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[ReBurn]

By your own estimation, it would take ~23 years of them averaging 3 billion in profit to pay itself off. The reality is that with less exposure and individual sales, it would take even longer. With a CoD competitor, as I mentioned, it would make it impossible.

That is the nature of subscription content from premium content, especially when it's a loss leader. If you can't understand that, you've got a problem understanding basic things.

We can see that with streaming tv content right now. Why you think gaming would be immune makes no sense to me.

That's not how it works, though. It doesn't have to be "paid off." The Activision assets Microsoft gains with this acquisition don't suddenly lose all of their value and become worth nothing. Cash is debited and other asset line items are credited with the real value of the assets purchased. Any revenue and profit show up in their respective line items. Net worth could actually go up considering the value of cash is decreasing due to inflation.

 

[Menzies]

By your own estimation, it would take ~23 years of them averaging 3 billion in profit to pay itself off. The reality is that with less exposure and individual sales, it would take even longer. With a CoD competitor, as I mentioned, it would make it impossible.

That is the nature of subscription content from premium content, especially when it's a loss leader. If you can't understand that, you've got a problem understanding basic things.

We can see that with streaming tv content right now. Why you think gaming would be immune makes no sense to me.

Do you know which side of a balance sheet assets sit on?

 

[quest]

I thought this part on page 57 of the CMA document was quite insightful by the CMA



I'm guessing they are looking at games like Minecraft and wondering why they are only on Gamepass exclusively as a multi-game subscription service and extrapolating from that, ABK games will have the same fate.

Maybe they could get basic facts correct instead of being one sided. I have zero issues if the deal is killed if sony has to agree to no more money hats of any major studio. And sony has to give up exclusive content in COD since as Sony says COD is everything to the existence of a home console. Can't have it both ways let sony use its dominant positioning lead to advantages if Microsoft can't use strengths to its advantage.

Deathloop, Assassin’s Creed Origins and More Added To PS Plus

Some new additions to PlayStation Plus came yesterday, bringing some big games (and classics) to subscribers.

www.cinelinx.com

 

[Mibu no ookami]

Maybe part of this acquisition is to bring on more subscribers to make more money and get a return on their investment sooner than that? I mean if they made 2.9bn revenue from consoles alone in 2021, and they want to expand their service to TVs, streaming sticks, more PCs, with the addition of the new IP ... you'd have to assume they plan on growing that revenue significantly in the coming years.

Absolutely they're looking to generate more revenue with more subscribers.

If you could basically add all CoD players to GamePass in an ideal world, so an extra 15-20 million users. That's at least 150 million dollars per month or 1.8 billion dollars per year to upwards of 2.4 billion dollars per year.

Then you expand to TVs, PCs, Macs e.t.c. maybe you get an additional 5-10 million users. Now you're up to maybe 30 million more subs per year. So now you're looking at 3.6 billion dollars more per year, but now you raise the price of the sub from 10 to 15 dollars. Now you're looking at an additional 5.4 billion dollars on top of the 2.9 billion. Meaning you're looking at just shy of 10 billion dollars per year in revenue and growing from there.

In this scenario, you might fairly quickly make up for the 70 billion you put into Activision.

I just don't see it working out like that. I think they're going to hit a ceiling early on both CoD and on streaming devices.

 

[ChorizoPicozo]

You guys are the ones saying that it only matters for Microsoft and more specifically it only matters for Game Pass.

Hold on. Don't put my in the same bag without knowing what is actually MY point of view.

Please detail exactly how the specific profit margin for game pass actually matters.

That's is were you are wrong about me.

1. I asked you: 'is this even a genuine question?

Because I have seen several people using that question to dismiss the debate/convesarion around GP profits or lack there of. Profits are what keeps a company afloat. Companies are not Charity.

My point of view is more in line of:

How GP is going to affect videogame design?
What are the actual numbers GP needs to hit to make MS happy. Why?

Just as Netflix, Disney+ are spending billions every year to feed the insatiable monster, what Xbox is doing right now is basically promising us a future that is not realistic:

Offering AAA games "for free" at a consistent pace.

Games take longer to make. AND as with Netflix/Disney+ you need the content to actually drive up subscriptions. But not any content, quality content is what actually makes the difference.

and you could said: "this is why they are buying studios and publishers'

And this is why I ask:
is that going to be enough?

The implications have incredibly deep consequences for game design. We have seen examples of this in recent years.

I've already told you that I don't believe it does because the value that it adds for Microsoft is worth the investment they are making in it for them to grow it. That's been my position all along with zero ambiguity. If they didn't think it was worth it they wouldn't be doing it.

As you have notice I AM not taking from a financial aspect of this. More for the impact of game design.

I also don't think that any individual investment Sony makes matters in aggregate. It's perfectly fine to me that they paid $4 billion for Bungie because that investment could grow their market share and long term profitability, Certainly there are parts of what they do that don't generate profit at the line item detail. But it doesn't matter because many of those things that don't earn profit on their own serve to enable things that do make profit.

If we were going by your logic then the tens to hundreds of millions of dollars Sony invests in a single new game would be throwing money away and would be an example of Sony using its pile of cash to bolster a failing project until it earns more money than it costs to make it.

