UK Blocks Microsoft’s $69B Activision Deal

https://www.bloomberg.com/news/articles/2023-04-26/microsoft-s-69-billion-activision-deal-blocked-by-uk-watchdog

by jmsflknr • 3 years ago

624 563 3 years ago

GalenErso4• 3 years ago

IANAL, but why would it be within the UK's authority to block a merger between two US-based entities? Could, I don't know, Angola or India block similar mergers? Does every country have to approve, or at least not disapprove?

skrebbel• 3 years ago

I think the logic is that they can’t stop the merger, but they can stop the resulting company from doing business in the UK. Angola can do the same but possibly the resulting company will just ¯\_(ツ)_/¯ and move on. And possibly not so much with India or the UK, which are much bigger markets for these companies.

GalenErso4• 3 years ago

Given Microsoft's and Activision's respective dominance in their markets, Microsoft could ignore the regulators and keep doing business in the country.

The British economy cannot work without Windows PCs, the Office suite, and Azure and OneDrive. And banning Microsoft and Activision's games would piss off half of the under 30 crowd, and by proxy, their parents. It would also be unprecedented for any country to do that.

johneth3• 3 years ago

Microsoft and Activision both have assets in the UK, both sell products and services in the UK, and so the UK has a right to regulate their activity in the UK market.

Similar situation to other jurisdictions (EU, China, India, etc.)

oneeyedpigeon3• 3 years ago

So the UK cannot stop the takeover, but it can — of course — block Microsoft from carrying out any business in the UK — and that's, effectively, what's happening here?

Mindwipe2• 3 years ago

They can block the companies from trading in that country ultimately if the merger happens.

Could Microsoft Activision in theory pull out of the entire UK market and still merge (not just gaming, stop selling Office in the UK for example)? Yes. Will they? Absolutely not. There are significant chunks of Microsoft shareholders who don't want to do this deal in the first place and they certainly aren't going to torch the profitable bits of Microsoft for the gaming division, which has terrible financial performance.

ornitorrincos• 3 years ago

When companies are so big that operate in multitude of markets, yes, and depending on how many and the size of those disapproving the merger gets cancelled or parts of the business split, accommodations for those disapproving and so on.

Which is why such mergers take a long time.

Now, being both based in the US, the US could say no and it would not happen and no need for any other regulator to consider the merger.

rsynnott• 3 years ago

In practice, if you're a multinational, doing a big merger, you'll want approval from authorities in at least the US and EU, probably UK (their regulators tend to behave similarly to the EU ones anyway) and maybe China if you do business there.

Strictly speaking, _none_ of the regulators can individually stop a merger (even if it's the home country regulator, the multinational can just redomicile) but in practice they all have a veto, because the multinational wants to be allowed do business everywhere.

justinclift2• 3 years ago

This is good news. :)

bluescrn4• 3 years ago

Is it?

Putting MS in charge might have saved Blizzard from Activision. Maybe they'd have brought WoW to Xbox, or done something new with the Starcraft IP. Perhaps even a new Blizzard MMO...

pbalcer2• 3 years ago

But would have prevented many players from actually enjoying Blizzard games. Personally, I am not interested in purchasing an Xbox or installing Windows on my PC, even if the merger is finalized.

Reason0774• 3 years ago

Activision selling Blizzard to Microsoft would be a deal I could get behind!

On the other hand, as a Mac gamer, maybe it wouldn't be so great? Blizzard have been great at Mac support, with all their titles - except Overwatch - being available on Mac since day 1. But Microsoft hardly releases anything for Mac now days.

tallanvor2• 3 years ago

It isn't, though, when they haven't been blocking Sony from making significant purchases.

justinclift2• 3 years ago

Well, 1/2 is better than 0/2. At least in this context.

Maybe they'll get Sony sorted out too at some point.

flohofwoe3• 3 years ago

What significant purchases has Sony done though in the gaming space? IIRC it was mostly smaller game development studios, not the (until quite recently at least) largest game publisher in the world.

spookie3• 3 years ago

I understand your concerns in the video game industry landscape, even though I may add that Microsoft may just have been buying out many more studios in recent years.

However, I don't believe that tto be the bigger issue. Let's look at this from a bigger perspective: Microsoft is much bigger than Sony. The western world is very much dependent on this giant. Should it have even more power?

jeppester• 3 years ago

Thats because Sony's most significant purchase (Bungie) is completely insignificant compared to ActiBlizz. It is also much smaller than Bethesda, which MS acquired without much scrutiny, and before the Bungie deal.

When you look at the numbers there is just no way to make the conclusion that Sony are "just as bad" when it come to aquisitions.

I am however absolutely in favor of Sony getting blocked, should they for instance plan to acquire EA, Ubisoft, Rockstar etc.

samwillis2• 3 years ago

Other thread and link to the government release here:

https://news.ycombinator.com/item?id=35711913

https://www.gov.uk/government/news/microsoft-activision-deal...

crims0n4• 3 years ago

| Britain’s antitrust watchdog vetoed the gaming industry’s biggest ever deal saying it would harm competition in cloud gaming

Cloud gaming? Really? Seems a bit tone deaf. Is the CMA known for not understanding the markets they regulate?

johneth3• 3 years ago

Cloud gaming is a growing market – they're preventing the deal on the hypothesis that it will give Microsoft a huge advantage in a growing market.

crims0n4• 3 years ago

In my opinion, it is only growing because it is bundled with popular subscription services like Game Pass. I don't think the sector has it's own legs to stand on, but time will tell.

tsgagnon• 3 years ago

Cloud gaming is a growing market – they're preventing the deal on the hypothesis that it will give Microsoft a huge advantage in a growing market.

How does any large company build into a new/growing market without having a "huge advantage"? Do they have to wait until the market is matured from smaller companies before they can get into that market?

jarym• 3 years ago

They are known for it but you've heard the old saying... even a broken clock is right twice a day.

pbalcer2• 3 years ago

By cloud gaming they probably mean things like Playstation Plus and Xbox Game Pass, because, in the higher tiers, they come bundled with streaming access to the games in the service.

jerrygenser2• 3 years ago

Why is this tone deaf? A lot of aaa gaming today could be considered cloud gaming -- although I'm not sure of the exact definition.

Consider dota 2 -- it's a service entirely on the cloud continuously updated.

The list goes on with in terms of aaa games offered by either company where the main offering is actually multiplayer.

crims0n4• 3 years ago

Typically it means gaming workloads rendered in the cloud, which artificially appears popular at the moment because it comes bundled with game subscription services such as Playstation Plus and Xbox Game Pass - but as Stadia's failure would seem to indicate, nobody wants to pay for a dedicated cloud gaming service. Doesn't seem like a profitable sector of the market.

Nonetheless, my point was that cloud gaming is probably the least concerning part of the merger.

rwalle3• 3 years ago

Eh, most people looking at this don't consider dota 2 in the same bucket as the cloud gaming concerned here. It means Assassin's Creed played on Geforce Now or Forza Horizon played on Xbox Game Pass. My very loose definition is that these are games that usually have a single-player mode are originally intended to be played on a game console, but are run and rendered on cloud services and then transmitted to user (of course you can find lots of exceptions). Dota 2, by contrast, is an "online" game, more specifically MOBA -- this is on Wikipedia: https://en.m.wikipedia.org/wiki/Dota_2

doikor3• 3 years ago

In this context it means streaming the game from cloud (xCloud, GeForce NOW, Luna, etc)

OJFord• 3 years ago

What's wrong with that?

flohofwoe3• 3 years ago

I guess the Xbox Game Pass subscription service can be considered a 'cloud gaming' service, and IIRC most concerns were about CoD vs Game Pass (e.g. if a new CoD game is available on Game Pass on day one of release that would indeed be an unfair advantage).

crims0n4• 3 years ago

Fair assessment, but I still think that is tangentially related at best - and only relevant to the cloud due to a bundled subscription.

newsclues6• 3 years ago

"e.g. if a new CoD game is available on Game Pass on day one of release that would indeed be an unfair advantage"

Timed exclusives are not an unfair advantage, both Sony and MS have bought or paid for timed (or perpetual) exclusive games for their platforms.

Are we going to make a rule that bans all exclusive games, and force developers to create ports for all system that launch on the same day?

panick21_2• 3 years ago

Cloud means internet.

nottorp4• 3 years ago

I would have thought the same, but then i tried GeForce Now.

It works Just Fine(tm) (with fiber internet) but guess what's missing: a lot of AAA titles.

So yes, there's a problem with cloud gaming.

Not sure if it's mine or theirs though. I don't have a gaming PC right now, only a PS5. Since we're speaking of ActiBlizzard, i maybe would try Diablo 4 if it were available on GeForce Now. But it isn't and I won't.

Incidentally, I doubt there will be a console Diablo 4 for the PS5 either. They were too far into the acquisition process to not dump non Microsoft platforms.

PretzelPirate3• 3 years ago

Didn't Microsoft agree that Nvidia could stream ABK games on GeForce Now if the deal closed? It seems like it could have helped GeForce Now grow.

mdemare• 3 years ago

Incidentally, I doubt there will be a console Diablo 4 for the PS5 either.

https://www.playstation.com/en-us/games/diablo-iv/

justeleblanc4• 3 years ago

You can read their 418 pages report here and see if they understand what they're about: https://assets.publishing.service.gov.uk/media/644939aa529ed... Section 8, "Theory of harm 2: Vertical effects in cloud gaming services", starts on page 192 and contains 442 paragraphs. The conclusion is about two pages long, I encourage you to read it.

nonethewiser12• 3 years ago

What is your opinion on that text?

agd2• 3 years ago

I'm glad with this decision. Not sure the exact logic makes sense, but in general the top US tech companies (Google, Amazon, MS, Meta, Apple) are too big. They wield huge power and can snuff out entire startup sectors with loss-leading products.

The argument is always 'but we don't have a monopoly in this artificially small sector X', however I don't think that argument is the one we should be looking at when the companies involved are $1trillion+.

Can we prove exact consumer harm in each case? No. However, I think most people can accept that there's a risk to consumers, markets, and democracy if companies become too big.

Edit. Seeing a lot of comments saying UK couldn't function without Microsoft which kind of supports my point.

markus_zhang2• 3 years ago

Sadly we are probably too late now. Need to dissect them into multiple entities (and maybe create more jobs) earlier.

snapcaster4• 3 years ago

What makes you think it's too late?

jerjerjer• 3 years ago

Maybe "artificially large"?

rqtwteye• 3 years ago

Totally agree. These huge companies are terrible for the overall economy, destroy innovation and contribute to inequality.

izacus5• 3 years ago

hey wield huge power and can snuff out entire startup sectors with loss-leading products.

More importantly, they're becoming complacent and lazy, using their legal and financial clout to kill competition, not product improvements.

