Microsoft acquired Activision Blizzard King for $69 Billion on 2023-10-13

[Jay]

Having a Series/5 only COD on Gamepass would also put it on Xcloud. That could make the potential market larger for Xbox than it would be for Playstation. Of course, this would also mean that they would have to offer it for sale on Xcloud in order to make money on it, and to my knowledge that hasn't happened yet. No game is available to purchase and play as streaming without a Gamepass sub to unless I missed something. The closest thing there is is the Fortnite streaming deal, which is a free game available to stream without a sub.

If merger fell through I don't believe ABK would put COD on GP or xcloud and I don't see that changing in the short to middle term.
Wouldn't make financial sense for MS to pay what it would cost to change their minds either.

They have no intrest in it for few reasons, but if they merge all that changes.

 

[Deleted member 11852]

Microsoft called Sony the day the deal was announced publicly, and I think that's when they first told Sony they had no intention of removing COD from that platform. So what do you consider to be "the start"?

When Microsoft document the deal offer in evidence. There was no mentions of deals being offered before September, which was months after the UK CMA and EU processes began and after the UK CMA published their report on their stage 1 report on 1st September. That document sets out the commitments Microsoft offered and there is no mention of Microsoft offering, or Sony rejecting, any deal. That happened in the twittersphere later that same month (September).

Microsoft never mentioned any deals until after that first CMA report was published, and Microsoft made no reference to early deals in their response to the CMA. Odd. Very odd.

 

[Deleted member 11852]

If merger fell through I don't believe ABK would put COD on GP or xcloud and I don't see that changing in the short to middle term.
Wouldn't make financial sense for MS to pay what it would cost to change their minds either.

If the deal falls through and Microsoft want Call of Duty in GamePass - which they do - why wouldn't Activision-Blizzard agree to such an arrangement for the right price? It's going to cost a minuscule fractions less than $70bn. The entire franchise for its entire lifetime over all platforms has produced $30bn in profit.

 

[iroboto]

If the deal falls through and Microsoft want Call of Duty in GamePass - which they do - why wouldn't Activision-Blizzard agree to such an arrangement for the right price? It's going to cost a minuscule fractions less than $70bn. The entire franchise for its entire lifetime over all platforms has produced $30bn in profit.

In my thoughts here: It’s cost prohibitive for MS. Essentially this is MS problem specifically as they move to cloud. They want xcloud to support COD. But if xcloud starts picking up COD must now stay on gamepass in perpetuity since they won’t allow digital owned games on xcloud. The cost challenges alone would be enormous to keep that title there without ownership over the franchise.

Effectively no gamepass no xcloud. And cloud gaming can’t take off without a library to match the most important IPs on the standard market. Thus why gamers keep returning to traditional gaming and we saw the death of Stadia and likely soon Luna.

As to why not just pay the piper? May just come down to the accounting of an acquisition and the expense of actually paying out. They would need to pay more than Sony for the marketing deal because Sony provisions that gamepass be blocked. And after MS owns the marketing deal, they must now pay unfavourable terms for the gamepass deal. Now we don’t even know if this is really going to work either.

I suspect overall, There is room and acceptance for the prior but not enough budget and acceptance in Xbox for the latter. Effectively experimentation to make streaming games work is costly. As I said in the other thread, lots of corpses will be made on the way to that end point.

 

[Shifty Geezer]

If the deal falls through and Microsoft want Call of Duty in GamePass - which they do - why wouldn't Activision-Blizzard agree to such an arrangement for the right price? It's going to cost a minuscule fractions less than $70bn. The entire franchise for its entire lifetime over all platforms has produced $30bn in profit.

The argument is MS wouldn't pay what AB would want. AB wouldn't want to lose money on the deal, so MS would have to pay over the odds of what the players would pay, likely, which wouldn't pull in enough GP sub interest to justify the investment.

 

[see colon]

The argument is MS wouldn't pay what AB would want. AB wouldn't want to lose money on the deal, so MS would have to pay over the odds of what the players would pay, likely, which wouldn't pull in enough GP sub interest to justify the investment.

Yes, of course money would be the the important part of the deal. Unless, of course, we are talking about Warzone. In which case, having the free game on cloud streaming would simply make it free to play, subscribe to stream, and the microtransactions would be processed through Xbox. That would make Warzone available wherever Xbox game streaming is available, so the potential installed base would increase substantially.