Wait wat? I didn't even had mention or presented "my logic"

It's a completely stupid notion, but it's exactly the argument you guys make about Game Pass.

Again. Don't assume things about me.

If a product needed to be profitable on day 1 then there would be no new products ever. Literally everything requires investment to be successful. But somehow it's bad and will kill the industry when Microsoft does it.

Reiterating my logic/point:

Profits = security
No profits = force change to achieve profits.


GP as a platform/service/busniness model:

1.is fairly new = unproven
2. MS/Xbox wants it to grow ASAP:
MS is willing to sink money to achieve this....for how long and how much?
How this driven force for profits is going to change game design?.

It other words:

If GP is profitable right now. Cool. The future is great.

If GP is not profitable. What are the changes that will be forced to make that happen?.

 

[Mibu no ookami]

Do you know which side of a balance sheet assets sit on?

An asset that cost you 70 billion but is probably valued closer to 20-30 billion?

 

[IFireflyl]

The CMA doesn't need evidence that Microsoft owning CoD is going to make them the market leader. All they need is to to come to the conclusion that, that hurts competition and thus hurts consumers.

I don't know that I necessarily believe that. I actually think that this will help the industry. Activision is a mess and to a degree so is Microsoft, but I think Microsoft making this move forces Sony to be more competitive, which helps the industry. It also means that other companies like Take2, EA, and Ubi Soft can put more money into an FPS in case CoD does disappear from PlayStation.

I'm convinced that CoD game be replaced. Unlike Madden or FIFA there is no license associated with CoD that keeps it in the mainstream.

You look at FPS historically and there has never been a sustained leader in this field, until people kind of just stopped trying.

You had Quake, Doom, and Unreal back in the day and really it was all PC for FPS.

Then Halo kind of changed the landscape with console and Sony never really tried hard enough to compete directly with Halo because at the time Sony didn't really care about 1st party software as much as they do now.

Then you saw a shift towards military shooters with Medal of Honor and Call of Duty. Medal of Honor fell off, but then you saw the rise of Battlefield, which also fell off.

Then we kind of saw the rise of the F2P era with games like Fortnite, PUBG, Apex Legends, and Overwatch.

Sony dreads that they really missed the boat on all of these, which is why you see them talking about GaaS. They tried to get into the FPS space to a degree with Resistance and with Killzone. Resistance 1 actually sold really well, but the franchise got worse rather than got better and they shut it down. Killzone got better but then got worse.

I think they're looking to make several moves, but they don't want to influence the CMA and other regulators anymore than they already have, but there's another side to that. If the CMA approves this, it opens things up for Sony to respond.

I think the biggest response they could make is buying Take2, but there are a number of small buys they could make that could have an impact. I think CDPR, FromSoftware, Capcom, Square Enix (though it isn't a good buy) are obvious choices. Take2 is the best option they can and should make.

It doesn't seem like you understand how financially different Microsoft and Sony are. Sony can't afford to buy Take-Two Interactive. Their total budget for acquisitions through 2023 was $18 billion. They're down to less than $10 billion remaining, and it would cost about $15 billion to acquire Take-Two Interactive.

To put that into perspective, this Activision Blizzard acquisition cost about four times more than Sony's entire acquisition budget through 2023, and there is no evidence to suggest that that is the maximum amount that Microsoft has budgeted for acquisitions.

 

[Mibu no ookami]

That's not how it works, though. It doesn't have to be "paid off." The Activision assets Microsoft gains with this acquisition don't suddenly lose all of their value and become worth nothing. Cash is debited and other asset line items are credited with the real value of the assets purchased. Any revenue and profit show up in their respective line items. Net worth could actually go up considering the value of cash is decreasing due to inflation.

Microsoft's higher-ups and shareholders are going to want to see ROI on Activision and relatively soon. You are clearly unfamiliar with failed M&A and just how large of a purchase this is, which makes it ripe to be seen as a failure.

 

[Ozriel]

Really? You think that's what the issue is?

So in the same vein could Sony counter MS' console sales argument by suggesting that the only reason they are ahead with console supply is due to not diverting chips. You clearly haven't read the points raised by the CMA. It has nothing to do with number of chips diverted anywhere.

Nobody is seriously claiming that MS has diverted millions of units of console hardware. But it's certainly a significant number, and indisputably, the point being made is that Sony made a conscious decision to delay a renewed attempt at another crack at the streaming market. They've invested their resources elsewhere - most notably in selling the hardware directly to consumers.

The assertion that MS has an unassailable lead or that Sony would struggle to compete in Cloud streaming just doesn't hold water.

What makes you think it doesn't? I've yet to see MS post the profit numbers for GP, they seem to love posting just the revenue numbers though.

Microsoft doesn't ever post revenue numbers for Gamepass.

 

[Torrent of Pork]

Are you serious?

Anyone suggesting that an outcome other than totally consolidated cloud computing will fit with the world's rapid endeavours to lower our carbon footprint - as a world - clearly isn't getting the memos IMHO.

