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[ChorizoPicozo]

really interesting to see how sony deal with this acquisition.

have you missed all the acquisitions they have been doing?

they didnt really respond to bethesda but this one is next level. getting activision is a megaton! sony may be on top right now but they must be seriously worried about this.

no. per Jim Ryan's e-mail.

whats to stop microsoft buying more big publishers and studios? sony can do fuck all about it and the regulators clearly wont get in microsofts way either.

did MS just walk in tonthe stored and bought KING and the other two? they had to bend over backwards to do so.

it other words sony are fucked here.

no

if its all about money, how can they possibly compete with microsoft in that aspect?

because is not.

microsoft basically hold all the cards now and can own any ip they want. remove them off playstation and starve the brand of 3rd party games. crazy stuff.

no.

 

[C2brixx]

Why is that not reasonable unless Microsoft intends to foreclose?

It's not exactly a hard ask

The entitlement is mind boggling. You do realize what the status quo is? Activison or any other 3rd party publishers aren't obligated to make games for a Playstation or any other platform if they don't want to. Once the CoD marketing deal with Sony ends in 2025 Activision could do what Square Enix has done with FFXVI and no regulator could stop them.
Microsoft is going to keep CoD on Playstaion for the same reason a independent 3rd party Activision would, money.

 

[Ozzy Onya A2Z]

really interesting to see how sony deal with this acquisition. they didnt really respond to bethesda but this one is next level. getting activision is a megaton! sony may be on top right now but they must be seriously worried about this. whats to stop microsoft buying more big publishers and studios? sony can do fuck all about it and the regulators clearly wont get in microsofts way either. it other words sony are fucked here. if its all about money, how can they possibly compete with microsoft in that aspect? microsoft basically hold all the cards now and can own any ip they want. remove them off playstation and starve the brand of 3rd party games. crazy stuff. the next 5-10 years will be very interesting.

This is just hyperbole and incorrect. No MS cannot just go buy the whole industry. The scrutiny and blocks will increase with each aquisition. As any market matures leaders vie for position and a few dominant players gobble up the rest of the market. Pretty standard business 101. We're going to see a battle ground in the next few years. Personally given the walled garden and inevitable power increases of smartphones I'm glad we're going to see MS in full swing against Apple. It's might just be more of a showdown than MS v Sony over the next 10+ years.

One can imagine a platform agnostic approach to gaming e.g. no console required as the cloud or smartphone can compute what you want from games on your screen.

 

[James Sawyer Ford]

I find it interesting you pose it that way. So you see a fundamental difference between a Bungie game and say COD, you require one locked down and the other at face value? It comes across as double standards, irrespective of who or how large of a company owns what.

Also your 4% statement doesn't hold water. By that rationale you'd have ActiBliz at what 5% of MS? Same same.

Your number equivalency had me chuckle.

Bungie is a small player in the market. 4% of the market cap of Activision, which has a higher market cap than Nintendo and almost as large as the entirety of Sony. It's understandable why the largest tech acquisition in history that's buying out the largest IP and revenue base in gaming, would be a much bigger deal and worthy of at a bare minimum contractual stipulations to guarantee free market activity that doesn't cause long term harm to the competitiveness of the industry

This has nothing to do with how big Activision, a gaming company, is in relation to Microsoft as a whole, a nearly $3T windows, office, and cloud supplier. We are discussing two very different markets

So yes. The scale of the purchase matters. Bethesda, despite being a large acquisition (largest in gaming history at the time), was not under regulatory scrutiny; it wasn't big enough to be anticompetitive - no deals were necessary to ensure competitive markets in that case.

And yet, Activision is 10x the size of the previously largest acquisition in gaming history. Of course the situation is different and warrants active regulatory intervention.

 

[Lasha]

Your number equivalency had me chuckle.