EA has been putting their games on their subscription service (which is included with Gamepass) after a first run of full price sales. So 6 months or so after Madden comes out, it hits the sub services. This keeps the player base alive because a slew of people jump in when it's "free-ish", and the sales of ultimate team stuff increases as well. If the MS/ABK deal does fall through, and they do sign a deal for Gamepass, I would assume it would be something like this. New COD is buy to play, some of the older games are on Gamepass, and perhaps the current COD gets added to GP about when sales would start to trail off.

 

[Jay]

Can't remember precisely where I heard this (possibily one of the produced docs) :
1. ABK don't think subscriptions services is right for COD, understandable when they make so much out of sales, month in month out
2. ABK don't think latency is good enough for streaming COD.

For MS to overcome those points it would have to pay huge amounts.
If they own ABK that all goes away, different considerations.

 

[Deleted member 11852]

In my thoughts here: It’s cost prohibitive for MS.

The argument is MS wouldn't pay what AB would want. AB wouldn't want to lose money on the deal, so MS would have to pay over the odds of what the players would pay, likely, which wouldn't pull in enough GP sub interest to justify the investment.

If this is true, it makes you wonder what kind of relationship exists between Microsoft and Activision-Blizzard outside of the money-focussed acquisition talks which is one set of shareholders (ABZ) negotiating with the management team of another (MSFT). Activision-Blizzard must really have been trying to fleece Microsoft for insane money for Microsoft to even consider spending close to $70bn to buy the whole company to cut around the bullshit.

When you look at Activision-Blizzard's finances as they pertains to modern Call of Duty, most profit comes from IAP/MTX revenue so it's not the cover price of the game sale that brings in the most money which is all you would expect Microsoft to cover for a Game Pass deal. Which really makes you wonder how shitty Activision have been treating Microsoft for the past few years. If it's half as bad as their employees, yikes.

 

[iroboto]

Which really makes you wonder how shitty Activision have been treating Microsoft for the past few years. If it's half as bad as their employees, yikes

Yea. They are 1/2 the size of Sony in terms of platform. So they need to make up 4x to get the same deals as Sony. And then pay extra for the per user loss of not purchasing CoD and degrading the brand to be a gamepass title because now people will wait out for the title to come to game pass. This doesn’t work for them while it would work very well for titles they aren’t doing too strong on the market (ie: this worked out very well for discovery titles that often are left out like Plagues Tale which is now a GOTY candidate)

Since they command the market, it appears they have no interest in ever letting people believe it could ever come to game pass; thus making players always make a purchase. I’m sure in some ways, Sony wants the same. As leaders in the market they would prefer nothing changes as this is currently leading to optimal profits. Everyone has to pay to play.

Gamepass and xcloud would upend that model and depreciate the value of premium AAA titles if such a concept exists especially if they are releasing them day 1.

 

[SmooTh]

https://twitter.com/x/status/1601342797306789888

 

[iroboto]

https://twitter.com/x/status/1601342797306789888

That could very well kill things for them. Can’t have 70B in limbo for months on end.

The Xbox strategy has to proceed without it. VGAs were disastrous for them and will likely result in a post show dip in console sales. If they had nothing prepped because of regulatory this would be detrimental because you can’t do this forever. If you didn’t show anything because they have nothing this is detrimental. Cannot have 2 years of absolutely no content. The main reason to get onto a gaming platform is to play games, and they haven’t made a compelling case to choose them over Sony except for game pass which doesn’t include the top 20 most played games except for Minecraft and older sports titles.

 

[Dr. Nick]

I

That could very well kill things for them. Can’t have 70B in limbo for months on end.

The Xbox strategy has to proceed without it. VGAs were disastrous for them and will likely result in a post show dip in console sales. If they had nothing prepped because of regulatory this would be detrimental because you can’t do this forever. If you didn’t show anything because they have nothing this is detrimental. Cannot have 2 years of absolutely no content. The main reason to get onto a gaming platform is to play games, and they haven’t made a compelling case to choose them over Sony except for game pass which doesn’t include the top 20 most played games except for Minecraft and older sports titles.

Well it is definitely not closing before August and I'm not sure the FTC will back down even the EU disputes their argument. At this moment unless Microsoft can find someone sort of concession in the background that isn't a poison pill, it is up for the courts to decide when this deal is closing.

 

[BRiT]

I

Well it is definitely not closing before August and I'm not sure the FTC will back down even the EU disputes their argument. At this moment unless Microsoft can find someone sort of concession in the background that isn't a poison pill, it is up for the courts to decide when this deal is closing.

Not quite right. The FTC isn't moving to stop the deal from closing. If they were it would have filed an injunction in Federal Court.