This is why China is so scary - their companies have started being very competitive to US behemoths which have been buying/killing their competition for decade(s) now.

paganel6• 3 years ago

This is why China is so scary - their companies have started being very competitive

When it comes to tech regulation the Chinese authorities have at least a 2-3 year advantage against the US/UK, notice how the likes of Alibaba and Tencent have been brought (relatively) down compared to what was expected of them 5 years ago.

015a6• 3 years ago

Microsoft is maybe the only big tech organization that feels like they're still actively trying to out-innovate their size. They invested in OpenAI (not acquired; invested) then weeks later made substantial improvements to Bing. They made a concept hardware device 10 years ago (the Courier), then finally made it real (it's not great, but that's beside the point). They're possibly the single largest funder of insanely critical open source software projects; Kubernetes, TypeScript, VSCode, etc. They acquired Github then practically speaking left them alone to continue being a really high quality product, while simultaneously investing in internal direct competitors (Azure DevOps). They released Loop a few weeks ago; now they're going after Notion.

You can argue that they're leveraging M365 and their enterprise contracts to out-innovate smaller competitors like Slack, Notion, etc. Yeah, ok; I don't love it. But I really can't help but feel: At least they're doing it. At least they're releasing new products that don't totally suck. I literally can't think of one thing Google has released in the past five years that left a fingerprint on the world. Facebook is a similar story. Apple is a very different company, but its not dissimilar: M1 was incredible, but if you put that aside (because, really, the past three years has been "M1 Catchup" for them) the iPhone is the same thing it was four years ago, the iPad is the same, the Watch is the same, the software is overwhelmingly the same, I guess they have a new Savings Account (when companies start running out of ideas to innovate, they turn to financial engineering).

Microsoft is a cool company, and I'll die on that hill. I'm not happy with everything they do. I think the entire Windows division leadership needs to be gutted and replaced, and they need to think long and hard about what Windows looks like for the next 10 years (and maybe they're already doing that!). But putting that aside, even considering Microsoft's very light anti-competitiveness, I'd take them over the rest of big tech nowadays. They're mostly just lame ducks.

cubefox5• 3 years ago

Note that Microsoft has an extremely high operating margin of 40%, which indicates insufficient competition. Even Apple has "just" 30%. With all that money laying around, they can just gobble up anything but the biggest fish.

kgwgk4• 3 years ago

Different industries have different margins. Apple and Microsoft are not really comparable businesses.

brookst2• 3 years ago

Wait, what? You expect software companies to have low margins?

Apple's gross margin is about 40% because the marginal cost of hardware is somewhat expensive. Software companies typically gave gross margins of 65% or more, because the marginal cost of software is zero.

This is an odd take.

intelVISA• 3 years ago

I'm all for free market competition etc., although in truth I've never seen it being 'good for innovation' quite as people describe.

The first big player in a space e.g. Atlassian just acquires any competition and guts it. Sure, that's as free market as it gets (ignoring anti-trust?) but I don't see the benefit to the consumer.

Or, at the other end, as a Canadian, UK taxpayer (and many others) your money goes to keep afloat gov't subsidized startups that could never compete in the free market otherwise... is this beneficial as well?

I just write ANSI C so maybe it's all lost on me somewhere.

runako6• 3 years ago

A focus on margins irrespective of industry leads to incorrect analysis. For example, look at Comcast, a company that truly operates as a monopoly/duopoly in most of its markets. It has an operating margin of 7.6%.

On the other hand, Exxon Mobil has an operating margin of nearly 20% despite selling an undifferentiated commodity in a market with many well-capitalized competitors. (They are not the only one: ConocoPhillips also sports an operating margin in the range of 20%.)

The particulars of a market often drive margins more than does the competition.

kypro• 3 years ago

I don't think size is really relevant to the issue at all, it's simply the general anti-competitive practises that size has enabled these companies to pursue as aggressively as needed to crush all competition. What Microsoft is doing with bundling for example is far more destructive to competition than acquisitions.

I think what we need is more nuanced regulation to give smaller competitors room to compete with big tech products, if this were the case then who cares about their size or acquisitions? So long as smaller competitors can always rise and challenge the big players then size is fine since it would just correlate to quality and value, rather than an ability and willingness to crush competition.

The question to be asking is if a practise is unduly restricting competition. Having a market share of 95% is fine in my eyes so long as there is competition.

Hamuko5• 3 years ago

Yeah, I cannot see this merger being a net benefit for consumers. It reads completely like Microsoft just flexing its financial muscles gained entirely from things unrelated to gaming, and using that money to take over the industry in the long-term.

Sure, they did sign on their games with services like Geforce Now for 10 years and bring Call of Duty to Nintendo consoles. However, these all seem like short-term theatre to make everything look nice.

First of all, the reason why Microsoft games were not on Geforce Now was because Microsoft PULLED them from it [1]. And considering that Activision-Blizzard is (allegedly) worth $69 billion, I don't believe that they couldn't bring their games onto Nintendo platforms if they saw a market there. Seems like Microsoft is just making up imaginary markets to be able to say "look at all these people who will get Call of Duty because of US".

[1] https://www.theverge.com/2020/4/20/21228792/nvidia-geforce-n...

Waterluvian• 3 years ago

I don’t think extra large tech companies are uniquely capable of any meaningful innovation. Ie. there’s no benefit to everyone by having them exist at that size.

In fact, I think their size makes them uniquely incapable of innovation. All they can do is push everyone down to stay on top.

lotsofpulp5• 3 years ago

I imagine hardware innovation these days requires huge amounts of money.

Tycho• 3 years ago

Plus, as we saw recently with Twitter, they are massively over staffed and depriving other companies of workers.

passwordoops• 3 years ago

"Seeing a lot of comments saying UK couldn't function without Microsoft"

Too Big to Fail should be recast as Too Big to Exist

somenameforme• 3 years ago

At least in the US it wasn't even about monopolies, but about whether or not a merger would negatively affect competition. [1] But at some point it feels like the FTC simply stopped enforcing its own guidelines, at least when large enough players were involved. Because it's somewhat self evident that the overwhelmingly majority of big corp mergers over the past couple of decades have completely crippled competition.

That said, I think this indirectly feeds off your core point - this 'new direction' of the FTC is almost certainly because these companies have become far too 'influential' owing to their size and power. I think one could even generalize a simple test: "Would the immediate collapse of this company meaningfully imperil the US economy, security, or other significant interests?" If so, that company needs to be split up until the answer is no.

[1] https://www.ftc.gov/advice-guidance/competition-guidance/gui...

fallingknife• 3 years ago

Large tech companies are nothing like banks and have no mechanism to immediately collapse. In fact, the fact that their collapse would imperil the US economy is a 100% guarantee that they won't collapse because it means people are dependent on buying their products.

And if you did break them up, it wouldn't solve the problem at all. Whatever company is in charge of Windows is still going to be critical no matter the size. It depends on the importance of the software product in the tech industry, not the size of the company like it does in banking.

AraceliHarker3• 3 years ago

Have you seen the press release from CMA? They only mention cloud gaming and game pass price increase as the reasons to oppose Microsoft’s acquisition of AB, right?

crazygringo• 3 years ago

but in general the top US tech companies... are too big
I think most people can accept that there's a risk to consumers, markets, and democracy if companies become too big.

I don't think that's true at all. If you want to make an argument that companies are too big, you need some exact logic to support it.

The only solid arguments I'm aware of are specifically regarding banks because of their systemic impact on the economy -- the become "too big to fail" and thereby become a moral hazard situation. Although given the efficiencies of large banks, the solution has become to regulate them more tightly to prevent moral hazards, not to break them up.

But the idea that tech companies are too big doesn't have the same kind of logic behind it, and your assertion that they "snuff out entire startup sectors" doesn't seem to be supported by any evidence. To the contrary, they invest in entire startup sectors and competing top tech companies buy competing startups to supercharge them. Competition is thriving as the big tech firms compete with each other.

In the modern era of Big Tech, consumers seem to be doing great, markets seem to be doing great, and Big Tech's size is probably not even in the top 50 threats to democracy. The effects of social media is surely in the top 5 threats to democracy, but that has nothing whatsoever to do with the size of the company that owns a social network.

orra• 3 years ago

I don't think that's true at all. If you want to make an argument that companies are too big, you need some exact logic to support it.

It's well known that oligopolies are bad for efficient pricing, just like with (though not as extreme as) monopolies.

That's why EU competition law rightly focuses on "significant market power", rather than US competition law which cares little unless there is a literal monopoly. (Currently, the UK retains EU competition law).

agd2• 3 years ago

Competition is thriving as the big tech firms compete with each other.

Thriving competition wouldn't result in super profits year on year.

jpetso• 3 years ago

My big concern with large companies is cross-selling. For the sake of argument, let's assume that Google rightfully won the Internet, Apple rightfully won smartphones, Microsoft rightfully (?) won operating systems, etc.

All of them tried, competition was hot, the market picked a winner.

But what's next is a market distortion. Google uses their front page to push Chrome over Firefox, Apple doesn't care to make any of their other devices (e.g. Watch, HomePod) interoperate with other platforms, Microsoft packs Windows with ads for Office 365, OneDrive, and so on. All of Big Tech is perpetually obsessed with owning platforms as opposed to products, because once you control a platform, it gives you the leverage/"moat" to continue profiting without the corresponding investment into competing fairly. Thriving competition would be to have to compete independently in each market, rather than winning one and then extending that win to other markets by tilting the playing field.

Activision Blizzard falls nicely into this category as it's explicitly designed to gain an edge over Sony in gaming. Cloud gaming or not, it's clear to everyone that the general idea is improve the standing of Xbox products and Windows PCs by using the leverage of CoD as an existing market winner. As opposed to making the platform compete on its own terms. That's a market distortion.

The fact that large companies put large amounts of resources into startups and developing new markets doesn't mean that they compete fairly, or that it's a better outcome for society/consumers than an alternative reality where each product by itself would compete on its own merits, and companies could win markets independently rather than having to sell to existing market leaders for extra leverage.

Brybry• 3 years ago

Big Tech companies have a history of buying smaller tech companies and ending or decreasing the products/services that the smaller companies provided which makes life worse for consumers.

In game development specifically there's a line of successful studios that were devoured and their game franchises destroyed or made creatively poorer.

nine_k3• 3 years ago

When resources of a private company seriously outweigh those of a government, it may become a problem; see "banana republics" [1]. That is, regulations cannot work against a sufficiently overwhelming force.

"Snuffing entire sectors" is unlikely, even though buying and shutting down a potentially viable competitor is not uncommon in the business world. Google in particular bought and eventually closed a number of startups, but, to my mind, it was mostly because they did not happen to be fast enough growing, not to kill competition. There is some research [2] showing that companies do buy other companies to kill a competitor, but this is very far from being the majority of cases.

[1] https://en.wikipedia.org/wiki/Banana_republic#Honduras

[2] https://insights.som.yale.edu/insights/do-companies-buy-comp...

istjohn• 3 years ago

Reducing the number of companies reduces the competition that drives up wages and drives down prices and drives up service and product quality. Consider this: https://fredblog.stlouisfed.org/2018/08/corporate-profits-ve....

rglullis• 3 years ago

consumers seem to be doing great

I want some of that stuff you are smoking.