How many huge energy chugging cloud farms in each and every country of the world - to lower cloud gaming latency - do you think the planet can sustain? Do you think it could cope with one for each platform holder, one for each major publisher with Amazon and Google also? What about 1 for each major company in the world - just so they aren't out business manoeuvred by MSFT like Sony is with cloud services? Don't you think that sounds ridiculous?

The three big players are already probably 2, too many IMO - because there should be zero need for redundant cloud farms - and this will be the overriding reason why an ecologically conscious company like Sony isn't looking to be the 4th big player, beyond all the other technical, financial and staffing reasons they don't have their own Azure.

Ideally, like an extension of the telecom networks, cloud should have many providers all working together with redundancy of service offerings provided virtually, rather than farms physically being replicated by each provider in every country.

The CMA's analysis of MSFT's current unique placement with Azure/xcloud and zero costing of windows OS licensing makes it easy to see that even if this deal isn't blocked, MSFT/Amazon/Google might all be forced to OpenReach their Cloud operations in the coming years, so that a basic cloud service capability at a technical level can be offered by all that wish to replicate the telecom's market LCR (least-cost-routing), but with cloud (Least cost cloud serving or LCCS).

I honestly never expected climate change to be a reason the MS/ABK deal should be shut down, but here we are.

 

[Mibu no ookami]

It doesn't seem like you understand how financially different Microsoft and Sony are. Sony can't afford to buy Take-Two Interactive. Their total budget for acquisitions through 2023 was $18 billion. They're down to less than $10 billion remaining, and it would cost about $15 billion to acquire Take-Two Interactive.

To put that into perspective, this Activision Blizzard acquisition cost about four times more than Sony's entire acquisition budget through 2023, and there is no evidence to suggest that that is the maximum amount that Microsoft has budgeted for acquisitions.

"Total budget for acquisitions"

You don't know how M&A works and how quickly plans change and how M&A deals are executed.

First Sony outlined a plan for 2 trillion yen or 18-19 billion dollars worth of investments. This doesn't mean they have to spend that much or that they can't go over.

Second, M&A doesn't need to just be a cash exchange. Sony can also leverage stock in an acquisition for a company the size of take-two. They can also get a line of credit for additional funding.

All SIE needs to do is go to the Sony board and make an argument as to why they need a more aggressive approach and given that PlayStation is their chief product, they have quite the leverage to do so.

 

[Mibu no ookami]

Hold on. Don't put my in the same bag without knowing what is actually MY point of view.


That's is were you are wrong about me.

1. I asked you: 'is this even a genuine question?

Because I have seen several people using that question to dismiss the debate/convesarion around GP profits or lack there of. Profits are what keeps a company afloat. Companies are not Charity.

My point of view is more in line of:

How GP is going to affect videogame design?
What are the actual numbers GP needs to hit to make MS happy. Why?

Just as Netflix, Disney+ are spending billions every year to feed the insatiable monster, what Xbox is doing right now is basically promising us a future that is not realistic:

Offering AAA games "for free" at a consistent pace.

Games take longer to make. AND as with Netflix/Disney+ you need the content to actually drive up subscriptions. But not any content, quality content is what actually makes the difference.

and you could said: "this is why they are buying studios and publishers'

And this is why I ask:
is that going to be enough?

The implications have incredibly deep consequences for game design. We have seen examples of this in recent years.


As you have notice I AM not taking from a financial aspect of this. More for the impact of game design.


Wait wat? I didn't even had mention or presented "my logic"

Again. Don't assume things about me.

Reiterating my logic/point:

Profits = security
No profits = force change to achieve profits.


GP as a platform/service/busniness model:

1.is fairly new = unproven
2. MS/Xbox wants it to grow ASAP:
MS is willing to sink money to achieve this....for how long and how much?
How this driven force for profits is going to change game design?.

It other words:

If GP is profitable right now. Cool. The future is great.

If GP is not profitable. What are the changes that will be forced to make that happen?.

This is something that these kids don't understand.

Google shutdown Stadia and are often to shut things down quickly when they don't pan out because they don't believe in throwing good money after bad.

Microsoft bought skype for 8.5 billion dollars and how has that turned out? It was an utter failure. It's the primary reason why Nadella ended up becoming the CEO over Bates and why Bates is a journeyman CEO now.

GamePass is a huge gamble by Spencer and Nadella has backed him to the tune of 70 billion dollars. Phil Spencer has a limited amount of time to make this work, but he has a lot of latitude after purchasing Mojang and I think the Bethesda purchases probably a good one for them as well. His failures surrounding 343 however aren't helping him and this Activision deal could very well blow up in his face. This is one of the biggest deals in history, certainly within the entertainment industry.

 

[ManaByte]

Microsoft bought skype for 8.5 billion dollars and how has that turned out? It was an utter failure.

Skype still exists though. More people use other things like Teams these days, but Skype wasn't shut down.

 

[Mibu no ookami]

Skype still exists though. More people use other things like Teams these days, but Skype wasn't shut down.

It doesn't need to shutdown for it to be a failure.

One they have shutdown Skype for Business and their inability to propagate skype in to a success after spending almost 10 billion dollars on it is evidence of their mismanagement.

