gothmog
Gold Member
I don't have time to search but I think there's extra scrutiny applied to a company for a time after a regulatory procedure.
Microsoft / Activision Deal Approval Watch |OT| (MS/ABK close)
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Astray
Member
Activision is making money hand over fist under his reign, and he's the one who stewarded them towards this position, where the two biggest juggernauts are insulting themselves just to keep his content on there (or take it for themselves in the case of MS).
He's an incredibly high-powered executive in the gaming industry, and not someone whose expertise you want to lose, this makes him tolerable to higher management to a surprising extent. Satya would be nuts to lose him for any reason that doesn't involve direct and provable bodily harm caused by him to another person (i.e. things like toxic workspace threatening employees etc won't make them want to remove him, they already committed to keeping him on for a "transition period")
He's not leaving any time soon no matter what happens to the deal, all allusions to this on reddit or online forums are borne of pure astroturfing by Microsoft to make the deal appealing to ppl like you and me.
ToadMan
Member
The CMA is a government body effectively. It has to be seen to be doing what it can to enable businesses to operate fairly and one hopes they are also actually doing all they can. So sure, ask for behavioral remedies - they seem to make the offer before rejecting the remedies most of the time.
And who knows, maybe MS can produce a set of behavioral documents that are as good - as sound, easily enforceable and effective - as divestment. In which case, it still ends up with MS having no COD and whatever else the CMA said has to be divested.
Fundamentally it doesn't matter now - COD and those other titles as exclusives for MS in any form is gone.
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ToadMan
Member
Probably. I actually don't care - as far as I can tell he wasn't personally charged or convicted of any crime despite a couple of years of investigations. The SEC ruling said the company should have responded better to the allegations, but a $35m fine isn't very punitive. Barely a slap on the wrist for ABK.
If that's it for Kotick after all that digging and he's scot-free now, well this was all a non event anyway.
If he is personally responsible or directly knowledgeable of a crime of any type, sure, but that will have to be pursued through the courts, not via MS and its money mountain claiming some kind of frontier justice. People hang in the frontier, not get a $390m payout to ride off with.
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ToadMan
Member
James Sawyer Ford
Banned
I do seriously wonder what happens to Xbox if this deal doesn't go through like most of us expect. To me, this deal always felt like a ridiculous overkill to me. Acquiring the biggest publisher in gaming? A company worth more than Nintendo and almost as much as Sony? Why do you even need to do that?
Maybe Spencer and Microsoft's executives looked at the current gaming landscape and thought they had no possible path forward to be truly top dog (like they want) without something like this. It does make me wonder about their long-term committment to Xbox if this fails to go through. It seems like Microsoft doesn't want to be a third place player and will never be content with that.
I have a different take in that I think Xbox should take the studios they have (which are a TON) and try and find a way to cultivate them into a world class operation so they can compete on content within their own terms rather than relying on acquisitions or GamePass deals. This still isn't a viable path forward to first place, but I think they'd at least have far more consumer mindshare than they have now.
The PS5/XS console splits right now are becoming pretty enormous if you look at recent UK data
Maybe Spencer and Microsoft's executives looked at the current gaming landscape and thought they had no possible path forward to be truly top dog (like they want) without something like this. It does make me wonder about their long-term committment to Xbox if this fails to go through. It seems like Microsoft doesn't want to be a third place player and will never be content with that.
I have a different take in that I think Xbox should take the studios they have (which are a TON) and try and find a way to cultivate them into a world class operation so they can compete on content within their own terms rather than relying on acquisitions or GamePass deals. This still isn't a viable path forward to first place, but I think they'd at least have far more consumer mindshare than they have now.
The PS5/XS console splits right now are becoming pretty enormous if you look at recent UK data
Sorcerer
Member
Interesting. You are correct or course. I'm just wondering if Microsoft would want themselves to be seen as a corporate takeover monster. In that sense I was thinking acquiring Activision would be worth a decade of Acquistions. But yes, nothing would stop them from acquiring smaller entities in the future, which compared to Activision, 99 percent of them are. LOL!!!
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IFireflyl
Gold Member
Even if there is, that has nothing to do with the claims being made about this setting a precedent that will not allow Microsoft to engage in future acquisitions.
bentanchorbolt
Banned
I never felt they needed to do this, but since MS is a giant company with a lot of money, mergers like this are always on the table for them financially. They probably got wind that ABK was open to selling given all the nonsense with them as of late, and after running some numbers they saw it as a potential growth in the booming gaming market. I think at worst this deal not going through is just egg on the face of MS, although I'm sure there will be other fallout involved but nothing so dire it causes the Xbox brand to take a serious hit.