Vendor lock-in. Planned obsolescence. Common, established features being removed in favor of proprietary protocols or connectors. Data privacy violations.

All of that because we like free/cheap stuff. Saying Big Tech is good to consumers is like saying Big Pharma is good because their opiods are chemically pure.

015a6• 3 years ago

Its extremely frustrating how we let the tech companies get to be this large, such that now we really have to consider blocking every acquisition, even though this one in particular I think wouldn't be all that bad and may actually be a positive for consumers. Activision is an unusually cruel and extremely horrible company, whereas the Xbox Division of Microsoft has been one of maybe only a couple "great" stewards of the gaming industry for consumers (Epic is also a great company, but beyond those two when it comes to major developers/publishers there's far more bad than good). I'm genuinely of the opinion that all of Xbox, Activision, and their customers will be worse-off without this deal.

This is a HackerNews Arm Chair Quarterbacking Stretch, but I think a really positive move for Microsoft would be to spin-off Xbox into a separate company. I can't imagine the division is all that profitable; its grown to confer practically zero positive network effects for Microsoft's other businesses. Culturally its got to be the weirdest thing Microsoft does nowadays. This AB deal likely single-handedly increases the valuation of the division by, jeeze, 50%? Maybe more.

mikepurvis• 3 years ago

I feel like with Gamepass and all their exclusives being day 1 on Windows as well, there's probably more crossover nowadays than there has been in years, but overall you're right that spinning out Xbox entirely would make a lot of sense.

zopppo• 3 years ago

Its extremely frustrating how we let the tech companies get to be this large, such that now we really have to consider blocking every acquisition, even though this one in particular I think wouldn't be all that bad and may actually be a positive for consumers.

As an avid world of warcraft player, the community as a whole has been hoping the merger goes through for exactly this reason. Activision has seemingly forced through a lot of bad changes over the years to try wring out as much money as they can.

dmonitor3• 3 years ago

Xbox is loss leading hard for Microsoft right now. Profits are down, console sales are down, and things on the horizon are looking not too great. If Xbox spun off, they’d go out of business within the decade because there’s no reason to own one besides taking advantage of Microsoft’s net-negative gaming subscription.

mustacheemperor4• 3 years ago

has been one of maybe only a couple "great" stewards of the gaming industry for consumers

I'm not sure I'd give them much credit on this, since MS/Xbox hasn't achieved much at all in the gaming industry over recent years. Maybe there's not much egregious evil there a-la Activision's leadership scandals, but the track record is not great.

As a gaming industry consumer who's been playing Microsoft consoles and games my entire life, MS has recently:

- Ruined the Halo franchise

- Stymied the current console gen with the Series S' weak memory capabilities

- Acquired multiple beloved studios and released little to nothing over 5+ years, with their highest profile release being Starfield, the game Bethesda was already developing when MS bought them and made it a platform exclusive

- Edit: Forgot trying to turn the Xbox One into an always-online TV set-top box

Spinning off Xbox might be a good idea, if it's MS' senior leadership that keeps hamstringing their success. Because if the Activision acquisition proceeded like their previous studio acquisitions, we would see one or two Activision games release in the next decade, along with maybe a mediocre COD TV show.

waboremo4• 3 years ago

Xbox is Microsoft's only consumer division that has substantial revenue. Even consumer office brings in half of what Xbox does.

Microsoft is making the right moves here slowly shifting away from hardware (no profit) into software in the gaming space, but it's going to take some more time to do so.

Potentially it makes more sense to drop xcloud (huge black hole for the next ~10 years), to adhere to CMA's claims of them dominating the cloud gaming space, so they can continue with Game Pass (the part that actually matters for Xbox).

stonemetal12• 3 years ago

Games aren't bad for MS, It brings in more than 3 billion a quarter.

How many times have you seen I do most of my stuff on Linux but I still boot in to windows for games. An independent xbox would be less likely to use Windows for their OS.

pb75• 3 years ago

Epic is also a great company

No, it's not. It does the exact same shit that Activision does except it targets an even younger more vulnerable demographic. Did you forget about this? https://www.ftc.gov/business-guidance/blog/2022/12/245-milli...

giantg2• 3 years ago

"Its extremely frustrating how we let the tech companies get to be this large,"

With how quickly tech changes and the risks involved, companies have to find multiple revenue streams if they want to survive. Pretty much every startup dream is to one day become a huge company.

iepathos• 3 years ago

spin-off Xbox into a separate company. I can't imagine the division is all that profitable

only like $5 billion in annual revenue, doubt they'll want to let that go for no reason.

toyg• 3 years ago

Activision is an unusually cruel and extremely horrible company, whereas the Xbox Division

Even if this were true, there is no guarantee that the acquiring culture will actually be imposed on the acquired. In fact it's often the opposite, with the acquired "infecting" the parent company - particularly when the acquired comes with a large headcount.

7952• 3 years ago

I guess it could reduce the risk of another platform creating network effects.

munificent• 3 years ago

The solution to Activision being horrible shouldn't be to let it get eaten by a marginally less horrible even more giant company.

It should be to break it into smaller pieces so that consumers have the flexibility to avoid the more toxic segments of the company and the market can decide whether their bad behavior matters or not.

ldoughty• 3 years ago

Is part of what makes companies like this horrible the fact they WANT to get bought?

The one company I have in depth knowledge of going through an acquisition tried to drive employees away where possible, and fire others, down to a skeleton crew of overworked disgruntled employees because it makes them look REALLY good in the short term for being acquired.

If you couldn't count on acquisitions by larger companies being approved easily, the only other way to game companies can generate profit is by maintaining current games (at least to being playable, without terrible reviews from bugs), and /or develop new games...

kartayyar• 3 years ago

In other words, a shallow big == bad without taking specfic context into consideration?

Imo I want competition and choice as a consumer. This basically sets things up so that consoles become a non competitive market because Xbox lacks exclusives that Sony has.

ronnier• 3 years ago

This will make it easier for large Chinese companies to rule over you that can "snuff out entire startup sectors with loss-leading products".

pyrale2• 3 years ago

Edit. Seeing a lot of comments saying UK couldn't function without Microsoft which kind of supports my point.

The replies advocating for Microsoft to strong-arm a country into submission are chilling.

gigel822• 3 years ago

In general I agree with you; but in this particular case, this is a "win" for Sony who can continue with their vast array of exclusives unhindered, and a "loss" for gaming customers due to that.

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that_guy_iain• 3 years ago

My personal opinion it it really stops Microsoft being able to fully compete with Sony. Sony did a good job of buying up game studios to make PlayStation exclusive games. Microsoft tries to get into the game and it appears at first glance they're prevented.

adql• 3 years ago

A lot of people want to see it purely on hope that under MS Actiblizzard will be less shit of a company. Which is... optimistic.

AlexandrB6• 3 years ago

It's very optimistic. Even under new leadership the creative talent that Blizzard has lost over the last 10 years is not coming back. Microsoft themselves aren't particularly good at picking talent either - see the Halo Infinite/343 Studios debacle. Maybe there would be less of a push for player-hostile monetization, but I wouldn't count on it. The people who made and executed those decisions at Activision/Blizzard aren't magically going away either.

bgorman• 3 years ago

The logic doesn't make sense, and Microsoft also doesn't have a market power advantage here.

The Xbox Series X/S has been a bit of a boondoggle and Sony is vastly outselling Microsoft this generation. Not to mention the existence of Nintendo, Valve and other PC gaming stores. The argument that this would weaken competition for gaming consoles is laughable.

Sony and Nintendo have exclusive games to gain an advantage. Now an American company wants to do the same thing, and they are blocked.

American companies are being put at a competitive disadvantage due to ridiculous anti-trust interpretations. Basically the CMA and FTC are trying to prevent any American tech company from acquiring another tech company for political points at home. How did we get to this point?

It is extremely dangerous to throw logic out the window, as this results in bureaucrats picking winners and losers.

traceroute66• 3 years ago

Edit. Seeing a lot of comments saying UK couldn't function without Microsoft which kind of supports my point.

Yup.

The NHS (UK National Health Service) is Microsoft's biggest single account for Office/Office365 and probably other stuff too.

So I guess add on other parts of UK gov and yeah, "couldn't function without Microsoft" is not far from the truth.

I mean, some might argue that the UK government hasn't functioned much since 2016/Brexit anyway, but that's another story. :)

bloqs2• 3 years ago

Reminds me of the NHS Linux effort, that the CTO faked interest in, then used as a bartering stick to lower the M365 subscription price, then ghosted the NHS Linux devs

zitterbewegung• 3 years ago

This is especially pertinent to Microsoft which wants video games for their own hardware while Sony might have exclusives Destiny 2 is still on all platforms. Not to say that Sony is a perfect example in every situation and they do have exclusives.

bloqs2• 3 years ago

Sony have been absolutely pathetic in regards to exclusivity agreements. Play either of the last Call of Duty games on a Playstation, you get and entire gamemode, permanent xp boosts, content unavailable for other platforms, or content available early. Insane they could even begin to suggest that they aren't guilty of the same for years.

throwaway675309• 3 years ago

This. This is exactly why I am ideologically opposed to working for a FAANG. You can do more than just avoiding purchasing their products - giving them your labor and resources allows these companies to gain even more power and influence than they already have.

29athrowaway• 3 years ago

So what would be better then? Baidu, Alibaba, Tencent, Huawei, Bytedance?

At least FB doesn't promote stupid challenges that send people to the hospital with cracked skulls like TikTok.

cabalamat• 3 years ago

If UK couldn't function without Microsoft, that's reason for the UK to create its own ICT industries so that its ICT sector isn't controlled by foreigners.

pabs3• 3 years ago

Perhaps it is time to split up some of these tech companies? Lots of their ecosystems are potentially separable into different companies.

gofreddygo• 3 years ago

I believe all this circus needs is just one big corp poking one big enough government to trigger this super reaction towards entropy.

Why? Cz there's $$$ to be had in the fallout for said govt and other competing big corps. And then the next govt follows suit and voila - a super reaction chain !

dzonga• 3 years ago

maybe the CMA worded it wrongly in terms of cloud gaming.

but the gist of it remains the same. Microsoft wants to weaken Sony's exclusive moat by buying their own big property to make it an exclusive down the line, thereby either increasing the value proposition of Game Pass, or Xbox cloud gaming anywhere.

by now Microsoft already knows they're not going to catch up to Sony or Nintendo in terms of console sales.

game pass is probably one of the best deals in entertainment though, and by that I mean all forms of entertainment whether sports, film, music etc.

samwillis2• 3 years ago

It's important to take this decision in the context of the CMA's wider investigation into "Mobile browsers and cloud gaming"

https://www.gov.uk/cma-cases/mobile-browsers-and-cloud-gamin...

They intended to investigate the cloud/mobile gaming and App Stores, plus look at mobile browser competition (or lack their of on iOS).