Similarly, Activision Blizzard doesn't need to shutdown for this to be a failed M&A for Microsoft.

70 billion dollars needs to turn into 140-200 billion dollars for Microsoft and I don't see them ever breaking even. Activision doesn't have the IP or development talent to warrant this size of an investment and it's only a matter of time until we see an exodus from CoD, especially as Sony will ratchet up the competition in that space now.

Microsoft is betting on CoD GROWING let alone shrinking its userbase. If it's at 30 million today and in 10 years it's at 20-25 million, this is a failed M&A.

 

[Menzies]

Hold on. Don't put my in the same bag without knowing what is actually MY point of view.


<snip>

Here's my point of view as counter; GamePass doesn't need to be profitable. Xbox does.

GamePass can continue in perpetuity as the loss leading hook to bring you into their store, so long as enough consumers are buying cosmetic skins, DLC and other retail games - it doesn't matter about GamePass profits siloed.

 

[ManaByte]

One they have shutdown Skype for Business

The calling interface in Teams basically IS Skype for Business.

 

[DeepEnigma]

I still have my PS3 up and running. Is that why I had to tell Phil Spencer to get off my lawn? He was counting consoles, wasn't he? Sneaky bastard.

 

[ChorizoPicozo]

Here's my point of view as counter; GamePass doesn't need to be profitable. Xbox does.

GamePass can continue in perpetuity as the loss leading hook to bring you into their store, so long as enough consumers are buying cosmetic skins, DLC and other retail games - it doesn't matter about GamePass profits are siloed.

Xbox as a division right?. But that is what I am saying.

MS/Xbox can make their shenanigans in their financial report. To hidde the actual numbers. Avery companies does that.

For example if you watch Netflix and watch the first 30 seconds of something like that, they count it as a view. Yet, they are foce to make changes to make profits or maximize them.

We know that Disney+ and Netflix are going to introduce a subscription tier with ads.

MS/Xbox can hide or obfuscate GP numbers to the public and shareholders, internally they will still be forced to try to make a profit or make more money (capitalism baby. No one company likes to loose money) And that is the point.

 

[Mibu no ookami]

The calling interface in Teams basically IS Skype for Business.

They aren't. They are completely different programs. Teams utilize SOME of the tech from SFB, but it's a new application entirely and as a result SFB was shelved.

They bought Skype hoping to be the leader in comms and spent 10 billion dollars in doing so only to be like the 4th or 5th place leader behind Zoom, Meta, Apple, and maybe even Google...

 

[ManaByte]

They aren't. They are completely different programs. Teams utilize SOME of the tech from SFB, but it's a new application entirely and as a result SFB was shelved.

They bought Skype hoping to be the leader in comms and spent 10 billion dollars in doing so only to be like the 4th or 5th place leader behind Zoom, Meta, Apple, and maybe even Google...

Skype was around since 2003 and MS bought it in 2011. Most people didn't even hear of Zoom until 2020 when everyone was using it during COVID while ignoring its dodgy security. Skype still exists. I see what you're trying to do here, but Nokia would be a better angle for you to take since nothing of Windows Phone still exists. Even the Surface Duo runs Android.

 

[Mibu no ookami]

Microsoft bought Rare in 2002 for 375 million dollars.

That's 618 million dollars adjusted for inflation.

They never got that money back. That comes from mismanagement, mis-fit, and a lack of vision for 20 years.

Ultimately the people who worked there then do not work there now. Craig Duncan the head of the studio has only been there for 11 years. I'm sure they're happy with Sea of Thieves, but this buy never worked out.

This is more than 10x that purchase, hanging mostly on the sustained success of CoD... and the sustained retention of Infinity Ward and Treyarch...

That just makes very little sense, especially with what has gone on there. My guess is that people aren't leaving because they want the deal to go through, but as soon as it does, they're out.

 

[Mibu no ookami]

Skype was around since 2003 and MS bought it in 2011. Most people didn't even hear of Zoom until 2020 when everyone was using it during COVID while ignoring its dodgy security. Skype still exists. I see what you're trying to do here, but Nokia would be a better angle for you to take since nothing of Windows Phone still exists. Even the Surface Duo runs Android.

I'm not advocating for Zoom here, I'm simply saying that Microsoft had a pricey M&A and mismanaged it subsequently and that M&A was significantly smaller than this one and probably had better footing and ease of integration.

 

[CatLady]

I thought this part on page 57 of the CMA document was quite insightful by the CMA

I'm guessing they are looking at games like Minecraft and wondering why they are only on Gamepass exclusively as a multi-game subscription service and extrapolating from that, ABK games will have the same fate.

This is sad. Aside from the fact Xbox has NO responsibility to provide games for competitors sub services, this just shows how utterly clueless CMA is. Arkane is an Xbox first party and Arkane's game, Deathloop is in fact on PS+. I don't foresee this becoming a common occurrence, because why would anyone expect Xbox to provide content for a competing service.

It would be nice if they could at least get their facts straight when making absurd and unreasonable demands on Xbox's use of their own first party games.