As much as people don't want to hear this, subscription services are the future and gaming is no different. Movies, music, and television, all moved to the subscription model. Even old world media like CBS and NBC have followed suit with their own platforms, and many software companies now only offer their products by yearly or monthly subs. Even Sony is doing a sub service, which I fully expect to resemble Game Pass at some point down the road.
The way I see the industry headed is EXACTLY like all the other media industries have headed. I honestly believe MS going after ABK was to get in early and lock up content for when the "streaming wars" or "sub wars" starts getting rough and you begin to see publishers locking up their content exclusive to their own subscription service. EA Play and Ubisoft+ have their own sub services right now, it would not blow my mind if in 5 years they begin to gatekeep their content to be excusive to their own platform, or move to make deals with platform holders like Sony and MS, etc.
Imagine the industry plays out like this, and six or seven years from now Sony signs a deal with Ubisoft or another publisher to be the exclusive home of their games. It's not a matter of if this happens but when.
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James Sawyer Ford
Banned
I honestly don't think so at all.
Gaming is something that people pay a premium for to play what they want. Subs will have a place for older content or mid/low tirer content but it will never transition into 100% sub model. Movies don't have that model either, still relying on theatres for initial releases, then purchases of the movies individually, and finally streaming as the last tier. I see gaming in much the same model.
demigod
Member
Yeah it's pathetic. These journalists are morons and spreading false information for their own agenda. You can't just swoop in and buy a JP company.Is this the current state of gaming journalism?
IFireflyl
Gold Member
bentanchorbolt
Banned
Game Pass has 30m subscribers so obviously subbing to that type of service is viable. We are out of the "proof of concept" stage.
Streaming only platforms are already home to some of the most critically acclaimed content regardless of platform, with both exclusive content and content that launches day and date on both the platform and outside of the platform at the same time. The idea that streaming is purely reserved for mid-tier or older content is a concept that aged out probably 5-10 years ago. That is simply no longer the case.
Movies seeing theatrical release isn't really comparable since people aren't just paying for the movie, they are paying for the spectacle of the large screen and audio system, they are paying for the experience of seeing a movie as it was intended by the content creators. A game being on a sub or paid for at full price is the same game.
SneakersSO
Member
Yeah, this is a bit off-topic to wonder about in here, but based on convos i've had, and whats going on with some of the returns we're seeing from MS, whats going on with GP, the cost of running the division in the way they have, and how far removed the hw splits are becoming this early on, its a fascinating topic to really wonder about and want to game out.
The biggest overarching theme to look at here is that Xbox as a division was in dire need of growth. They did a lot to puff up their numbers, but what we're seeing come out in court is painting a very different picture of the division and GP's effect on MS' ability to sell software within their own ecosystem. My understanding is that finding a growth avenue that didn't set some precedent that would fuck over their business plan was what they aimed for. I outlined it much earlier in this thread, but there are two main things that purchasing ATVI would've net them that they immediately needed:
1) Massive spike in revenue for the division. You can see how they are going to increasingly need this as the nature of SW sales increasingly flatlining within their eco as a direct result of GP is simply too much for them to handwave away. Getting ATVI and CoD would provide an immediate and material revenue spike that will sustain itself, in theory.
2) Growth opportunity for MS Gaming Division. This is a big one for them. Right now, their biggest growth platform is Steam, but based on the current set of objections that Valve (and Sony/Nintendo) have with allowing GP on their platforms comes down to % splits and rev share on in-game purchases. I think MS probably believed circa 2019 or 20, that they'd be able to negotiate with 2 out of 3 of those parties to allow them to expand the platform GP is offered on. That said, all platform holders are united on their requests on GP inclusion on their platforms. The ATVI purchase, however, would net them Battle.Net, which would be a fantastic growth platform once GP is offered there. It'd be one of the better ways of expanding the PC userbase of GP.