Sadly Apple, clearly feeling threatened by it, forced it to be stopped on a fairly stupid technicality. Hopefully they will be able to relaunch it soon.

https://www.reuters.com/technology/apple-wins-appeal-against...

If this decision re Microsoft+Activision is anything to go by, the wider investigation and potential regulation coming from it could have been very impactful.

jerrygenser2• 3 years ago

Will this prevent the merger from happening in other markets too?

jalev2• 3 years ago

No. It's only relevant in the UK. If other regulators want to go forward with it then they can.

paol3• 3 years ago

That's not how it works. Companies with global presence (like these 2) need to have regulatory permission in every jurisdiction where they operate. If a jurisdiction forbids the merger then they would no longer be able to operate there.

Consequently any regulator in charge of a sufficiently important market has de-facto veto power globally.

drumhead4• 3 years ago

No, but the EU and US regulators will look at the Uk's reasoning for blocking the bid and it may influence their own decisions.

paol3• 3 years ago

Thank $deity someone did. Microsoft owning both the biggest platforms and the biggest publishers is a glaring example of what anti-trust regulations should exist to prevent.

Every anti-trust regulator in the world would have auto-blocked the merger after 5 minutes of examining the situation. Unfortunately actual anti-trust enforcement seems to have fallen entirely out of fashion.

ricardobayes6• 3 years ago

Do you think this will actually have a good outcome for UK gamers? I can definitely foresee UK gamers not having access to products.

joosters• 3 years ago

No-one is going to stop selling games in the UK, they would be leaving money on the table if they did.

Instead, they might move development away from the UK. Bad for developers, sure.

tombert• 3 years ago

I think I agree, but would this logic apply to Nintendo in the mid-80's? I think that (at least in the United States), the NES was probably the biggest game console, and Nintendo was almost certainly the biggest publisher for it.

rprospero• 3 years ago

Nintendo was taken to court and forced to pay out over anti-competitive business practices. Granted, the specific charge was price fixing and the settlement of sending coupons to consumers was ridiculous, but I could imagine an FTC that wasn’t asleep at the wheel who split the company’s hardware and software divisions.

edgyquant7• 3 years ago

No, the industry was new and not worth close to what it is now. Plus a lot different, arcades we’re still pretty dominate at that time.

reaperducer2• 3 years ago

Maybe not at the beginning because home video games were new and different, and there was plenty of competition from Sega and Atari and others.

But in a related note, Atari was forced to create a new company to publish some of its coin-op games to fend off monopoly accusations. (It later turned out to just be a shell game.)

MikusR5• 3 years ago

Microsoft is 3rd place on consoles, non-existent on pc, non-existent on mobile. And this deal would have moved it to 3rd place in publishing.

paol3• 3 years ago

non-existent on pc

You may want to think a little longer on that ;)

snapcaster4• 3 years ago

As a MSFT shareholder I agree. As a citizen of the world I think it's fine to stop multi trillion dollar companies from expanding anymore regardless of impact and I think most reasonable people would agree

Hamuko5• 3 years ago

non-existent on pc

What's the share of PC gaming on Microsoft Windows vs. not on Microsoft Windows?

drumhead4• 3 years ago

non-existent on pc

Hmmmmmmmm........

reaperducer2• 3 years ago

Thank $deity someone did. Microsoft owning both the biggest platforms and the biggest publishers is a glaring example of what anti-trust regulations should exist to prevent.

I can't speak for the UK, but in the US, there are plenty of industries where the creator of a product is not also allowed to be the distributor of the product.

Movie companies aren't allowed to own theaters. In most states, auto makers aren't allowed to own dealerships. Beer companies aren't allowed to own bars. The list goes on.

anticensor• 3 years ago

Software is not one of those industries.

jxi• 3 years ago

I'm just glad Activision doesn't get paid out. What a terrible company it has become. Really wish they never acquired Blizzard.

javajosh• 3 years ago

And what a strange end for the mighty Blizzard. I wonder what the owners of Blizzard thought would happen when they sold in 2008. I bet it even mattered to them at that time, at least a little.

nottorp4• 3 years ago

Did it? I don't think Blizzard has ever been in financial trouble, so they sold it just for more money. And we all know the old Blizzard is completely dead now.

segasaturn9• 3 years ago

Yeah Blizzard is doomed because of this block. Activision doesn't give a rip about Blizzard's IPs (there's a running joke in the StarCraft 2 community that the game is being maintained by a single unpaid intern). Sad day especially for the StarCraft 2 community who were hopeful about the acquisition saving their beloved series.

slavik81• 3 years ago

In 2008, Blizzard was owned by Vivendi Universal, which is a giant conglomerate that owns a seemingly random assortment of media properties.

Vivendi has gone through so many mergers, acquisitions and divestitures over the years that I find it hard to imagine them having a sentimental attachment to a particular business unit.

Blizzard has pretty much always just been one part of a larger organization. It was sold in the 90s.

mattferderer• 3 years ago

This might be a bad time to tell you that they might be getting paid out in terms of $2.5 - 3 billion for the deal falling through.

jokoon2• 3 years ago

I wonder what are the actors who invest in small indie games. It seems like the indie game market is quite a complex, with a lot of bad games, but still a few games of high quality who deserve so much more attention.

I really wish there were investors who could better invest in the indie game market and at least take more risks and burn more cash, even if it's socially questionable.

Every respectable gamer knows, deep in his heart, that the AAA game business is a horror show.

I restrict myself to indie games and I have more and more trouble finding a game that I can actually like and spend time with, it's hard to say if that's because I'm old or if I have very specific tastes or if I set the bar too high.

There are a lot of developers out there who are ready to make games, yet it seems the market rarely lets them. Of course, quality matters, but the top reason I want to make games, is because I cannot find games I can enjoy, would they AAA or indie.

Important note: I dislike capitalism.

jxf• 3 years ago

I really wish there were investors who could better invest in the indie game market and at least take more risks and burn more cash, even if it's socially questionable.

The challenge is that many games are labors of love that are fantastically unprofitable. AAA games with microtransactions are unpopular but very lucrative.

andsoitis• 3 years ago

unpopular but very lucrative.

How do you resolve that oxymoron?

Dudeman112• 3 years ago

Whenever people mention the awful state of the industry, I feel an urge to point out that the only thing that matters in a capitalist society is what the consumer votes for with their wallet

Ubisoft is far from bankrupt. EA is far from bankrupt. All the microtransactions, all the stupid "big open world" bollocks, all mind numbing grind-a-thons, the sheer creative bankruptcy that AAA games often show... they are what people consistently vote for, every year

In the last month, the last Carl On Duty has made more money than Ultrakill ever will. By a few orders of magnitude. And the same will happen for the next one

If gamers wanted quality, they should have spent their money accordingly instead of consistently buying shit

jokoon2• 3 years ago

Profitability cannot be the only motive. A small fraction of those profits could be invested in indie games to diversify and just have "better games", not just profits.

Stop using the devil's advocate at every occasion.

ricardobayes6• 3 years ago

While morally I can agree with it, from a pragmatic and gaming perspective I think this is terrible since it will 100% lead to some games not being available in the UK.

lunchladydoris• 3 years ago

Why? Revenge? I would think that all parties involved prefer money over revenge.

mrkwse• 3 years ago

Well it depends on how Microsoft's accountants manage the maths:

Hypothetically, if MS + Activision - UK > MS + UK - Activision (assuming it's only blocked in UK), it's plausible that Microsoft withdraws from UK to pursue its business with the merger everywhere else. The UK is a decent sized market, but it's far from the biggest.

ricardobayes6• 3 years ago

I personally don't see how it can happen but of course I'm not a corporate lawyer. The parent companies merge so they might keep up some local branch to support the UK market, but how would that be connected to the parent company? What level of separation is needed, in the UK's eyes? Will the UK Activision branch workers allowed to work with Microsoft US? Or would that be seen as evading the ruling?

latency-guy2• 3 years ago

I've been petty enough to cut off quite big deals in my life, I wouldn't expect the moral outrage company that Microsoft harbors to not do something similar. As we know, MSFT did remove Twitter from their ad network due to API pricing changes, price of business is cheap compared to the benefits they got there, so that's quite a ridiculous cut of spending to say the least.

Then again, we know they operate in countries fundamentally opposed to their "corporate values". So who knows.

kmlx4• 3 years ago

it will 100% lead to some games not being available in the UK

beyond the hype and the takes, it's probably 0%.

FTC suing to block Microsoft's $69bn Activision Blizzard acquisition

what are they going to do, ban games from the US?

ricardobayes6• 3 years ago

Why? What other realistic scenario do you see playing out here? In my mind there is no question the merger of the US companies will go through. They will either create some other entities to make this ruling work or simply make Activision games unavailable in the UK.

rvz2• 3 years ago

Very unsurprising. [0] This is just basic horizontal integration and this is the right decision to block this deal.

[0] https://news.ycombinator.com/item?id=33518102

kripy• 3 years ago

https://archive.md/m784j

mouzogu• 3 years ago

mr kotick going to have to buy a smaller yacht i'm afraid.

smcleod• 3 years ago

Good. Governments should be block FAR more acquisitions. We need more small to mid sized companies and far fewer mega corps.

jeroenhd• 3 years ago

Really? Cloud gaming is where this gets killed off?

I suppose they can't really block the merger for their exclusive titles seeing as all of Microsofts's competitors are the same or worse when it comes to exclusives, but I'm still surprised someone managed to convince these people that cloud gaming was going to be the way this merger was going to bite people in the arse.

I do hope regulatory bodies will maintain these decisions across other platforms as well (i.e. Sony's acquisitions, Epic Games) but I'm not sure that's realistic if cloud gaming is cited as the main reason why two tech conglomerates merging is a bad idea.

thepratt• 3 years ago

https://archive.is/2mV5g

kkan• 3 years ago

Anybody who plays games is not happy about this. Activision is the worst of the worst and the Microsoft deal was a chance to make their offering more refined and accessible via GamePass. Especially it was about saving Blizzard from turning into total shitshow. Id this deal will not go through, nothing will change. CoD will remain trash, Diablo IV will have micro-transactions in addition to its $70 price tag.

diffeomorphism3• 3 years ago

Anybody who plays games is very happy about this. Activision is the worst of the worst and the Microsoft deal was a chance to cement this problem or make it even worse.

segasaturn9• 3 years ago

Per the agreement in the deal, when the deal closed Bobby Kotick would be out as CEO and replaced with Phil Spencer who is VERY well respected in the gaming community.

newsclues6• 3 years ago

No, unhappy about this.

As you say, Activision is the worst of the worst and the MS deal was a chance to change this.

You think Activision is going to ditch the terrible leadership and change on its own? haha

pcurve• 3 years ago

Microsoft has done ok with not bastardizing its acquisitions under the current CEO, no?

stale2002• 3 years ago

You actually have to make an argument, which you didn't.

The argument for why Microsoft would make things better is that we can look how great Microsoft has been handling similar gaming acquisitions, like Minecraft.