Bungie is a small player in the market. 4% of the market cap of Activision, which has a higher market cap than Nintendo and almost as large as the entirety of Sony. It's understandable why the largest tech acquisition in history that's buying out the largest IP and revenue base in gaming, would be a much bigger deal and worthy of at a bare minimum contractual stipulations to guarantee free market activity that doesn't cause long term harm to the competitiveness of the industry

This has nothing to do with how big Activision, a gaming company, is in relation to Microsoft as a whole, a nearly $3T windows, office, and cloud supplier. We are discussing two very different markets

So yes. The scale of the purchase matters. Bethesda, despite being a large acquisition (largest in gaming history at the time), was not under regulatory scrutiny; it wasn't big enough to be anticompetitive - no deals were necessary to ensure competitive markets in that case.

And yet, Activision is 10x the size of the previously largest acquisition in gaming history. Of course the situation is different and warrants active regulatory intervention.

Why aren't Microsoft customers entitled to perpetual, competitive, and fair access to Bungie games?

 

[James Sawyer Ford]

Why aren't Microsoft customers entitled to perpetual, competitive, and fair access to Bungie games?

Because it's not an antitrust purchase

Same reason why Zenimax wasn't.

Neither of them is large enough to cause a seismic shift in the industry alone. Activision is.

The regulators didn't bat an eye at either one for being antitrust

 

[adamsapple]

Because it's not an anticompetitive purchase

Same reason why Zenimax wasn't.

The regulators didn't bat an eye at either one for being antitrust

But multiple regulators have approved the ACTV deal, hell EU called it Pro-competitive.

 

[StreetsofBeige]

Because it's not an antitrust purchase

Same reason why Zenimax wasn't.

Neither of them is large enough to cause a seismic shift in the industry alone. Activision is.

The regulators didn't bat an eye at either one for being antitrust

So what are you complaining about?

The MS/activision deal isn't anti competitive either. FTC bailed, CMA folded right after FTC did, and I think every other regional governing body a-ok it.

 

[Lasha]

Because it's not an anticompetitive purchase

Same reason why Zenimax wasn't.

Neither of them is large enough to cause a seismic shift in the industry alone. Activision is.

The regulators didn't bat an eye at either one for being antitrust

Irrelevant. Your point is that Sony is entitled to permanent access of a popular third party title that was acquired for unclear reasons. Yet Microsoft is not entitled to the same guarantee even though the acquirer is a direct competitor with a much larger market share. A competitor which has regularly leveraged it's position to take content away from Microsoft. Your logic is inconsistent.

You also never got around to explaining why any company should be forced to prop up Sony's business model of acting as a gatekeeper to customers. I'm trying to give you the benefit of the doubt but it's getting difficult.

 

[James Sawyer Ford]

But multiple regulators have approved the ACTV deal, hell EU called it Pro-competitive.

ALL of the major regulatory bodies voiced concerns in their summary findings, yet allowed it on the basis that they believe Microsoft has no intention of foreclosing CoD. That's the central issue being discussed. It's a bad assumption given the financial capabilities of Microsoft and their history of foreclosure.

 

[StreetsofBeige]

But multiple regulators have approved the ACTV deal, hell EU called it Pro-competitive.

They did? Wow. Talk about a very pro-competitive deal then. If there's one governing body that will really reel in corporations doing dumb shit it's the EU. If they passed it, it's definitely a non-issue.

Hell, EU will even clamp down on Apple cords.

 

[James Sawyer Ford]

Irrelevant.

No. Market cap size is not irrelevant in an antitrust case.

 

[StreetsofBeige]

ALL of the major regulatory bodies voiced concerns in their summary findings, yet allowed it on the basis that they believe Microsoft has no intention of foreclosing CoD. That's the central issue being discussed. It's a bad assumption given the financial capabilities of Microsoft and their history of foreclosure.

Well if they aren't concerned why are you?

Pretty sure they know more about business deals than you.

 

[Lasha]

No. Market cap size is not irrelevant in an antitrust case.

You're correct. Market cap is irrelevant to your claim that one company is entitled to perpetually make a revenue stream for another. I already agreed that ten years is sufficient to insulate Sony. Regulators appear to have too. So why do you think a perpetual agreement is required when Sony doesn't extend the same courtesy to Microsoft?

 

[adamsapple]

ALL of the major regulatory bodies voiced concerns in their summary findings, yet allowed it on the basis that they believe Microsoft has no intention of foreclosing CoD. That's the central issue being discussed. It's a bad assumption given the financial capabilities of Microsoft and their history of foreclosure.