 

[nikolino840]

This is sad. Aside from the fact Xbox has NO responsibility to provide games for competitors sub services, this just shows how utterly clueless CMA is. Arkane is an Xbox first party and Arkane's game, Deathloop is in fact on PS+. I don't foresee this becoming a common occurrence, because why would anyone expect Xbox to provide content for a competing service.

It would be nice if they could at least get their facts straight making absurd and unreasonable demands on Xbox's use of their own first party games.

Yeah I wonder why the dlcs of destiny 2 are no longer on gamepass those things are normal...cma don't know nothing about games i think

 

[Mod of War]

Mod of War needs to give Microsoft a warning, I think

 

[ReBurn]

Microsoft's higher-ups and shareholders are going to want to see ROI on Activision and relatively soon. You are clearly unfamiliar with failed M&A and just how large of a purchase this is, which makes it ripe to be seen as a failure.

That has nothing at all to do with what I said. And I'm quite familiar with M&A, thank you. The MBA I earned mentioned a thing or two about them. The Activision deal comes with immediate ROI in the form of a stable and profitable revenue stream and Microsoft have mentioned on more than one occasion that they do not intend to disrupt it.

And this is not a failed acquisition. Even if CMA ultimately decides to block it there's a better than average chance that CAT or the courts overturn it. I guess we'll see what happens.

 

[adamsapple]

What makes you think it doesn't? I've yet to see MS post the profit numbers for GP, they seem to love posting just the revenue numbers though.

They've literally never posted any revenue numbers, the ones we got are from CADE's documentation and they also had to redact them a few days after.

 

[SportsFan581]

MS's response was very aggressive (you've got to love the fire there), but you can see the way they might be going with it. When the CMA decisions get overturned, it's almost always as a result of the assumptions they make being deemed improbable and unsupported. The direct shots at the CMA regarding public sentiment about their positions so far might seem unnecessary now but could come in handy later. Plus, on a deal of this size the bar for a phase two was practically on the floor (even though MS thinks it slipped under even that ) and things have to be sharper and more supported in the phase two anyway (at least from what I've read).

 

[Menzies]

MS's response was very aggressive (you've got to love the fire there), but you can see the way they might be going with it. When the CMA decisions get overturned, it's almost always as a result of the assumptions they make being deemed improbable and unsupported. The direct shots at the CMA regarding public sentiment about their positions so far might seem unnecessary now but could come in handy later. Plus, on a deal of this size the bar for a phase two was practically on the floor (even though MS thinks it slipped under even that ) and things have to be sharper and more supported in the phase two anyway (at least from what I've read).

Like taking the position that streaming will become the default standard that will replace consoles, in any significant way, in any recent timeline - whilst being a market with historical challenges and failed attempts that hasn't even reached 5% of the market?

That tiny, little ol' assumption?

 

[Topher]

What makes you think it doesn't? I've yet to see MS post the profit numbers for GP, they seem to love posting just the revenue numbers though.

Theoretically Microsoft needs zero consoles for GP to be successful. If 100 million subscribe to Game Pass on PC and/or via streaming then same difference. Granted, that is extremely unlikely but it is kind of funny that I'm currently playing Octopath Traveler via Game Pass on my MacBook Pro right now. And I was just thinking, I don't really need Xbox for this. It is what it is.

Speculating on profit is fine, but we are not going to get those numbers. Seems fair to say that net sales are good enough for Microsoft to continue on with Game Pass.

 

[THE DUCK]

So we can all agree that MS offer was most likely in bad faith and their argument to the CMA is disingenuous.

After all, GP isn't on any other platform/store (EGS, Steam, GOG, NSO, PSN, etc), other than their own.

They seem much more interested in growing their walled garden than to expand gaming everywhere, like they say they are.

If anything, they are providing arguments to the regulators against the acquisition.

You have absolutely zero idea if they approached all of these with valid offers and were declined by all of them. So no, we can't all agree.

They aren't providing the regulators arguments against themselves, this isn't some mom and pop organization just throwing crap at the wall. Let's see, some person on a random forum, or one of largest and most successful companies layers, whom might know more?

 

[JerryinSoCal]

Absolutely they're looking to generate more revenue with more subscribers.

If you could basically add all CoD players to GamePass in an ideal world, so an extra 15-20 million users. That's at least 150 million dollars per month or 1.8 billion dollars per year to upwards of 2.4 billion dollars per year.

Then you expand to TVs, PCs, Macs e.t.c. maybe you get an additional 5-10 million users. Now you're up to maybe 30 million more subs per year. So now you're looking at 3.6 billion dollars more per year, but now you raise the price of the sub from 10 to 15 dollars. Now you're looking at an additional 5.4 billion dollars on top of the 2.9 billion. Meaning you're looking at just shy of 10 billion dollars per year in revenue and growing from there.

In this scenario, you might fairly quickly make up for the 70 billion you put into Activision.

I just don't see it working out like that. I think they're going to hit a ceiling early on both CoD and on streaming devices.

Yeah and honestly the best selling COD on PS4 was 14 million and there is no way they get everyone who bought that game to switch platforms.