As far as MS is concerned, the process of turning Xbox from a HW-platform led eco system into a service-platform one was always one they wanted to do over a long period of time (10 years being the plan from what i've heard). The end result of which is that MS' published titles would ultimately just wind up appearing on whichever platform is willing to allow GP on it. Maybe there was some hope that having a new console generation launch without any of the issues of X1, with the value proposition of GP as an exclusive console feature, and with several low-cost price points would be enough to at least allow them to claw back some marketshare in their stronger markets, but its pretty clear looking at it now that thats just not gonna happen. If they can't gain marketshare with all i've mentioned, then its going to become crystal clear to them that being a HW-focused business division is no longer a viable business plan.
My understanding from the folks i've spoken to about the ATVI deal is that, with the power of Blizzard and CoD, MS was probably feeling that they'd finally found an acquisition that could make GP inclusion critical for Sony/Nintendo/Valve. They'd have CoD, Blizzard's slate, which by themselves generate amazing revenue for the platforms these titles appear on. I'm not quite sure what avenues MS has left to appease the two points I listed above before 2027 without ATVI's sale going through. Not only that, but it will also weaken their ability to make large publisher purchases going forward, which drastically limits their ability to fund raise along speculative outcomes.
No matter what, MS is not leaving gaming, so anyone having that fantasy can just stop that now. The studios MS bought will still be producing. What I do see changing if this deal doesn't go through, which I saw changing anyway just on a larger timescale and with far more friendlier terms for them, is what their role in gaming will become: they are going to ultimately wind up as a giant 3rd party service entity, but with a HW offering for their most dedicated users. But they were always going to have to expand their SW reach to any platform capable of running it; this future is probably far, far closer if the deal doesn't go through.
Sanepar
Member
What is the source of 30 million?
splattered
Member
Hey can you do me a favor and let me borrow your time machine this weekend?
bentanchorbolt
Banned
They had 25m in April 2022
In November of last year Sony cited Game Pass numbers at 29m (in documents to the CMA) I'm sure that can get confirmed through Google, and based off the word from MS that Game Pass is growing but didn't hit growth targets, its not outside of the realm that 30m or so is the number.
Whether the number is accurate or not is really immaterial. There is enough confirmed subs and its growing, and that suggests to me that my point about sub services for gaming being out of the "proof of concept" state is accurate.
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Sanepar
Member
If you know all Microsoft business they don't like competition. They like "almost" monopoly as windows and office. Cloud they are #2 on a ferocious battle with AWS.
What they really want with this deal is simple: Sony will not be a player as a platform anymore in 10 years(after the cod deal). The problem is regulators are not stupid and could see the long term.
James Sawyer Ford
Banned
GamePass has 30m subscribers because MS is willing to subsidize it and their dev studios at the sacrifice of retail sales, as pointed out in the CMA disclosures. So how "viable" it is by itself is in question. It's fine to run a loss-leading business but you eventually run into major headwinds (see: Netflix). And just because the Netflix model exists doesn't mean it will be the de-facto method.
Movies is comparable because it's the only option if you want to see those big blockbusters like Top Gun or Avatar on Day 1. The same is true for games you want to play. I aint waiting for Elden Ring or God of War to come on a sub service. I want them day 1
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Sanepar
Member
Based on the word of MS, yeah the source is your mind. ok
demigod
Member
My favorite is the chick doing the lipstick. Is that sophia?
SneakersSO
Member
I'm not sure how you can look at the massive hits Xbox as a division has been tanking lately and think that they'd simply walk out of this just a little embarrassed. Deals like this falling apart usually signal really bad times ahead in the short term for the companies involved, at least thats how things have almost always gone historically as far as M&A is concerned. The Xbox brand is already taking massive hits, btw. This would be a serious blow. They'd probably have to reassess their entire future strategy once this is done. Not to mention they'd have just had to handover 2.5-3b, not counting legal fees, on something that ultimately didn't pan out.
Not only is gaming very different in regards to subscription services, there were articles from Wall Street investors not even 1 month ago indicating that the Subscription service market was a bubble that was already bursting, and that the business models derived from subscriptions were actually net worse than the ones that came before it. We have seen a massive amount of business restructuring around sub service holders, all aimed towards converting their models from high-investment to sustainability. Most of the big subs lost loads of users and are indicating there is even more loss on the horizon.