The history of foreclosure does not involve making specific commitments to any regulators for the acquisition to get approved.

It's not an accurate equivalency.

Besides, said regulators did approve it, thus deeming it not anti competitive, and those that haven't, are on track to now at least.

They did? Wow. Talk about a very pro-competitive deal then. If there's one governing body that will really reel in corporations doing dumb shit it's the EU. If they passed it, it's definitely a non-issue.

Hell, EU will even clamp down on Apple cords.

Yep

European Union antitrust chief Margrethe Vestager told reporters.

"Actually they significantly improve the condition for cloud game streaming compared to the present situation, which is why we actually consider them pro-competitive," she added, contrasting with the UK position that the deal would hit competition in that part of the market.

Microsoft wins EU antitrust approval for Activision deal vetoed by UK

Microsoft Corp won EU antitrust approval for its $69 billion acquisition of Activision on Monday, in a significant boost that could prompt Chinese and South Korean regulators to follow suit despite a British veto of the deal.

www.reuters.com

 

[James Sawyer Ford]

You're correct. Market cap is irrelevant to your claim that one company is entitled to perpetually make a revenue stream for another.

The only "entitled" contract is one required by regulatory bodies.

In this case, they haven't required one because they believe, naively, that Microsoft won't foreclose on CoD. However, if they concluded that Microsoft would foreclose, regulators would take issue with it - that's what the CMA, EU, and the judge ruling over the FTC case have said.

Zenimax or Bungie never had any of the regulators scrutinize the ability of their acquirer to foreclose on either property - it was well within their right without any commentary dismissive of their ability to do so and maintain a competitive marketplace

 

[Lasha]

The only "entitled" contract is one required by regulatory bodies.

In this case, they haven't required one because they believe, naively, that Microsoft won't foreclose on CoD. However, if they concluded that Microsoft would foreclose, regulators would take issue with it - that's what the CMA, EU, and the judge ruling over the FTC case have said.

Zenimax or Bungie never had any of the regulators scrutinize the ability of their acquirer to foreclose on either property - it was well within their right without any commentary dismissive of their ability to do so and maintain a competitive marketplace

I'm asking you why you think a perpetual agreement is required. My understanding is that you think Sony should have permanent access to 30% of games it doesn't make. You seem to understand the absurdity of the idea because you don't think Sony should sign a perpetual guarantee that Bungie games release on Xbox. Why is Sony entitled to money from games it doesn't make but Microsoft isn't entitled to money from games it doesn't make? Why is a ten year deal insufficient?

 

[C2brixx]

The regulators didn't bat an eye at either one for being antitrust

The main reason some regulators have been up in arms about the deal is because of the $70B purchase price. Bungie and Zenimax weren't publicly traded.

No. Market cap size is not irrelevant in an antitrust case.

Market cap is just paper value and shareholder exuberance. Like Tesla being more valuable than all the rest of the auto industry combined.
Activison has around $12B in cash on hand and makes around $2B in profit each year. The real value would be much less had Activison been a private like Bungie/Zenimax.

 

[James Sawyer Ford]

I'm asking you why you think a perpetual agreement is required.

Because I agree with the collective regulator's assessment that foreclosing CoD is anticompetitive, but I disagree with their conclusion that Microsoft has no practical ability or incentive to do so

 

[StreetsofBeige]

The only "entitled" contract is one required by regulatory bodies.

In this case, they haven't required one because they believe, naively, that Microsoft won't foreclose on CoD. However, if they concluded that Microsoft would foreclose, regulators would take issue with it - that's what the CMA, EU, and the judge ruling over the FTC case have said.

Zenimax or Bungie never had any of the regulators scrutinize the ability of their acquirer to foreclose on either property - it was well within their right without any commentary dismissive of their ability to do so and maintain a competitive marketplace

What proof does anyone have MS will cut the COD cord? When?

If it's such a big deal, the gov will get involved later and break them. Or the EU will go ape shit like did in Apple all over $20 charging cords.

But at this point of time it's status quo. And Sony has another 2 years of their usual marketing deals with COD already existing. So don't worry. COD isn't disappearing.

