" crowd would leave the Playstation behind and thus also weaken the general user base for first party games. Would it now take on proportions that it collapses so hard? That's difficult to say. But a risk that he logically does not want to take.
Will that really happen? Would MS really commission a worse version or completely remove COD from PS? Hard to say as well.
But to say "The poor first party studios whose performance is completely underplayed" is just ridiculous.
ChorizoPicozo
Member
who knows what is really happening inside those meetings (Jim and the lawyers).
i mean...sony HAS to kown how hard is to make games with good performance. the recent fiasco of TLoU PC port is just an example that no one is exempt.
i think sony is really pushing for some contractual performance requirements for COD on PS. As you said, Jim is kind of right but I think there is some kind of:
"if you want to own CoD, we will make it harder for you to manage it"
CMA would have gotten those responses a week ago so I may have felt if they were took that onboard, we may have already seen some movement. I feel like we are getting to the stage where the CMA PF's are getting pretty fixed.
- Microsoft getting the working remedy paper next week according to DealReporter. There isn't alot of time so wonder how much negotiation they would want to do now, they would have already done alot already.
- 12th is the deadline for any relevant parties to respond.
- 26th is the final deadline for the CMA.
Obviously this may change again and doesn't account for a CAT appeal.
- Microsoft getting the working remedy paper next week according to DealReporter. There isn't alot of time so wonder how much negotiation they would want to do now, they would have already done alot already.
- 12th is the deadline for any relevant parties to respond.
- 26th is the final deadline for the CMA.
Obviously this may change again and doesn't account for a CAT appeal.
Its not that complicated, he is just lying to protect profit margins and shareholders.
Sony have been fighting dirty for decades, this is just more of the same.
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Sleepwalker
Member
That bundle sounds like packaged cancer, my god.
Anyway, since this is gonna pass soon, how do we get phil to sanction a new guitar hero game?
FoxMcChief
Gold Member
In Jimbo's eyes, is Sony PlayStation only successful because of the knowledgeable CoD gamers?
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