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

[Deleted member 11852]

That didn't have any impact on the acquisitions over the past 4-6 months by Chinese companies, which that act was mostly tailored towards. It's at a point where if it isn't the military or state owned company it doesn't seem like it makes any difference.

Which Chinese acquisitions? FEFTA has a prescribed list of characteristics and in some cases, named companies, but it's not any acquisitions, it is only those seen to be relevant to Japanese culture, national security or CNI.

 

[BRiT]

Which Chinese acquisitions?

Let me find the specifics. From my very hazy and fuzzy memories they were smaller gaming companies acquired by Tencent.

 

[eastmen]

That didn't have any impact on the acquisitions over the past 4-6 months by Chinese companies, which that act was mostly tailored towards. It's at a point where if it isn't the military or state owned company it doesn't seem like it makes any difference.

The way this time line went as I understand it is this

1) Activision realized it was in the shit and decided to sell as a pay day and get out of jail card.
2) They went to facebook and other companies.
3) They then went to MS

So in this instance MS would have known activision was trying to sell it. If trecent came in between step 1 and 2 ms wouldn't have known anything unless acitivsion wasn't happy with the offer and went some where else.

 

[Johnny Awesome]

You're making a good point, and I definitely think the console side is going to benefit greatly, but I still think PC is a huge part of this deal.

 

[BRiT]

Which Chinese acquisitions?

Copied from Tencent acquisition thread @ https://forum.beyond3d.com/posts/2229047/

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https://www.bloomberg.com/news/arti...game-studio-behind-hit-nintendo-switch-titles

Tencent Buys Game Studio Behind Hit Nintendo Switch Titles

The Shenzhen-based entertainment giant has taken about a 90% stake in Wake Up Interactive Ltd. for more than 5 billion yen ($44 million), the people said, asking not to be identified because the transaction is not yet public. Wake Up owns Tokyo-based Soleil Ltd., which developed Nintendo Switch hit Ninjala and helped create Travis Strikes Again: No More Heroes. Taking over almost the entire company is unusual for Tencent in Japan, which has so far made smaller investments and mainly aimed to secure international publishing rights for future games


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Additional moves by Tencent in Japan @ https://finance.yahoo.com/news/tencent-acquires-stake-japanese-creative-135055522.html

• Tencent and NetEase Inc (NASDAQ: NTES) hired fresh talent in Japan over the past two years to acquire valuable intellectual property in anime and video games and decrease their revenue dependence on the domestic China market.
  
  
• In October, Kadokawa Corp (OTC: KDKWF) admitted Tencent plans to pay 30 billion yen for a 6.86% stake in the publishing company.
  
  
• The two Chinese game titans have also acquired or taken a stake in numerous smaller Japan-based game developers.

 

[Deleted member 11852]

Let me find the specifics. From my very hazy and fuzzy memories they were smaller gaming companies acquired by Tencent.

Sure, and that's the differentiation FEFTA makes. Japanese culture is not eroded because somebody bought San Pai's noodle stand in Tokyo. SEGA and Capcom, and a number of other Japanese games companies are viewed differently because they have been around a long time. Nintendo were established in the 1800s but nobody cared until the 1980s the they became very culturally relevant.

 

[Deleted member 7537]

I mean that's peanuts, 5? 30? billion yen. Capcom alone is worth 600 billion.

 

[PSman1700]

How is platform agnostic gaming relevant to such extreme buyouts that promotes monopolies? Why is it a requirement? And why.do we ignore how it over shifts the landscape in the hands of one conpany

Well, its no different to what Sony does. just that MS can swing much harder, thats all. Sony invested in EPIC for 250m not long ago, they also buy studios here and there whenever they can (Housemarque one of the latest), and put their games on their console and pc, exclusive content, delayed releases for xbox etc. MS does the same thing but they have much more resources so they eventually will eat much more of the market.
Atleast MS doesnt go hard on keeping everything as far away from the competitors console as much as possible. I cant blame them if they are starting with that aswell.
Its good to be on the PC, its sorta the middle-land, like Alex/DF noted, its not so much a problem for those users, instead your getting stuff from both sides. Its one of the reasons i think MS is ahead of the times in that regard, platform exclusivity (something restricted to a certain hardware box) isnt going to exist for that much longer. Even Sony themselfs are expanding to other platforms as of late, quite much hardcore so.

Consoles historically sell around the 100 million mark on average at most, aside the PS2 which had a ultra long life span, that doesnt seem to change be it PS3, PS4 or the PS5 (were 1.5 year in almost already there). You cant continue with just that in the ever-exploding gaming/entertainment market.