You're puttting a lot of energy into an acquisition where nothing will change anytime soon (if ever).

MS bought out Bethesda years ago and they still are putting games in PS sub plans this year.

 

[James Sawyer Ford]

Market cap is just paper value and shareholder exuberance.

It's a reflection of market weight and impact, and by proxy revenues generated in said industry. You can use any other metric related to size and it all leads to the same conclusion - Activision is massive, and the case is highly scrutinized by regulators and rightfully so

 

[Lasha]

Because I agree with the collective regulator's assessment that foreclosing CoD is anticompetitive, but I disagree with their conclusion that Microsoft has no practical ability or incentive to do so

Should Sony be required to sign a perpetual agreement with Microsoft if buys square, EA, Take2, or Sega?

 

[StreetsofBeige]

It's a reflection of market weight and impact, and by proxy revenues generated in said industry. You can use any other metric related to size and it all leads to the same conclusion - Activision is massive, and the case is highly scrutinized by regulators and rightfully so

And governing bodies are letting it through. So it's a non issue.

Market cap means nothing in acquisitions. If they did you wouldn't get telecom companies or huge pharma combining. And those industries carve up territories into regions. And even those go through. So it's not surprising that a video game deal will too.

 

[bitbydeath]

Can't keep up with this thread but this was likely expected.

FTC Leaning Toward Appealing Microsoft-Activision Loss

• Agency could file appeal of court loss as soon as Wednesday
• Judge Corley's order pausing deal expires at midnight Friday

FTC Leaning Toward Appealing Microsoft-Activision Loss

The US Federal Trade Commission is leaning toward appealing a federal judge’s ruling against the agency’s bid to block Microsoft Corp.’s $69 billion acquisition of Activision Blizzard Inc., according to a person familiar with the case.

www.bloomberg.com

 

[ChiefDada]

FTC should know better.

From the judgement:

""Because § 7 of the Clayton Act bars mergers whose effect 'may be substantially to lessen competition, or to tend to create a monopoly,' 15 U.S.C. § 18, judicial analysis necessarily focuses on 'probabilities, not certainties.

"Thus, "t is well established that a section 7 violation is proven upon a showing of reasonable probability of anticompetitive effect." Warner, 742 F.2d at 1160."

Judge Cordley use of "probably" throughout the ruling is consistent with the above.

"Thus, to establish a likelihood of success on its ability and incentive foreclosure theory, the FTC must show the combined firm (1) has the ability to withhold Call of Duty, (2) has the incentive to withhold Call of Duty from its rivals, and (3) competition would probably be substantially lessened as a result of the withholding.

No appeal on those grounds.

Actually, her ruling is riddled with contradictions and conflation. That is why I was specifically perplexed by the reasoning and not so much her decision right after release. As an example, see the last conclusory sentences of her decision:

For the reasons explained, the Court finds the FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition. To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content. The motion for a preliminary injunction is therefore DENIED.

The first sentence deals with the FTC's invocation of Sec. 7 ; "lessen competition". Her second statement which was intended to serve as an evidentiary-based rebuttal, makes no mention of more robust competition or the like as a result of the deal (the proper contradiction), but rather points out how CoD will be available to more consumers. This is nice if this were to happen, but is inconsequential for a case focused on Section 7. The problem is she denied the motion on THIS basis("...therefore denied"). That is why an appeal at the very least is conceptually reasonable and has a chance of success.

Also, separate from above, Judge was not impressed with Professor Lee's testimony at all!

Neither was I.

 

[Jerm411]

Gotdamn the CMA bent the knee with the quickness…..

 

[C2brixx]

Actually, her ruling is riddled with contradictions and conflation. That is why I was specifically perplexed by the reasoning and not so much her decision right after release. As an example, see the last conclusory sentences of her decision:



The first sentence deals with the FTC's invocation of Sec. 7 ; "lessen competition". Her second statement which was intended to serve as an evidentiary-based rebuttal, makes no mention of more robust competition or the like as a result of the deal (the proper contradiction), but rather points out how CoD will be available to more consumers. This is nice if this were to happen, but is inconsequential for a case focused on Section 7. The problem is she denied the motion on THIS basis("...therefore denied"). That is why an appeal at the very least is conceptually reasonable and has a chance of success.