Now as far as gaming is concerned, I want to ask you this - why do you think not a single other publisher has gone for a sub model, or any other major platform holder for that matter, that is as value rich as GP? Its a very simple reason: its not a sustainable or profitable business model, certainly not more so than whats happening now. In fact, MS is having to pay out of their pocket right now for port support and saddling these with GP deals for it; thats not a position any platform holder wants to be in. MS is here because they wanted to disrupt the market enough that they could slide in with a value proposal that consumers would love and that no other market competitor would be able to do, cause the brunt of the loss was being sustained by the 2nd biggest parent company in the world.
Even ATVI, when last asked about this on record, Kotick specifically stated that their titles and products were not suitable for the subscription service business model. The only way the industry will move towards this is if the fundamentals of the core gaming industry also change, and I don't see that happening.
3liteDragon
Member
I must've missed this, could you give me the source on that?
Then they should have no problem divesting Activision Publishing along with Blizzard Entertainment & just acquiring King. I mean, it was all about mobile & King in the end right?
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Pelta88
Member
Kotic trying to explain that math to his shareholders
You do realize that by country, the UK, has the second highest spend on COD annually, right?
bentanchorbolt
Banned
Sure. Thanks for sharing.
I guess we will wait and see how the industry plays out.
Whatever happens will happen, I've been wrong before not super worried about it.
Time will tell how this all plays out. If MS falls flat on account of this being a poor model, the market will correct itself, as it always does.
SneakersSO
Member
1) GP does not have 30m subs (yet). They'll get there, but their cost per user is fucking astronomical and is only set to increase. The entire entertainment subscription market is completely changing their business model towards sustainability right now. And with this massive overcorrection, we are probably going to see even more users leave the big services (Netflix/D+/HBO Max/Hulu).
To add to this, GP is famous within these financial circles for having one of the largest churn rates amongst all of the entertainment subscription services.
2) If what you're saying is true, then we'd naturally be observing a decrease in SW sales across the entire industry, as well as a far bigger spike in GP growth than what we've gotten. However, this isn't happening: Sony/Nintendo/Valve are now moving more SW than at any other point in corporate history. The industry is selling more software now than at any other point in its modern history, and thats with GP disrupting the market.
That being said, the one platform where GP does exist, Xbox, now has one of the worst outlooks for SW sales, by MS' own admission both in their most recent quarterly report and in the CMA preliminary findings. And as far as GP growth is concerned, the biggest spike they saw was off the back of COVID-19 in 2020-2021; the numbers have essentially stalled since then. They've even missed their internal growth forecast for GP two years in a row now; one of Nadella's executive bonuses is tied to the Gaming Division's performance and he too has missed it for two years as well.
Yes, subscription services will have their place in gaming, so don't think I am anti sub service. Nintendo's service, Ubisoft+, EA Play, PS+ and its tiers, even GP - they aren't going anywhere. But unlike GP, all the other services have all been structured towards maintaining their own sustainability as well as insuring they do not cannibalize on full-price SW sales. Heck, GP itself could totally work when aimed squarely at indie/A/AA productions - if there were a indie-game GP that was platform agnostic, it would probably be an incredible service for indie devs around the world. But as it currently stands, with GP wanting to use AAA productions as their bait to grow the service, its simply far too expensive to work long term.
bentanchorbolt
Banned
Those are good points but we can just wait and see what happens. I've said my peace on this, am okay with being wrong if my predictions don't pan out.
SneakersSO
Member
All good man. I appreciate your perspective. Its just a discussion anyway. No one knows what will happen. All we can do is speculate with the data in front of us and hope for the best for our hobby of choice.
Pelta88
Member
You're really willing to debate someone who says GP is viable despite all the legally submitted evidence from Microsoft which demonstrates, emphatically, that the service is a disaster?
Sometimes you gotta let people live in their own world, realm, truth, or wherever they feel most comfortable. Once they demonstrate that they working with alternative facts, understand that they're loopy, then smile and wave. I promise you, it's way more fun.
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MasterCornholio
Member
Both of you make good points. But I agree that anything can happen. With regard to this deal it's not going to be smooth is all that I'm going to say. Definitely more rough than many were expecting.
SneakersSO
Member
For sure. At minimum, CoD exclusive on almost any time frame is effectively off the table. Just gonna have to wait and see how much choppier these waters will get.
bentanchorbolt
Banned
You're really willing to debate someone who says GP is viable despite all the legally submitted evidence from Microsoft which demonstrates, emphatically, that the service is a disaster?
Sometimes you gotta let people live in their own world, realm, truth, or wherever they feel most comfortable. Once they demonstrate that they working with alternative facts, understand that they're loopy, then smile and wave. I promise you, it's way more fun.