 

[JerryinSoCal]

This is sad. Aside from the fact Xbox has NO responsibility to provide games for competitors sub services, this just shows how utterly clueless CMA is. Arkane is an Xbox first party and Arkane's game, Deathloop is in fact on PS+. I don't foresee this becoming a common occurrence, because why would anyone expect Xbox to provide content for a competing service.

It would be nice if they could at least get their facts straight when making absurd and unreasonable demands on Xbox's use of their own first party games.

Deathloop was already under contract with Sony before MS bought the studio, this is all likely part of the agreement they had from the start.

 

[JerryinSoCal]

It doesn't need to shutdown for it to be a failure.

One they have shutdown Skype for Business and their inability to propagate skype in to a success after spending almost 10 billion dollars on it is evidence of their mismanagement.

Similarly, Activision Blizzard doesn't need to shutdown for this to be a failed M&A for Microsoft.

70 billion dollars needs to turn into 140-200 billion dollars for Microsoft and I don't see them ever breaking even. Activision doesn't have the IP or development talent to warrant this size of an investment and it's only a matter of time until we see an exodus from CoD, especially as Sony will ratchet up the competition in that space now.

Microsoft is betting on CoD GROWING let alone shrinking its userbase. If it's at 30 million today and in 10 years it's at 20-25 million, this is a failed M&A.

That's why I'm skeptical of the streaming model for gaming, at least the way Xbox/MS are going about it. It's one thing to make extra money on the back end with a legacy catalog service but to put all of your eggs in one basket is just crazy. It's going to cost so much money to make content to keep a service like that going I don't know where they'll make it up. Netflix has over 220 million subscribers, they spend roughly $10 billion to $15 billion on content a year, game pass has about 25 million according to MS and they will have spent almost $100 billion if this deal goes through just buying studios in the last 5 years, that doesn't cover the cost of actually making the games etc. It takes a lot longer to make a single game than it does to make several seasons of a tv show.

 

[Three]

I disagree that people are underestimating any of that. Everyone knows that cloud infrastructure isn't free, but it's an investment Sony has already made through purchasing OnLive and Gaikai, which ultimately resulted in PS Now. This Is infrastructure Sony already has and does not have to build from the ground up. They are not a new entrant. They have been there since January of 2014. It has been available on PS4, PS5 and PC for years.

At this point, for Sony, it pretty much is diverting SoC and making it happen. They have the network and infrastructure right now. But so far they have chosen not to. So it's kind of disingenuous to push the notion that they would have to start from zero.

Again it failed with PS Now. I'm not saying they are a new entrant and nobody is saying they would start from zero. I was refuting the notion that the reason that Azure is better is because "they diverted SoCs" that has nothing to do with bandwith, space, locations and economies of scale.

Not really. A like for like would have been MS jumping in trying to block the Bungie deal because "Sony had sold too many consoles".

What MS is pointing out is just their own inability to compete in the market status quo and their need to attempt to swing the pendulum in a different direction for that reason. A move that if successful would make them more competitive. Likely triggering an iron sharpens iron scenario in the market by forcing a Sony response (just the type of thing the CMA should want).

So sony can point out that it has an inability to compete with cloud so they sold consoles. Is that not the same I'm saying. All I'm saying is that the Cloud advantage isn't due to diverting SoCs in much the same way Sony's console advantage isn't due to diverting SoCs in the other direction.

Sony is free to rely on Amazon, Google, IBM, Oracle etc for their cloud gaming servers. Azure is not essential to cloud gaming. Nvidia GeForce uses different third-party cloud providers for each country.

Which goes back to the point. How would Nintendo and Sony not be disadvantaged in this scenario? They would be incurring licencing and use fees that MS wouldn't be. Remember the point is that MS is saying Azure is in no way a material advantage. Do you agree with this?

Sony had PS Now which was released in 2014. Instead of improving the service by expanding their cloud infrastructure, they instead decided to wind down the service by discontinuing TVs and mobile devices, so when Microsoft released their service, they rapidly overtook them.

So why should MS by held back in Cloud gaming by Sony's incompetence in the cloud gaming market?

Due to cost and economies of scale. They rapidly overtook them due to their multigame subscription service and lower cost for infrastructure. This was easily apparent by country availability.
I also don't see any reason why MS would be held back though by equal terms to an IP.

Because Activision is neither a cloud operator or a customer of significant enough size to change the general cloud landscape. MS Azure will be right where it is today after this deal would close, it's a nothingburger for that division.

Maybe they pickup Activision as a client down the line, but Activision is nowhere near a large enough customer to change the landscape because they chose a different provider.

Nobody is saying it would change the B2B cloud landscape. Activison is a big enough publisher to significantly lessen competition in the cloud gaming and multigame subscription landscape of which MS have a 60% lead already.

 

[RaZoR No1]

That's why I'm skeptical of the streaming model for gaming, at least the way Xbox/MS are going about it. It's one thing to make extra money on the back end with a legacy catalog service but to put all of your eggs in one basket is just crazy. It's going to cost so much money to make content to keep a service like that going I don't know where they'll make it up. Netflix has over 220 million subscribers, they spend roughly $10 billion to $15 billion on content a year, game pass has about 25 million according to MS and they will have spent almost $100 billion if this deal goes through just buying studios in the last 5 years, that doesn't cover the cost of actually making the games etc. It takes a lot longer to make a single game than it does to make several seasons of a tv show.