Neither was I.

Substantially lessen competition. That substantially part is important because every merger lessens competition.

 

[Tomeru]

Finally. Can we go to war now please?

 

[Corndog]

They didn't need to

1. It wasn't an anti trust case

2. Bungie made Sony give them full control in their contract otherwise they weren't going to sell

Why does it matter that it's an antitrust case? Did the judge require them to? Nope.

And again, bungie signed no agreement with Microsoft.

 

[Varteras]

Substantially lessen competition. That substantially part is important because every merger lessens competition.

Wasn't it supposed to improve competition? I'm confused now.

 

[StreetsofBeige]

Gotdamn the CMA bent the knee with the quickness…..

They had nothing but put up an image of taking no prisoners, when in reality they were waiting to see what the US decision was the whole time.

 

[James Sawyer Ford]

Should Sony be required to sign a perpetual agreement with Microsoft if buys square, EA, Take2, or Sega?

No, they should be outright blocked for antitrust after already acquiring Activision/Zenimax

 

[James Sawyer Ford]

Why does it matter that it's an antitrust case? Did the judge require them to? Nope.

And again, bungie signed no agreement with Microsoft.

It matters because that's the whole point of requiring a binding agreement if the deal is deemed large enough to present antitrust issues

Bungie doesn't. Zenimax doesn't.

 

[Lasha]

No, they should be outright blocked for antitrust after already acquiring Activision/Zenimax

I apologize for the typo. I am asking if you think that SONY should be forced to extend a perpetual guarantee to MICROSOFT in the event it purchases a publisher like Square, Sega, EA, or hell even Activision.

 

[James Sawyer Ford]

And governing bodies are letting it through. So it's a non issue.

Which we are debating in this thread, they are letting it through due to naivety vis-a-vis their argument that Microsoft lacks intent it capability to foreclose

 

[James Sawyer Ford]

I apologize for the typo. I am asking if you think that SONY should be forced to extend a perpetual guarantee to MICROSOFT in the event it purchases a publisher like Square, Sega, EA, or hell even Activision.

Sega, no

Square, no

Activision? Hell yes

EA? Likely

Take2? Maybe

But if the regulators approve MS and Activision then the precedent is set and all of those would be fair game under similar logic that they allowed MS to acquire Activision

 

[intheinbetween]

MS will do their best to commit to the 10 year agreement, however this could be seen as a double edged sword, since if the deal goes through the split of profits would turn the tides, meaning, profits/revebue from selling CoD and all its content on PS platforms could be used by MS to get exclusive agreements with other publishers, and I can't see Sony being ok with that, so lets wait and see if Sony want CoD or any big ABK ip released on their platforms

 

[Corndog]

It matters because that's the whole point of requiring a binding agreement if the deal is deemed large enough to present antitrust issues

Bungie doesn't. Zenimax doesn't.

But the judge didn't.

 

[James Sawyer Ford]

But the judge didn't.

I'm not arguing whether they are requiring it today. Clearly they aren't. I'm arguing their logic for believing that foreclosure on CoD is an antitrust issue yet hand waiving it away

 

[C2brixx]

Wasn't it supposed to improve competition? I'm confused now.

Well its kind of a judgement call. Probably why a Judge is needed to decide. Nothing is going to substantially change for a least 10 years anyway. From the Judges perspective MS plans to put CoD and other Activision games on more platforms is more pro consumer than status quo Activision.

 

[Fabieter]

When a Biden appointed, life long Democrat judge rules against Bidens FTC, you know they really shouldn't have tried to block the merger.
I hope MS gets awarded all of their costs against the FTC. Not only should they lose, but they should pay a price as well.

So you want more tax money go to your favourite multi trillion dollar company? Why?

 

[StreetsofBeige]

Sega, no

Square, no

Activision? Hell yes

EA? Likely

Take2? Maybe

But if the regulators approve MS and Activision then the precedent is set and all of those would be fair game under similar logic that they allowed MS to acquire Activision

Not necessarily. The key difference is Activision is the biggest third party company and MS position in gaming is a fraction of Sony and Nintendo. Aren't there articles where people brag Sony outsells Xbox like 9:1 in some countries? In Japan it's probably 100:1 or 1000:1 now.