Your "argument" though seems to be repeat back someone else statement while saying "Nuh uhh!".

Do have an actual original thought here, as for why you think Microsoft would make things worse, when the evidence we have shows otherwise?

Or is the extent of your argument "Nuh Uhh!" And "I said the opposite of what you just said!"

sensanaty• 3 years ago

You really think M$ wouldn't stick microtransactions out the ass out of anything they touch coming from ActiBlizzard?

segasaturn9• 3 years ago

Unfortunately Microsoft's overall size causes people to have knee-jerk reactions about them being "too big" without looking into the context: Microsoft is in last place in console market share this gen and the previous gen. In the gaming space Microsoft isn't a monopoly, they are the underdog that antitrust is supposed to product.

madeofpalk3• 3 years ago

Maybe Microsoft should make a better console if they want a higher place in the console market, rather than just buy their way into ancillary markets.

ErneX4• 3 years ago

MS also puts micro-transactions on their 1st party titles, plus their 1st party titles have not been so great since the Xbox 360 days. Halo is a shade of what it was for example.

segasaturn9• 3 years ago

I know a lot of people here are anti-big tech and I am too, to a certain extent, but I want to play devil's advocate here and provide my case for the deal:

Activision-Blizzard was in total corporate chaos before the deal was announced, the CEO (Bobby Kotick) was accused of permitting workplace sexual harassment and employees at the company were on the verge of mutiny. They were also seen as a stagnant publisher that only cared about its billion dollar franchises (Call of Duty and Candy Crush) while letting its other IPs like StarCraft and World of Warcraft rot and turning the beloved Diablo into a cash-grab pay-to-win mobile game. The Microsoft acquisition would have likely breathed some new life into the company and allowed corporate to clean up shop. This will probably lead to Activision-Blizzard continuing on its previous, doomed trajectory that it was on back in 2021.

newsclues6• 3 years ago

Microsoft needs to clean up Activision-Blizzard, I totally agree.

Two big bag companies, but surprising Microsoft is the better one.

edgyquant7• 3 years ago

Right, the merge would have been good for activision and microsoft, but bad for the consumer.

capableweb8• 3 years ago

If you wanna play devil's advocate, at least try to answer the concerns voiced by the watchdog.

The concern is not who can develop the existing IPs the best or if Activision/Blizzard will continue to exist. The concern is that Microsoft already has a strong position, and consolidating it further will make it even harder than it is for new entrants to have any chance.

“Microsoft already enjoys a powerful position and head start over other competitors in cloud gaming and this deal would strengthen that advantage giving it the ability to undermine new and innovative competitors,” Martin Coleman, chair of the independent panel of experts conducting this investigation, said.

If you're still up for playing devil's advocate, come up with an argument against that this acquisition wouldn't consolidate anything in Microsoft's favor, and as a result lead to fewer consumer choices.

segasaturn9• 3 years ago

Microsoft is pretty consistently in last place in console market share and the Xbox brand is dwarfed by Sony and Tencent (China).

Microsoft's strong current position in Cloud Gaming isn't because XCloud is devouring all the competition, its because the competition barely exists in the first place. Google and Amazon left their cloud gaming products to rot and GeForce now is very janky (but still quite popular from what I've heard!). Google and Amazon's mismanagement of their products doesn't automatically make XCloud into an aggressive anti-competitive monopoly, especially when you consider the fact that Microsoft inked a 10-year deal with Nintendo's cloud gaming provider to provide Call of Duty to the platform last month.

maxsilver• 3 years ago

I agree with most of this, but this isn't an argument for Activision-Blizzard merging with Microsoft, this is an argument that Activision-Blizzard shareholders need to throw out Bobby Kotick and his folks, and replace them with competent leadership (or really, anyone with a pulse who won't union-bust and won't sexually harass people, would be more qualified at this point).

It's ridiculous that a company with this many talented people, and this much treasured IP, is languishing in this state and tied up with such easy-to-avoid internal-only mistakes.

The Microsoft acquisition would have likely breathed some new life into the company and allowed corporate to clean up shop

Maybe. But it seems more likely that Microsoft would have cleaned up leadership a tiny bit and then left Activision-Blizzard to slowly quietly rot away, in much the same way that Microsoft has treated Halo.

fireflash38• 3 years ago

Agreed. But tossing leadership & getting new supposedly 'better' leadership is high risk, whereas an acquisition is low-risk and more reliable at getting short term gains.

There's a substantial portion of the tech startup sphere whose entire goals are: get big enough to get acquired and get a big bag from the sale. It kind of runs counter to current sentiment around here.

nashashmi2• 3 years ago

It's ridiculous that a company with this many talented people, and this much treasured IP, is languishing in this state and tied up with such easy-to-avoid internal-only mistakes.

It's why they are languishing. It's the "resource curse". On the contrary, It's one of the reasons why Microsoft is a killer machine. They are disciplined and focused. That kind of discipline stifles away creativity (like Skype and yammer).

Salgat• 3 years ago

One is a solution that fixes the issue now, the other is us hoping for shareholders to eventually do the morally right thing (which is a silly thing to expect).

ddtaylor2• 3 years ago

Shareholders can get rid of Bobby Kotick and do all kinds of other leadership changes and it's not going to fix some of the problems that some of us were hopeful for.

Microsoft has shown some resolve when it comes to supporting games in spaces that aren't absolute gold mines, specifically in the Real Time Strategy (RTS) genre. They are publishers of Age of Empires, which all things considered is a drop in the bucket when revenue wise, yet it still is allowed to exist. Blizzard (via Activision) mostly exploits or kills all of it's "less-than" products, which increasingly is almost everything when compared to the behemoths like Call of Duty and Candy Crush.

It was probably a bit of wishful thinking, but some of us were actually excited that Microsoft would get access to some of the games that don't get supported very well while the customer base is literally holding their wallets out asking to pay to support the game. For example, Heroes of the Storm does have a dedicated following and we're ready to pay $10/mo or something similar to help support the game, but it's literally spent the last three years patching after every time it runs because it's broken. It still plays fine, but it eats gigabytes per month of bandwidth all because nobody cares enough to modify an XML file or something.

The same is true of Diablo II: Resurrected. It's a great game, but we can't pay for extra stash tabs which in the ARPG genre is kind of the go-to monetization strategy these days. Everyone would be fine paying $5 for a few stash tabs and it would be a good way to support ongoing development and maybe pave the way to getting the long awaited "Act 6" content everyone would love or even just allow the team to spend a bit more time adding more end-game meta content.

spprashant• 3 years ago

As far as devil's advocate argument goes I suppose its valid.

But I wouldn't think this changes the opinion on any antitrust violation concerns.

If a company has problems, especially cultural issues, it should fix them or die.

madeofpalk3• 3 years ago

If the company is bad, then the company should fail.

Art9681• 3 years ago

The trending story on the Microsoft gaming division side is how badly Xbox is doing. I don't think Microsoft is doing anyone a favor by acquiring gaming companies at this point. It's evident that Microsoft is where game development studios go to die.

Bethesda's acquisition is extremely demoralizing due to this. I hope Starfield succeeds as it's my most anticipated game of all time.

rvz2• 3 years ago

Or maybe we should not be supporting horizontal integration of already large companies in the same industry acquiring other large companies.

The acquisition of Bethesda doesn't help Microsoft's case of horizontal integration or even their future intentions with cloud gaming with the potential integration of their existing Xbox game pass service even if they acquired Activision-Blizzard.

Seems like the UK regulators decision in that regard was the wise decision and it was the right one.

misssocrates• 3 years ago

Was that proven? And how close did employees get to taking over the company?

segasaturn9• 3 years ago

Employees weren't staging a literal mutiny, I was using the term creatively.

Here are some links about the worker unrest at ABK prior to acquisition announcement:

Activision Blizzard worker organization: https://en.wikipedia.org/wiki/Activision_Blizzard_worker_org...

Activision Blizzard employees stage open-ended strike and union drive: https://arstechnica.com/gaming/2021/12/activision-blizzard-w...

Its noteworthy that the employee strikes mostly stopped after the acquisition was announced - seems they believed like I do that Microsoft would have cleaned things up.

samstave3• 3 years ago

The price of ~~content~~ games is too damn high!

Basically this, the cost for a AAA game at ~$69.99 is just fucking ridiculous.

nluken• 3 years ago

AAA games take thousands of hours of labor from huge teams to create. When you consider how much work goes into it, $70 seems like a bargain. Also, if you account for inflation these kinds of games are cheaper now than they've been for most of gaming's history.

In practice, however, many games fail to break out of super basic gameplay loops. I usually prefer cheaper indie games where I have more fun.

ErneX4• 3 years ago

There were 70 USD games in the 90s. Yeah those were cartridge games but still, it’s probably the sector were inflation has been felt the least.

kernal• 3 years ago

the CEO (Bobby Kotick) was accused of permitting workplace sexual harassment and employees at the company were on the verge of mutiny.
Microsoft received 721 employee complaints of discrimination and harassment in the U.S. between 2019 and 2021, and Microsoft investigators found most allegations to be "unsubstantiated".

Excluding the 2022-23 complaints, I'm just wondering which company do you think is under more "chaos" and on the verge of "mutiny" right now?

lofaszvanitt• 3 years ago

:DDDDDD

The gaming landscape already looks like a barren desert. More consolidation will lead to more desert like features.

ericmcer• 3 years ago

It is crazy how Blizzard was a few hundred employees when they released Warcraft, Starcraft and Diablo over a couple years. Now with 50X as many employees and 23 years of effort they have done nothing but coast off their original hits.

I don't know why this happens but it seems to occur again and again in gaming with indie studios that get acquired.

rightbyte2• 3 years ago

I got a feeling developers nowadays are so much less efficient than 10-20 years ago.

The tools are so bloated and arcane compared to the can-do approach.

Also agile messes up productivity alot due to its inflexible and process heavy nature.

mritchie7123• 3 years ago

* Success often brings bureaucracy to protect against losing what you've got going for you

* The bureaucracy drives away the types of misfit maniacs that build incredible and unique products.

* You're left with people more worried about fucking up then they are about building something awesome.

lcnPylGDnU4H9OF2• 3 years ago

When I consider that this turnaround seems to have happened right after they were acquired by Activision, it becomes less of a mystery. I suspect many of those original few hundred employees didn't stick around after their employer suddenly changed and those who left would have primarily been the most influential Blizzard people. There really is no "Blizzard" anymore except as it's tacked on to "Activision-".

doikor3• 3 years ago

Modern games are just way more complicated and all the assets have to be a lot higher quality. The assets especially just take a lot more work to do.

A single character model can have more polygons then a whole game back in the day. The textures are also way more detailed, animations are more fluid/realistic, etc.

This is why a lot of effort is being put into helping developers to make content faster with things like automatically generating large parts of levels/worlds (basically a developer puts in the important parts manually and some system fills in the rest) and automatically generating and animating humanoid models (MetaHuman), etc.