Daneel Elijah
Member
The difference is that for a long time movies had to spend months in theaters before being disponible in DVD for example. This give them the time to make money(or not of course). The gaming industry do not have the same history. Recently Netflix and Disney choose to put some films directly on streaming but this is not the norm. Series are different naturally. A game being free or not, being on a sub or not change how it is perceived. Look at Astro bot VS Knack. Or Wii sport games. And perception of a product can be enough to change his reception and make it fail or succeed. That's why marketing is so important after all.
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MasterCornholio
Member
Basically. Regulators knew that COD would be a problem if there was any chance of it becoming exclusive. It's up to Microsoft to decide if they really want COD if they want the easy way out with this. If not then they will have to make some extreme decisions just to keep the franchise. Something that may not line up soon their long term goals.
Seems like the dream of getting COD without any issues isn't going to happen for them. Maybe there's a way for them to do that but I'm not seeing it at the moment.
ToadMan
Member
Sure.
It has a small problem right now - its stuck in first gear. I'll get it fixed last month.
Enjoy!
SirTerry-T
Member
Human decency is the first thing out of the window when people are trying to score internet comment hero points. Especially where fancy toys for playing games on are concerned.
SneakersSO
Member
Felt like responding to this cause its an interesting discussion point. So, generally speaking, at most point where companies face this 'divest or walk' from regulators, they almost always opt to just walk away. In order to divest, you have to get basically everyone on board with the divestment strategy, so in this case, both MS and ATVI need to sit down and renegotiate the deal and the acquisition share price (believe MS is paying $96 per share here).You don't think MS and ABK won't try to divest anything? Honest question, because I really don't know.
I really don't see a world where ATVI and their shareholders agree to spin out some portion of Activision or all of CoD. Maybe, if MS was being honest about this being about mobile more than anything else, I could see a situation where the deal gets heavily revised so that its purely about King, but I don't see that happening either. The big get here for ATVI is getting MS to buy each outstanding share at over $20+ more than what the stock is currently trading for. Having to divest portions of ABK in order to facilitate the deal means that MS is going to pay quite a bit less per share than they normally would to ATVI, and at that point, maybe the sale is just far too little for ATVI and its shareholders.
Normally, companies will do everything to not get broken up, so I imagine MS and ATVI are probably not really willing to do this. But who knows! I guess we'll find out in a few weeks. Historically though, this almost never happens. But this is also the largest purchase by dollar value thats ever hit tech.
freefornow
Member
FFS!
Embarrasing!
Once again I need to put my Green Rat membership badge away in the drawer!
My "I Heart Phil" poster is still staying up though.
Topher
Identifies as young
SoloKingRobert
Banned
You can also say the same about Sony, preventing retailers from selling digital game codes..
https://stevivor.com/news/rumours/sony-will-stop-providing-digital-game-codes-retailers-april/
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James Sawyer Ford
Banned
No, that's not the same thing like...at all
Topher
Identifies as young
Not the same thing at all.
bentanchorbolt
Banned
Jez lmao
James Sawyer Ford
Banned
The relationship between Microsoft and Sony was permanently tarnished the moment that Microsoft bought Bethesda, IMHO. Ain't no putting that genie back in the bottle.
Not like MS/Sony work together much at all, it just means that Sony is probably LESS likely to give in to whatever MS wants in the future wrt their GamePass initiatives.
As for Activision? Their primary market is on Playstation. To say its tarnished would be Activision cutting of their nose to spite their face.
MasterCornholio
Member
Topher
Identifies as young
Seriously this guy is mentally ill at this point.
Too many people are invested emotionally in this thing. It is a bit absurd.
MasterCornholio
Member
Yes I hope he doesn't do anything crazy if this doesn't work out.
Hero of Spielberg
Member
Putting aside that guys 'thoughts' the request for performance reviews could be an attempt to potentially reveal market share KPIs which would likely include Nintendo.
James Sawyer Ford
Banned
My feeling is....if you're a Microsoft fan. Why do you really care if it doesn't work out?
You're still getting Activision Blizzard on your system....just not potentially exclusively and not on GamePass
The only people that have any right to really have a vested interest are Playstation only gamers.
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Nothing1234
Banned
This deal is dead without a structural remedy from Microsoft here. People are not reading what has been said and are jumping to fanboy conclusions.
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