Sony is already leagues ahead of MS and already have tons of marketing deals in place. So if they went after EA or T2 that would probably get scrutiny too. And unlike MS, once Sony buys a studio they basically go 100% PS.

 

[havoc00]

Sega, no

Square, no

Activision? Hell yes

EA? Likely

Take2? Maybe

But if the regulators approve MS and Activision then the precedent is set and all of those would be fair game under similar logic that they allowed MS to acquire Activision

Cant wait for MS to clean up Activision first and then EA

 

[James Sawyer Ford]

The key difference is Activision is the biggest third party company and MS position in gaming is a fraction of Sony and Nintendo

Microsoft has an enormous lead on Cloud which is the long term future of gaming which is why MS can be a small player in console yet represent a huge monopoly in the future when console is replaced by Cloud

 

[StreetsofBeige]

Microsoft has an enormous lead on Cloud which is the long term future of gaming which is why MS can be a small player in console yet represent a huge monopoly in the future when console is replaced by Cloud

And that's all guesswork. Nobody knows how good cloud gaming will be. Blocking MS in theoretical cloud gaming dominance makes zero sense.

 

[Lasha]

Sega, no

Square, no

Activision? Hell yes

EA? Likely

Take2? Maybe

But if the regulators approve MS and Activision then the precedent is set and all of those would be fair game under similar logic that they allowed MS to acquire Activision

Your constant attempts at appealing to the authority of regulators is getting old. I'm trying to suss out YOUR metric for determining when one company should be forced to provide risk free revenue to another in perpetuity. I don't think a perpetual agreement to stock a particular retailer's shelves ever makes sense; the idea is counter to a free market. I think a ten year deal is fair since it gives all parties involved sufficient time to adjust their business models and find new avenues to compete.

Imagine that Microsoft gives a perpetual deal then Sony decides to block all Activision games from its platform as soon as COD revenue has been replaced. Do you think regulators should be able to force Sony to allow Microsoft to sell games on PlayStation?

 

[James Sawyer Ford]

Your constant attempts at appealing to the authority of regulators is getting old

I told you my thoughts with the answers I gave.

You don't have to suss out anything, but you can spare me the snark.

 

[intheinbetween]

Cant wait for MS to clean up Activision first and then EA

I have the feeling EA will die on their own, I can't see MS or Sony interested in them, lets see their financials after losing the FIFA license

 

[Ozzy Onya A2Z]

Your number equivalency had me chuckle.

Bungie is a small player in the market. 4% of the market cap of Activision, which has a higher market cap than Nintendo and almost as large as the entirety of Sony. It's understandable why the largest tech acquisition in history that's buying out the largest IP and revenue base in gaming, would be a much bigger deal and worthy of at a bare minimum contractual stipulations to guarantee free market activity that doesn't cause long term harm to the competitiveness of the industry

This has nothing to do with how big Activision, a gaming company, is in relation to Microsoft as a whole, a nearly $3T windows, office, and cloud supplier. We are discussing two very different markets

So yes. The scale of the purchase matters. Bethesda, despite being a large acquisition (largest in gaming history at the time), was not under regulatory scrutiny; it wasn't big enough to be anticompetitive - no deals were necessary to ensure competitive markets in that case.

And yet, Activision is 10x the size of the previously largest acquisition in gaming history. Of course the situation is different and warrants active regulatory intervention.

There's a fair amount of bias in what you post, against the deal e.g. "active regulatory intervention" instead of "regulatory review". I get it, you're against the deal. Big doesn't automatically equate to bad, I was using your same logic and showed the correlation of numbers. It's absurd to expect one behaviour from Bungie and another from MS/Xbox. When you look from the consumer lens much of what you're on about just falls by the way side or is balanced out when not specifically speaking Sony related.

 

[Lasha]

I told you my thoughts with the answers I gave.

You don't have to suss out anything, but you can spare me the snark.

Fair enough. The answers you gave point you being an fanboy who wants markets to work one way for the plastic box they support and differently for every other market participant. I wanted to give you the chance to prove otherwise in case I misunderstood you.