For example here is nice video about using MetaHuman with basically just a phone for face capture as input https://youtu.be/pnaKyc3mQVk?t=72

UE5 procedural generation stuff https://youtu.be/akIqVM0gh4w?t=435

mehlmao2• 3 years ago

Microsoft acquiring Bethesda fixed none of their management issues; why would this be any different? Further, Microsoft lied to EU regulators about what they'd do with the Zenimax / Bethesda acquisition.

AlexandrB6• 3 years ago

and turning the beloved Diablo into a cash-grab pay-to-win mobile game.

A decision which has made them a metric shit-ton of money. Why would they stop when they've found a winning formula? And why would Microsoft decide to stop such an easy revenue stream? Sure the Diablo name is being dragged through the mud (among a particular demographic, at least) but the consequences for that are years or even decades away. If anything, "cleaning up shop" might mean shutting down the less profitable divisions - something Blizzard has been actively doing anyway.

This will probably lead to Activision-Blizzard continuing on its previous, doomed trajectory that it was on back in 2021.

Maybe their trajectory is doomed when measured in decades. Right now they're printing cash. I think they're happy to abandon their legacy "core" audience in exchange for the gacha whales that will pay them multiples more for a cheaper-to-make experience.

I realize that a lot of us grew up with Blizzard games, I myself have all the CE boxes they shipped since Warcraft III. But the people who made those experiences are generally long gone. A change of ownership is unlikely to radically change priorities or bring back the magic.

aranelsurion• 3 years ago

To be fair, looking at how both Diablo 4 (PC/Consoles) and Diablo Immortal (Mobile) are doing today, they seem to be on the way to capture both audiences with solid products in either side.

Mobile gaming industry sucks so much, D:I is actually a good product there. It offers so much more than your regular ad-infested crap with "recharge energy" mechanics at the very least. It might be the worst compared to what is available on PC/consoles, but those are different audiences. For the more informed consumers Blizzard has Diablo 4, where they seem to restrain greed to somewhat acceptable levels.

Yes they've fumbled with their PR back then, might've made one of the worst presentations in industry history (look at Bethesda & Fallout Shelter and see it being masterfully done) and generally been incompetent in a few of their recent titles (W3: Reforged and OW2 comes first into mind), still, looking at it today, Diablo as a franchise looks like a right step than otherwise.

nonethewiser12• 3 years ago

The Microsoft acquisition would have likely breathed some new life into the company and allowed corporate to clean up shop.

This is irrelevant to the committee’s decision. The question is if the merger is too anti competitive.

TheCaptain4815• 3 years ago

Microsoft has practically destroyed every major game franchise it’s owned in the past decade and Xbox only exists because it’s being subsidized by Azure. Very happy with this decision.

edgyquant7• 3 years ago

It’s nice that this was blocked, but they really should have blocked the Bethesda acquisition. Buying the best selling game franchise (Elder Scrolls) and making it an exclusive is a cut and dry anti-competitive move and Microsoft should have been punished for even trying.

myrmidon• 3 years ago

Disagree somwhat; Age of Empires would be unlikely to do better under any other publisher IMO.

The whole Gamepass thing also appears functional to me (i.e. I know people who pay money for it and are satisfied, unlike former Stadia).

But I strongly believe that stopping consolidation in that market is a laudable move and am super happy with the decision to block this.

muststopmyths• 3 years ago

The new Gears of War was quite good, I thought. Nowhere near as bad as the new Halos.

nonethewiser12• 3 years ago

Minecraft and Mojang studios more broadly did great

dustedcodes2• 3 years ago

Honest question, how does this deal make any financial sense to Microsoft if the plan wasn't eventually to implement anti-competitive practices much later down the line? Just buying Activision and then continue to run it as if they were neutral surely makes no sense. That's clearly not why they want to buy them.

I am glad that this deal has been blocked. In fact Microsoft is already too big. It shows in their products.

AmericanChopper• 3 years ago

how does this deal make any financial sense to Microsoft if the plan wasn't eventually to implement anti-competitive practices much later down the line?

It makes perfect sense. These huge companies have a lot of unused capital, which they have to find productive uses for. Acquisitions in markets they already have competencies in are a rather obvious way to make use of it.

Internal R&D and launching new products is the best use of this capital (as it’s the most tax efficient), but it’s difficult to infinitely scale that spending efficiently (but acquisitions can effectively be one way of scaling this over the long term).

The alternative is dividends, or the much more tax efficient stock buy back. But long term, acquisitions are better for shareholders.

etempleton4• 3 years ago

Microsoft also owns Minecraft and they put that everywhere. For Microsoft it is all about GamePass. They want to be the Netflix of games, but to do that they need a large library of games on their service that people want to play to make it a no-brainer subscription.

dustedcodes2• 3 years ago

They want to be the Netflix of games, but to do that they need a large library of games

You don't need to buy Activision for that to happen. Netflix hasn't bought Universal or MGM. They purchase the rights to offer movies on their platform and at the same time produce their own content via their own production. Also Netflix doesn't own the hardware. That makes it very different to Microsoft, who own the hardware, the platform which you speak of (game pass) and also wants to own the production companies. This stinks of anti-competitive behaviour from miles if you ask me and is nothing like Netflix.

coldpie2• 3 years ago

how does this deal make any financial sense to Microsoft if the plan wasn't eventually to implement anti-competitive practices much later down the line

I'm also not a fan of this deal, but I think this is a good question worth an answer. I think you'd need to suggest exactly what practices they may want to implement.

For example it's not hard to see why they would continue to want to put COD on PlayStation systems: that brings in a ton of money. You can imagine a world where yanking it helps Xbox, but I don't think that's an inevitable result; would they really want to give up $X Billion in revenue from PlayStation if that only brings in $Y Million in new Xbox sales? Obviously it all depends on the numbers, but it's an example of why they can still benefit from this transaction without implementing anti-competitive practices.

Hamuko5• 3 years ago

Microsoft said that it wouldn't have an incentive to withold games from other platforms in 2021 when they acquired ZeniMax.

"[Microsoft] submits that Microsoft has strong incentives to continue making ZeniMax games available for rival consoles (and their related storefronts)."

2023/01: Hi-Fi Rush is exclusive to Xbox and Microsoft Windows.

2023/05: Redfall is exclusive to Xbox and Microsoft Windows.

2023/09: Starfield is exclusive to Xbox and Microsoft Windows.

So yeah, I'm gonna err on the side of "they'd probably restrict a lot of games afterwards". Maybe some big existing properties like Call of Duty might be available, much like Minecraft, but I don't foresee Microsoft-ABK being a win for competition.

saos2• 3 years ago

I’m so happy

mysterydip• 3 years ago

If Microsoft and Activision are both US companies, but have international offices, do they have to get approval from every country they operate in? Could they merge just the US parts or non-UK parts?

capableweb8• 3 years ago

Yes, both companies have offices around the globe, with corporate entities all over the place. As those have to operate within the laws of the countries they're incorporated in, if they get blocked by some local watchdog, the acquisition wouldn't be able to be completed in that country.

More so, the merger is also discussed in the EU in general, which is a bigger market than just the UK alone, and if the acquisition gets blocked in the UK, EU watchdog will surely use that block as prior material for doing a EU-wide block.

Hence Microsoft is lobbying both the UK itself and Europe wide for making the acquisition go through.

Of course, even if the acquisition gets blocked everywhere but in the US, the US counter-part can still be acquired, but not sure how much sense that would make, they'll probably end up not going through with it at all in that case.

Firmwarrior• 3 years ago

If the US part has all the talent and all the profit, seems like that'd still be a pretty viable move, wouldn't it?

rwmj• 3 years ago

Yes actually. When IBM acquired Red Hat there was some last-minute hijinx involving getting Brazilian (IIRC) regulatory approval.

justeleblanc4• 3 years ago

https://assets.publishing.service.gov.uk/media/6448f377814c6...

Why did we review this merger?
28. The CMA’s primary duty is to seek to promote competition for the benefit of consumers. It has a duty to investigate mergers that could raise competition concerns in the UK, provided it has jurisdiction to do so.
29. Microsoft announced in January 2022 that it had agreed to acquire Activision for a purchase price of USD 68.7 billion. The Merger was conditional on receiving merger control clearance from several global competition agencies, including the CMA.
30. While both Microsoft and Activision are US-based entities, the question for the CMA is whether the Merger may have an impact on competition in the UK. This link to the UK can be established based on the turnover of the business being acquired in the UK (ie whether the UK turnover of that business is more than £70 million). In this case, we concluded that the CMA had jurisdiction to review this Merger because Activision met that threshold in FY2021.

You can read the full case here: https://www.gov.uk/cma-cases/microsoft-slash-activision-bliz... Microsoft and Activision/Blizzard decided themselves to seek the approval of the CMA.

The CMA's final decision is a 418 pages-long report. I doubt any of the commenters here have read it before throwing in their opinion about the case or the decision.

nonethewiser12• 3 years ago

You don’t have to read 418 pages to have an opinion.

newsclues6• 3 years ago

As a gamer Activision is a shitty big company and while Microsoft is in the same category, Microsoft is an improvement over Activision.

HumanReadable2• 3 years ago

Very sad about this decision. Blizzard has shown itself to be entirely incompetent, and seeing how well Microsoft managed the Minecraft IP I was looking forward to seeing what they could have done with the excellent blizzard IP.

segasaturn9• 3 years ago

Minecraft is a great example of what could have been, for sure. We're nearing the 10 year anniversary of the Mojang acquisition (wow) and Minecraft is still flourishing and as popular as it's ever been. It's kind of amazing how relevant Minecraft has remained all of these years instead of fading into the background as a 2010s fad game. It's also stayed aggressively cross platform, available on basically every device known to man, including a Linux port that's still developed, which throws a bit of water on the fears that Microsoft would turn Call of Duty exclusive.

edgyquant7• 3 years ago

which throws a bit of water on the fears that Microsoft would turn Call of Duty exclusive.

No it doesn’t since Microsoft is doing just that with Bethesda. The Minecraft acquisition was at a time when MS had no good will and needed to earn some, plus it’s a lot of children playing that who can’t be bullied into buying another platform. This is not the case with future releases on games that basically every adult who plays games takes part in.

saos2• 3 years ago

The CMA have always done a solid job. Glad they blocked this.

elAhmo• 3 years ago

Good! There is no sane reason to allow Microsoft to own one more company and just become bigger in another market.

It has nothing to do with their core business (which is quite diverse to be fair), and as an end consumer, on average, this would just cause harm long term, considering consoles and gaming market in general.

One example: Call of Duty. Might not be important for many people, but having CoD become unavailable on the most popular console, just because someone had huge amounts of money and bought a $69B dollar company doesn't sound fair and would be a net loss for the industry.

PretzelPirate3• 3 years ago

but having CoD become unavailable on the most popular console

It would still be available for at least 10 years even if the deal went through.

pers0n• 3 years ago

I wish the US had the guts to do things like this, but I suppose they don't due to lobbying.

kmlx4• 3 years ago

https://www.eurogamer.net/ftc-suing-to-block-microsofts-69bn...