 

[Dr. Nick]

Not quite right. The FTC isn't moving to stop the deal from closing. If they were it would have filed an injunction in Federal Court.

At least, according to Hoeg, the likelihood of this closing without the FTC accepting some kind of concession to drop their suit is slim to none. Hearing people say Microsoft/ABK could go ahead and close seemed to me that the deal would turn into a sword of Damocles. They could always lose in court. If these regulators fell for it, do we think the judges are much better? Since, as of right now, the FTC court case happens last on the schedule, if the EU and CMA allows the deal this will have to go to court first the FTC court before this deal can close, and who knows if that will be the last of it with the FTC.

 

[iroboto]

At least, according to Hoeg, the likelihood of this closing without the FTC accepting some kind of concession to drop their suit is slim to none. Hearing people say Microsoft/ABK could go ahead and close seemed to me that the deal would turn into a sword of Damocles. They could always lose in court. If these regulators fell for it, do we think the judges are much better? Since, as of right now, the FTC court case happens last on the schedule, this will have to go to court first the FTC court before this deal can close, and who knows if that will be the last of it with the FTC.

Concessions have been made. Whether they’ve gone far enough is hard to say. The last concession if CoD is the factor here is to guarantee it can come to PS+ day one as per game pass.

It may seem unfair; but if the move is to ultimately promote xcloud as the future of gaming it may still be a win even if it feels like a loss.

 

[BRiT]

At least, according to Hoeg, the likelihood of this closing without the FTC accepting some kind of concession to drop their suit is slim to none. Hearing people say Microsoft/ABK could go ahead and close seemed to me that the deal would turn into a sword of Damocles. They could always lose in court. If these regulators fell for it, do we think the judges are much better? Since, as of right now, the FTC court case happens last on the schedule, this will have to go to court first the FTC court before this deal can close, and who knows if that will be the last of it with the FTC.

The regulators did not fall for it, they opted to act based entirely on ideology. This is an ideological move from the FTC and is not backed by current court law. They are against any and all M&A. The Federal judges have to follow existing court law.

That FTC court case is within their own internal court system. It is not within the Federal Court system. After the FTC internal court system is done, it would then be appealed to Federal Court where Judges will have make decisions based on existing US Laws.

There is a difference between blocking the deal and not approving the deal. The FTC is not moving to block the deal because that would move them into Federal Court where existing laws do not favor them. The reason it doesn't matter for the FTC if they block it or not is they have retroactive powers, to go after M&A after they have completed.

 

[Dr. Nick]

Concessions have been made. Whether they’ve gone far enough is hard to say. The last concession if CoD is the factor here is to guarantee it can come to PS+ day one as per game pass.

I think that is one of the poison pills. Having the game on PlayStation, Nintendo, Steam, and other places but not other services like GamePass is part of how this deal pays for itself. 100% from the Xbox/Microsoft store and 70% of all transactions from everyone else.

 

[wco81]

Dec 9 Vergecast discusses the FTC action, about 45-50 minutes in.

The Vergecast Podcast

The Vergecast is the flagship podcast from The Verge about small gadgets, Big Tech, and everything in between. Every Friday, hosts Nilay Patel, David Pierce, and Alex Cranz hang out and make sense of the week’s most important technology news. And every Tuesday, David leads a selection of The...

www.theverge.com

Nilay Patel, former IP lawyer, notes that FTC is going to court to block Meta's acquisition of a VR startup which may potentially be the killer app for VR.

So by the same logic they used to oppose the Meta acquisition, they have to block this deal. Calls it a landmark case.

 

[mr magoo]

Dec 9 Vergecast discusses the FTC action, about 45-50 minutes in.

The Vergecast Podcast

The Vergecast is the flagship podcast from The Verge about small gadgets, Big Tech, and everything in between. Every Friday, hosts Nilay Patel, David Pierce, and Alex Cranz hang out and make sense of the week’s most important technology news. And every Tuesday, David leads a selection of The...

www.theverge.com

Nilay Patel, former IP lawyer, notes that FTC is going to court to block Meta's acquisition of a VR startup which may potentially be the killer app for VR.

So by the same logic they used to oppose the Meta acquisition, they have to block this deal. Calls it a landmark case.

So COD is killer app? All ps users dont care for god of war, last of us, uncharted, gran tourismo Horizon forbidden ... etc etc its only COD that matters?
Its flawed logic.

 

[wco81]

So COD is killer app? All ps users dont care for god of war, last of us, uncharted, gran tourismo Horizon forbidden ... etc etc its only COD that matters?
Its flawed logic.

No read it again.