One thing to keep in mind.
It is easier to make money with gamey than with movies.
The games are "free" on gamepass, but the MTX or DLCs are not.
People are more trigger happy to buy a DLC or invest in MTX in a free game. Be it for just supporting the devs or just buying a skin etc.

MS is betting on this case

 

[Banjo64]

Can't believe that's an actual response from MS's legal team. Reads like the ramblings of a fanboy.

 

[Banjo64]

Maybe they could get basic facts correct instead of being one sided. I have zero issues if the deal is killed if sony has to agree to no more money hats of any major studio. And sony has to give up exclusive content in COD since as Sony says COD is everything to the existence of a home console. Can't have it both ways let sony use its dominant positioning lead to advantages if Microsoft can't use strengths to its advantage.

http://[URL]https://www.cinelinx.co...sins-creed-origins-and-more-added-to-ps-plus/

[/URL]

That was a deal struck with an independent Zenimax, not Microsoft, and everyone knows it.

 

[12Dannu123]

Again it failed with PS Now. I'm not saying they are a new entrant and nobody is saying they would start from zero. I was refuting the notion that the reason that Azure is better is because "they diverted SoCs" that has nothing to do with bandwith, space, locations and economies of scale.


So sony can point out that it has an inability to compete with cloud so they sold consoles. Is that not the same I'm saying. All I'm saying is that the Cloud advantage isn't due to diverting SoCs in much the same way Sony's console advantage isn't due to diverting SoCs in the other direction.


Which goes back to the point. How would Nintendo and Sony not be disadvantaged in this scenario? They would be incurring licencing and use fees that MS wouldn't be. Remember the point is that MS is saying Azure is in no way a material advantage. Do you agree with this?


Due to cost and economies of scale. They rapidly overtook them due to their multigame subscription service and lower cost for infrastructure. This was easily apparent by country availability.
I also don't see any reason why MS would be held back though by equal terms to an IP.


Nobody is saying it would change the B2B cloud landscape. Activison is a big enough publisher to significantly lessen competition in the cloud gaming and multigame subscription landscape of which MS have a 60% lead already.

Of course, Nintendo and Sony are naturally disadvantaged.... Same with Steam, Epic, Nvidia, Amazon and even Microsoft. Every company has disadvantages in the cloud gaming space. Instead of those companies accepting their fate of irrelevance, they accept their disadvantages and try to adapt. It's not a regulator's problem that Nintendo or Sony are disadvantaged; the market shouldn't be held back because of them. If Sony and Nintendo became irrelevant because of cloud gaming, it's because the free market has decided and because they failed to adapt.

 

[DenchDeckard]

I remember when we used to say Sony had ps now first and gake pass is an evolution of that with x cloud. Now Sony can't compete even though they were the first to offer streaming....

...can someone explain how they can't compete with streaming?.......is it because their offer isn't goof enough and microsofts competition may improve their service and ultimately our options and offering?

 

[Three]

Of course, Nintendo and Sony are naturally disadvantaged.... Same with Steam, Epic, Nvidia, Amazon and even Microsoft. Every company has disadvantages in the cloud gaming space. Instead of those companies accepting their fate of irrelevance, they accept their disadvantages and try to adapt. It's not a regulator's problem that Nintendo or Sony are disadvantaged; the market shouldn't be held back because of them. If Sony and Nintendo became irrelevant because of cloud gaming, it's because the free market has decided and because they failed to adapt.

That's all well and good with your theory of a free market and companies accepting their fate of irrelevance but it does not take away from the fact that MS disingenuously told the CMA they have no material advantage in cloud.

when I raised the point that Phil made a contradictory comment 2 yrs ago, that they absolutely do have an advantage to the point where he sees Nintendo and Sony irrelevant as competitors people here made the argument that Phil's statement was talking nonsense to press and Sony and Nintendo are not disadvantaged at all because Sony have PS Now, they just have to redirect SoCs or something.

Your philosophy seems to be that they absolutely have an advantage but so what, the free market would decide competitors doom. Fair enough but the free market has anticompetition laws and regulators. There is nothing stopping or holding back MS cloud gaming either, nothing from having those IPs available on equal terms. It's obviously the fact that this effects competition that has them under investigation. Ultimately the regulators decide and it isn't just the wild west.

 

[DenchDeckard]

That's all well and good with your theory of a free market and companies accepting their fate of irrelevance but it does not take away from the fact that MS disingenuously told the CMA they have no material advantage in cloud.

when I raised the point that Phil made a contradictory comment 2 yrs ago, that they absolutely do have an advantage to the point where he sees Nintendo and Sony irrelevant as competitors people here made the argument that Phil's statement was talking nonsense to press and Sony and Nintendo are not disadvantaged at all because Sony have PS Now, they just have to redirect SoCs or something.