FTC suing to block Microsoft's $69bn Activision Blizzard acquisition

mturilin• 3 years ago

Can someone explain how a UK regulator can block a deal between two US companies?

can16358p2• 3 years ago

They also operate in UK. Of course if they were "just" two US companies UK can't do anything but these companies also have legal presence in the UK.

Leherenn• 3 years ago

What would they have to do if they were to decide that the deal is more important than the UK?

- merge everywhere else but the UK (presumably that would mean spinning off/closing one of Microsoft or Activision UK branch). I guess that wouldn't be enough?

- both companies have to pull off of the UK?

etempleton4• 3 years ago

How does the CMA reconcile the fact that Sony also has a cloud streaming service and it is larger than Microsoft? If this makes Xbox too big doesn’t it mean that PlayStation is also too big? And how is anyone to compete against Sony if they can’t grow their own exclusive content?

htag• 3 years ago

And how is anyone to compete against Sony if they can’t grow their own exclusive content?

1. Xbox Live/Game Pass is still a better service, and one of the best deals in gaming.

2. Microsoft already owns (or has owned in the past) tons of gaming IP. Halo, Minecraft, and Bethesda are huge names. Microsoft Game Studios was used to publish some fantastic games in the past.

3. Cloud streaming is largely theoretical at this point. There's potential, but will customers choose a $20-40/mo subscription instead of buying a ~$500 console every ~5 years. I'm doubtful. The math says it's a bad deal for console gamers and worse performance for the top 1% of the market. Sony's lead here probably isn't the killing blow for Xbox.

4. Microsoft could always make it's own games, instead of acquiring them.

5. Microsoft has some benefits with owning both platforms Xbox and Windows that they have never been able to fully capitalize on.

I own an Xbox, a PS5, a Switch, a Steam Deck, a high powered gaming desktop, several arcade games, and basically all the retro consoles.

etempleton4• 3 years ago

Cloud streaming is largely theoretical at this point. There's potential, but will customers choose a $20-40/mo subscription instead of buying a ~$500 console every ~5 years. I'm doubtful. The math says it's a bad deal for console gamers and worse performance for the top 1% of the market. Sony's lead here probably isn't the killing blow for Xbox.But that is

But that is the CMAs argument. That this will make Microsoft too dominant in the cloud streaming space.

mirages• 3 years ago

Can someone explains me why a UK court is able to block a deal between 2 US corps ?

How can they overreach ?

Jowsey• 3 years ago

Presumably by banning them from business in the UK if they go through with it

M2Ys4U2• 3 years ago

Microsoft are free to withdraw from the UK market to avoid being regulated by UK regulators.

But unless they do, the UK has the right to regulate its own market in the way that they see fit, irrespective of whether that impacts on other markets (modulo international trade agreements).

desas• 3 years ago

The two US corps both want to do business in the UK. If the two US corps don't want to do business in the UK, they can feel free to ignore the UK authorities.

drumhead4• 3 years ago

It only relates to their activities in the Uk. MS would have to either comply with any remedial measures or just stop operating in there.

unionpivo• 3 years ago

Well if the two US companies that do business in US and with US residents, than UK court would not have any jurisdiction. (And would not even try, it's not like they don't have other things to do.)

But in this case, you have two US businesses, that own local UK business and do business on UK soil with UK customers. That is why they fall also under jurisdiction of UK.

MS and Activison could close their business in UK, and stop serving their customers and then they would not be affected by UK courts.

Bottom line is, if you do business in multiple places, you need to play by the rules of all that places.

It's similar how the legislation in lets say California can affect products in all the USA.

AraceliHarker3• 3 years ago

I can’t understand at all why CMA accepts the overwhelming share of the current PS5 high-end game console market for the reason of cloud gaming, which has hardly started up yet, and even if they say “protect the innovation and choice of cloud gaming”, gamers who only have Xbox Series S|X think “if you say that, let me play Collapse: Star Rail or FF16 on Xbox”, don’t they?

pipes5• 3 years ago

How can the UK prevent two US companies from merging?

nozzlegear2• 3 years ago

Not a lawyer (barrister?) but I’d guess it’s because both Microsoft and Activision have offices/legal entities in the UK as well as the US. I wonder if the decision could be routed by Activision simply closing those offices and exiting the UK? Not saying it should be routed, just openly speculating as an armchair not-lawyer/barrister.

kmlx4• 3 years ago

it's not about offices, it's about competition.

if the companies' activities affect competition in the UK then the CMA is responsible.

the hint is in the name: Competition and Markets Authority

dopeboy2• 3 years ago

I was wondering this too. Does this also affect whether they can do business there?

sofixa2• 3 years ago

Welcome to globalisation, baby. Very few companies are in one country exclusively, and are thus subject to the laws of any country they operate in. That's why Google pulled out of China years ago, to not be subject to Chinese laws (even though they're a "US" company).

For reference, both Activision Blizzard and Microsoft have very significant presence outside of the US.

klelatti3• 3 years ago

From the FT:

Activision, maker of the hit game Call of Duty, said the ruling “contradicts the ambitions of the UK to become an attractive country to build technology businesses”. It labelled the decision a “disservice to UK citizens, who face increasingly dire economic prospects”, adding: “the UK is clearly closed for business.”

What a petulant response.

reedf1• 3 years ago

It is petulant - but it is also politically savvy. This is exactly the kind of rhetoric the UK government tries very hard to dispel.

klelatti3• 3 years ago

You can make these points without insulting the country. He’s not winning any friends with language like this.

gtm1260• 3 years ago

Does anyone else think its crazy to unwind these acquisitions years afterwards? Where the companies have already been operating as a single entity for years?

endianswap• 3 years ago

What are you talking about? The deal hasn't closed yet AND was only announced a year ago.

Laaas• 3 years ago

How come the UK has the ability to block two American companies from merging? Why can't they just ignore the CMA?

kmlx4• 3 years ago

If the merging parties were to ignore the CMA's decision they could face significant legal and financial consequences. For example, the CMA could fine the companies, force them to unwind the merger, or take legal action to enforce its decision. Additionally, ignoring the CMA's decision could damage the companies' reputation and relationships with UK customers, regulators, and stakeholders.

CodeWriter233• 3 years ago

Cloud Gaming is always going to fall on its face, like Stadia, for one simple reason. Latency. It’s bad enough when latency interacts with multi-kilobyte telemetry messages in the client-rendered model. Cloud Gaming replaces that messaging with pumping multiple megabytes of video data to one’s screen.

jeremyjh• 3 years ago

Do you have a lot of experience with this? I have used GeForce Now to play Fortnite and other games for years and I think it works great. I’ve also used PS Now to play Bloodborne which is very sensitive to feel and timing and that works well too, it actually plays better there than it did on the original PS4.

dopeboy2• 3 years ago

Admittedly I was coming in with the same perspective as OP so I wasn’t aware you could smoothly play triple A titles via streaming. No catch, no hang ups?

beebeepka6• 3 years ago

What about latency, though. Fortnite may be possible but Quake or StarCraft? Sure, on the lowest of the lowest of tiers. People used to say 24 fps was great, too. Only took us 20 years for the masses to catch up.

Anything below 120 feels sluggish to me. At 60 fps local, I move my mouse and the picture is changed after what feels like an eternity. Can't imagine cloud rendered 60 being better. In fact, it's guaranteed to be worse.

HDThoreaun• 3 years ago

The most competitive games in existence are all online games that suffer from the same latency issues a cloud gaming service would. They seem to get along fine even though they require much more precise movement than the types of games that gamepass users would play.

beebeepka6• 3 years ago

But moving these games to the cloud is adding more problems on top without fixing any of the latency issues

MikusR5• 3 years ago

There are games that on Geforce now ultimate tier have lower latency than playing locally on console.

CodeWriter233• 3 years ago

*reported latency

Not saying reported is unequal to actual on that system, just pointing out the reality, a cloud gaming vendor is saying “this is out latency”

deepzn• 3 years ago

Probably consumers might benefit from concentration of gaming titles within Xbox for more seamless experiences. But, arguably very destructive in the long run. As this is a major INDEPENDENT studio, not only for multiplatform but also for deciding the titles/projects they produce.

As we see with the HBO Max/Discovery merger, once companies merge, they have the option to close or end projects, that is destructive to both consumers and the creators of those.

Furthermore, these are trillion dollar companies, that are almost getting if not already way past the size of "Too Big To Fail". These companies need to be reigned in, if we are trying to create mobility in the private sector, as well as consumer choice, and avoid monopolization currently already in tech.

runako6• 3 years ago

Microsoft has to be calculating whether to (temporarily) pull out from the UK as a result of this.

Their sales there are in the neighborhood of $5B annually (~2% of their overall run rate). Add a guess of $500m for Activision's UK sales for a total of $5.5B.

The hit to sales would be temporary; the UK government would eventually capitulate as their citizens revolt at not being able to buy Windows or Office. (Yes, there are other options but a sudden loss of access to Microsoft products would be devastating.)

Based on the numbers, it's not clear to me that the UK has the leverage to stop this merger. If they were still part of the EU, this calculus wouldn't begin to make sense.

d3ckard• 3 years ago

That would be a country/corpo war and too cyberpunk to my taste. I don’t agree with the decision, but this is not the way to solve this.

runako6• 3 years ago

That's the interesting thing here. Unlike recent regulatory actions by the EU, there doesn't appear to be a solution provided other than to let the UK CMA make business strategy decisions for Microsoft.

I don't think it is necessarily how Microsoft will proceed, but it would be irresponsible for them not to consider such an approach.

I also do think the CMA is overplaying its hand; sooner or later they will make a decision like this and a company will pull out of their market. Alone, they simply don't have the economic heft to regulate global companies domiciled outside their borders.

segasaturn9• 3 years ago

I highly doubt that Microsoft is going to go nuclear to acquire ABK. I don't think this merger is do or die for them. It would also do irreparable harm to their brands, including the UK Xbox owners who would no longer be able to play their games!

seatac76• 3 years ago

MS cannot possibly do this, it would mean giving up any business with NATO. It’s insane to me that a game studio acquisition gets such emotionally charged responses.

runako6• 3 years ago

MS cannot possibly do this

They obviously can. They don't operate in every country in the world, and there is nothing forcing them to operate in the UK. It would be irresponsible not to consider a move like this weighed against the relatively small contribution the UK makes to their global revenue.

giving up any business with NATO

I am suggesting that they have to be weighing temporary loss of the entire UK market; losing direct purchases by NATO would presumably be smaller than the entire UK market.

This isn't emotional at all. I am just suggesting that it has to be something they are considering as an option for completing the merger that their executives believe is important. Relatively speaking: they are willing to spend 14 years of their UK sales to buy Activision, so presumably they think it's important.

gigel822• 3 years ago

No.

But I'd absolutely love to see one of the big guys try this, it would be super interesting to watch.

worrycue2• 3 years ago

their citizens revolt at not being able to buy Windows or Office.

The UK will probably allow those to be sold.

If MS refuse to sell them, the politicians will just spin it as Microsoft vs the UK and get everyone worked up over “sovereignty”. Maybe even fund and promote a standardised Linux Desktop distribution to replace Windows … which has a chance to spread in popularity worldwide.

Either way, Microsoft might be jeopardising future sales of its products in the UK by going on the offensive. It might also make other countries’ governments warily of the company and impacting sales in those countries too.

It would leaves the market wide open for their competitors to claim without any resistance from Microsoft as well.

runako6• 3 years ago

The UK will probably allow those to be sold.

Fair! Playing it out...if the UK allowed Microsoft products to be sold, but not products from the gaming division, that also might cause consumer unrest. Other than fines and/or preventing sales, there aren't all that many sanctions available to regulators in a situation like this.

Maybe even fund and promote a standardised Linux Desktop distribution to replace Windows

I'm old enough to have gone all-in on Microsoft alternatives around the turn of the century. European countries have been pushing initiatives like this for decades without meaningful results. Maybe this time it would work?

It also leaves the market wide open for their competitors to claim without resistance from Microsoft.

This could be good overall for the long term of the software ecosystem, although the sudden transition would be detrimental for UK citizens in the near-to-medium term.

justeleblanc4• 3 years ago

Don't be absurd. Microsoft and AB decided themselves to make their deal conditional on the CMA's approval. They're not going to pull out of the UK market. I'm amazed that this kind of take rises to the top of the comments.

_cenw• 3 years ago

I really wish we could have a different kind of competition in gaming (and some other sectors).

I miss the good old days when everything was on Steam. I wish there was some middle ground between everyone paying 30% to Valve and running 10 launchers at once. And now, with subscription models making their way in, it even more closely resembles the development of Netflix. There should be an industry standard launcher, just as there should be an industry standard cloud gaming standard. As it is now, only one of them is really usable with reasonable latency where I live, and it lacks a lot of games because NVIDIA refused to put their foot down on "we just provide a computer, not a platform".

This competition is parallel worlds that pretend their competitors do not exist and where customer choice doesn't exist (unless you're really not picky about what to play).

nonethewiser12• 3 years ago

I miss the good old days when everything was on Steam.

Well, this is 1 step further from everything being on gamepass

Vt71fcAqt72• 3 years ago

In general I agree that Big Tech is too big or is in some way anticompetitive; In this case however there is no threat in my opinion. Video games are not a utility and have no control over utilities unlike eg. Amazon (where we can debate what control Amazon has). That to me is the most important factor. Besides that point, there is no inherent anticompetitive element to one company owning a large portion of the video game market because it does not prevent others from competing. Anyone can make their own game, and indie games succeed year after year, even if 99% fail.

The real issue is tying computers to software. Computers and software need to be considered two markets. Computers are a utility, whereas software is sometimes a utility. But by tying software and computers, these tying companies use their software to be anticompetitive in the hardware market. That is, any software which does not run on an untied hardware system is anticompetitive even if it has procompetitive effects. All this is to say that we need the Open App Markets Act to pass.

(This is all ignoring the OS market and the hardware and software tying that exists in it, which is more difficult to discus, but in my opinion system calls are anticompetitive as well by nature with the exception of a theoretical standardized set of system calls.)

jimmydorry• 3 years ago

Anti-competition bodies are designed to regulate more than just utilities.

Are you really saying that Microsoft can't exert undue influence on all other games and software studios to unfairly compete in the gaming segment... even though they would be controlling the operating system developed on and targetted to... let alone their extensive cloud and console providings that they could simply deny to the competition?

In such a landscape, indie devs would be powerless.

Vt71fcAqt72• 3 years ago

Anti-competition bodies are designed to regulate more than just utilities.

I was looking for a better word than "utility" but couldn't think of one. What I mean is that games are unimportant. Grain is a "utility" for me as are computers ect. And I don't think it matters what Anti-competition bodies are "designed" to regulated as I am already giving my own opinion on what I think they should do so for me this isn't a such an important point.

even though they would be controlling the operating system developed on and targetted to...

That is the issue exactly, which was my whole point. It's an issue irrespective of whether they have 1% or 99% of the video game market. They are the hardware/syscall railraod by which developers ship their software oil. But large marketshare alone is not an issue, and can be assured to be a non issue with something like the Open App Markets Act whereas in something like grain or computers it is almost impossible to show whether a dominant company has used their monopoly to hurt competition. If we just give some basic rules as to allowing users to decide how to use their computers we won't need to care about how large any video game company is.

geuis• 3 years ago

Video games are not a utility and have no control over utilities

This is true, but the laws around this don't only apply to utilities. In fact, they don't fully apply there at all (but I'll circle back to that).

As a big example, look at movie production companies and theater chains. Way back when, lots of the most popular chains were owned by production companies. So if you wanted to see certain movies, they were only available at the theaters owned by the companies that produced the film.

Sounds a lot like what we've seen in video games for years now, where lots of AAA games are exclusive on Xbox, Playstation, Nintendo (biggest example), or PC. And let's not forget MacOS and even Linux. Pretty much only the roughly equivalent spread of so many platforms has forced the big publishers to largely do multi-platform releases of popular titles. Let Microsoft own Activision-Blizzard and we could be seeing lots of existing titles and new ones be PC and Xbox only.

In regards to the big utilities, the last major one of those to be broken up was AT&T in the 80's. But beyond that, most of the major utilities can't really be "broken up" because of what they do. Power generation, water, and sewage. Those all require shared public infrastructure for the most part. Because of that, small pure commercial enterprises aren't possible. But for the most part the companies that provide those services are still commercial entities, but they have a few extra layers of government oversight that notionally should be monitoring them for good governance and civic oversight. Sadly we see where that falls apart like in Flint, MI.

Only didn't mention trash/recycling pickup because that's a lot more flexible. Much easier to have competing services, although in places like SF we only have Recology.

greenyoda• 3 years ago

Archive with full text of article: https://archive.ph/B5GYo

shubb2• 3 years ago

Probably good for Microsoft- the acquisition was agreed at bubble prices, and driven by copying a business that hasn't worked out.

SEA Ltd had great promise in 2021 - they made a hyper popular game and used those revenues and user mindshare to branch out into ecomerce, financial services and all sorts. It was seem as an important part to cradle snatch Gen A before they signed up to meta and amazon.

With metaverse ideas also peaking it seemed like a must do strategy for every conglomerate to get into games. Amazon did too!

In 2022, SEA and Meta are not healthy. Thier plan to invest heavily and get paid later does not make sense in a higher rate environment where the payoff is less than you'd make saving your money in bonds.

Microsoft has a long term interest in games, but it doesn't need to supercharge it. There are better uses for the 70 billion.

shudza2• 3 years ago

How come the UK is the one that blocks this? Aren't those US based companies?

NicuCalcea• 3 years ago

With British employees and customers.

ecf• 3 years ago

I’d love to see the deal going through anyway and Microsoft pulling COD out of Britain. Just once I want to see this bluff get called.

shudza2• 3 years ago

I'm pretty sure they have employees from at least 20 countries. That means any one of those countries could block the deal?

chaosbolt• 3 years ago

What am I missing here? I thought both Microsoft and Activision were American companies, why would the UK even have a say in this? Is it a "if you buy it you can't operate here" kind of statement?

fnbr• 3 years ago

I was about to ask the same thing. Why does this matter? It's like when the Canadian Parliament subpoenaed Mark Zuckerberg- he just ignored it [1].

[1] https://www.cnn.com/2019/05/27/tech/zuckerberg-contempt-cana...

nonethewiser12• 3 years ago

Never demand something which you can’t enforce. Signals major weakness.

summerlight• 3 years ago

Not only the UK government still has a significant power to leverage here, but also corporate doesn't usually want to directly go to war against governments since that's going to be an alarming signal for all other governments across the globe, especially EU who is actively seeking a way to regulate US big techs. Even US cannot protect them without a good justification.

Culonavirus• 3 years ago

That's my understanding too. At the end of the day, I'm sure this will be a PITA, but what stops Activision from spinning off its UK business operations into a separate entity that will not be part of the Activision-Microsoft deal?

Not to mention that the only part of distribution this can affect is the physical one. I mean, if I want to sell a game on Steam and sell it in all the regions Steam operates in, I can do so without needing a business presence in every individual country...

nonethewiser12• 3 years ago

That’s a good question. I don’t recall ever seeing something like this happening.

kats• 3 years ago

At least they fired all those people for sexual harassment. 37 fired and 40 written up. Goes to you can really change a bad workplace culture, it just takes 69 billion dollars.

sylware• 3 years ago

Is this true?

The dev studio of redfall was bought by msft, then the playstation build was scraped.

If true, I would have expected msft to be more cunningly smart, namely to provide a playstation build... but significantly worse than the windoz/xbox builds.

The only way msft could restore confidence would be to provide top notch elf/linux builds of ALL games of ALL its studios (not a few games here and there, and hardly any "significant" ones).

Idem for sony though.

sam345• 3 years ago

This strikes me as trying to mandate a particular market structure while at the same time claiming free market motivations. At what point will big tech structure themselves in such a way as to avoid certain over-regulated regimes.

kman82• 3 years ago

Microsoft is an American company. Activision-Blizzard is an American company. I get that the UK is an important market but how can their regulators block a deal that possibly most of the rest of the world wants. Who determines that the UK has the power to block this? Can somebody legally explain this to me ELI5?

ender341341• 3 years ago

Their market power is what determines it, if Microsoft wants access to that market they have to play by that markets rules. They'll have to decide if owning Activision is worth more than having access to the UK marketplace & talent pool.

topherPedersen2• 3 years ago

This didn't make sense to me either. Microsoft and Activision-Blizzard should just ignore them, they don't have any jurisdiction over American companies. Microsoft probably has more power over the UK than the UK has over Microsoft. Imagine if all the Windows machines quit working in the UK. Shit would probably fall apart real quick.

123pie123• 3 years ago

I really doubt that it would happen real quickly. but it would be a very stupid move for MS/ Azure

It would highly likely lead to the downfall of MS (in the EU/ europe anyway) with the UK putting massive amount of money behind a version linux. ie look at what google did to linux for the mobile phones! and remember what apple did to unix? .It would also allow the EU to kick MS massively - Germany has been trying to go for linux for some time

even the US is trying to block this merger https://www.eurogamer.net/ftc-suing-to-block-microsofts-69bn...

topherPedersen2• 3 years ago

How can they block a deal between two American companies that trade on an American stock market? Can't Microsoft & Activision just ignore them?

aio2• 3 years ago

Why is no one talking about 69

wdb• 3 years ago

Wondering what they will decide on the Adobe/Figma merger which is actually a bad deal for consumers. Disappointing decision from CMA in my opinion.

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UK Blocks Microsoft’s $69B Activision Deal

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