Your philosophy seems to be that they absolutely have an advantage but so what, the free market would decide competitors doom. Fair enough but the free market has anticompetition laws and regulators. There is nothing stopping or holding back MS cloud gaming either, nothing from having those IPs available on equal terms. It's obviously the fact that this effects competition that has them under investigation. Ultimately the regulators decide and it isn't just the wild west.

What are the facts? A business statement to the public where you can fluff up your product and features or a legal statement in the court of law.

It's like we should be attacking Mark Cerny and suing him for saying games will be developed differently and instantly loading areas as you turn the camera never needing games that were made like before....and all evidence we have is the same old remakes and cross gen games with nothing next gen apart from the usual higher quality textures etc.

It's called marketing fluff, and Phil Spencer is allowed to say in response to a journalists questions what he believes are the benefits of his company.

If Sony wants to succeed in cloud they can step up and do so. Or are you in belief that they can't compete with Microsoft?

 

[phil_t98]

It wasn't for the exclusive content bro.

It was because Sony double down on First Party Productions. Not relying on Third Party deals like MS did on the 360, not investing on First Party and pivoting towards kinect.

so by your own admission Sony don't need Call of duty then and other Activision franchises, it kinda negates a lot of your own arguments on here

 

[Three]

What are the facts? A business statement to the public where you can fluff up your product and features or a legal statement in the court of law.

I think MS are being fast and loose with their responses to the CMA to the point of being somewhat dishonest.

It's like we should be attacking Mark Cerny and suing him for saying games will be developed differently and instantly loading areas as you turn the camera never needing games that were made like before....and all evidence we have is the same old remakes and cross gen games with nothing next gen apart from the usual higher quality textures etc.

It's called marketing fluff, and Phil Spencer is allowed to say in response to a journalists questions what he believes are the benefits of his company.

Telling an interviewer that Sony and Nintendo are not your main competitors isn't sellling your product or its virtues. I'm sure in a court Sony wouldn't say SSD is actually not a material advantage to game development for example. They would sing the same tune. MS has resorted to dishonest self deprecation as a defence to the CMA.

If Sony wants to succeed in cloud they can step up and do so. Or are you in belief that they can't compete with Microsoft?

I'm of the belief that MS are severely downplaying their advantages in cloud to the CMA. I do believe that MS has efficacy and efficiency that cannot be matched by Sony and Nintendo ever. That it is actually more costly for new entrants to cloud than it is incumbents contrary to what you believe.

I also believe they are severely downplaying the CMAs concerns about content access for cloud gaming competitors. This in light of one such competitor being foreclosed.

 

[phil_t98]

I think MS are being fast and loose with their responses to the CMA to the point of being somewhat dishonest.


Telling an interviewer that Sony and Nintendo are not your main competitors isn't sellling your product or its virtues. I'm sure in a court Sony wouldn't say SSD is actually not a material advantage to game development for example. They would sing the same tune. MS has resorted to dishonest self deprecation as a defence to the CMA.


I'm of the belief that MS are severely downplaying their advantages in cloud to the CMA. I do believe that MS has efficacy and efficiency that cannot be matched by Sony and Nintendo ever. That it is actually more costly for new entrants to cloud than it is incumbents contrary to what you believe.

I also believe they are severely downplaying the CMAs concerns about content access for cloud gaming competitors. This in light of one such competitor being foreclosed.

where are they being dishonest?

 

[TheGodfather07]

Call of Duty will remain multiplat though.

How do you know this?

 

[Nothing1234]

Since the Transaction was announced, Sony has acquired several game studios—including Bungie, developer of the popular online game Destiny 2, Haven Studios, Lasengle and Savage Games—and a minority interest in From Software, the developer of the biggest game of 2022, Elden Ring (among other hit games). This complements Sony's existing minority shareholding in Epic Games, publisher of Fortnite, strong first-party game catalogue and extensive portfolio of exclusive arrangements with third-party publishers. There were over 280 exclusive first and third-party titles on PlayStation in 2021, nearly five times as many as on Xbox

This is a laughable paragraph to read. The money on the table for those investments is less than Zenimax. Bringing up Minority investment too.

 

[Banjo64]

How do you know this?

You didn't read the small print.

*maybe, for 3 years at least? We'll see.

 

[Three]

where are they being dishonest?

"Microsoft submitted that having Azure does not give it a material advantage that it can leverage to improve its gaming offering"

Their other response too I think is glossing over the CMAs concern. they downplay the importance of content to suggest that no harm can be caused when I'm sure they know that "content is king":

"Second, the CMA has concerns that Microsoft may use Activision Blizzard
content either alone or in combination with its wider "ecosystem" to out-compete rivals such as
Google, Amazon and Nvidia. In a novel theory of harm unsupported by precedent, economic
literature or the evidence, the CMA alleges that a potential increase in network effects and barriers
to entry—without evidence or quantification of any effect—is sufficient to foreclose major
technology companies from cloud gaming services."

This after one named competitor just foreclosed.

 

[Three]

This is a laughable paragraph to read. The money on the table for those investments is less than Zenimax. Bringing up Minority investment too.

They might have at least some point with the small studio aquisitions but the Fortnite and From Software minority investment mentions are just completely disingenuous to this Activision purchase and content control.