@techuse When I look at Microsoft's gamese, I don't really see pattern of micro-transaction heavy games. State of Decay, Forza, Gears, Gears Tactics, Ori, Age of Empires, Tell Me Why, Psychonauts 2, Grounded, Flight Simulator, Halo, Halo Wars, Super Lucky's Tale, Sea of Thieves. A few of thieves have skins for PvP multiplayer, like Gears 5 and the Halo Infinite free-to-play multiplayer. I really don't see a pattern of building super micro-transaction heavy games. Halo Infinite free-to-play mp is obviously build directly around micro-transaction. That's probably the worst offender. The rest seem pretty bog standard. I'm guessing games like Wasteland 3 don't have microtransactions and future inXile games won't. I'm guessing Ninja Theory games won't have them. Bethesda games like fallout might have as much as they've ever had. I don't see any reason to be concerned that Microsoft is going to force any studios to change their directions and start building games that are micro heavy revenue generators. If anything, I hope they'll give more studios the freedom to make something other than COD, and we'll actually get some unique stuff.

Agree with you, MS has really been getting better and better in the gaming world, while Sony is the other way around (less and less AAA exclusives, slower pace, expanding to the PC), their not the same anymore.

MS should consider acquiring as much as they can get away with, but Square, Sega, and Capcom seem like the most bang for the buck to me.

I dont know if any of those have so much value in the gaming market these days. MS basically has everything important to the general audience now. Maybe some smaller studios could be intresting to MS, to join the team at MS studios.

 

[Deleted member 11852]

Copied from Tencent acquisition thread @ https://forum.beyond3d.com/posts/2229047/
https://www.bloomberg.com/news/arti...game-studio-behind-hit-nintendo-switch-titles

The Shenzhen-based entertainment giant has taken about a 90% stake in Wake Up Interactive Ltd. for more than 5 billion yen ($44 million), the people said, asking not to be identified because the transaction is not yet public. Wake Up owns Tokyo-based Soleil Ltd.

There you go. A company that has existed since 2008 is not culturally relevant. This kind of post happens every time the Microsoft buying decades-old Japanese video game companies is posted.

I question every day why I even post here.

 

[cheapchips]

You're making a good point, and I definitely think the console side is going to benefit greatly, but I still think PC is a huge part of this deal.

Even if MS can get Game Pass on Sony or Nintendo hardware, it's a market that has stayed around 300m devices (to date). MS want subscribers beyond that limited pool. That means not just PC but mobile and smart TV.

 

[Lurkmass]

Are people here seriously contemplating that Activision will somehow concentrate less on their flagship first person shooter franchise after the acquisition ? I think some people need to take a deeper look into why Activision placed a lot of their studios to work on a franchise with annualized releases in the first place ...

The last Starcraft game released over a decade ago with it's last paid content update being years ago ...
It's been almost ten years since the last iteration of the Diablo franchise ...
When will Overwatch see another release again after it's upcoming sequel is finished ?
While there has been resparked interest over Crash and Spyro but who knows when they'll get their next turn at a new iteration ?

The reason why Activision assigned so many studios for CoD is because they simply have no choice not to do so. How much more intensive do people think Activision can make release schedules for other franchises without over saturating them while consistently maintaining high quality releases for them ? I would not be surprised to find out that their staples like CoD, WoW, and Candy Crush were subsidizing the development of the aforementioned franchises ...

Why even provoke the thought of jeopardizing billions of dollars on the line ? Not focusing on CoD would be financially irresponsible on Microsoft's part since it's Activision's most stable and consistently performing franchise by far. Now that Activision has a far lower revenue potential since they have fewer platform vendors to sell their content on, what's going to happen to the other franchises if either one of their staples falters even further ?

 

[Deleted member 7537]

Are people here seriously contemplating that Activision will somehow concentrate less on their flagship first person shooter franchise after the acquisition ? I think some people need to take a deeper look into why Activision placed a lot of their studios to work on a franchise with annualized releases in the first place ...

The last Starcraft game released over a decade ago with it's last paid content update being years ago ...
It's been almost ten years since the last iteration of the Diablo franchise ...
When will Overwatch see another release again after it's upcoming sequel is finished ?
While there has been resparked interest over Crash and Spyro but who knows when they'll get their next turn at a new iteration ?

The reason why Activision assigned so many studios for CoD is because they simply have no choice not to do so. How much more intensive do people think Activision can make release schedules for other franchises without over saturating them while consistently maintaining high quality releases for them ? I would not be surprised to find out that their staples like CoD, WoW, and Candy Crush were subsidizing the development of the aforementioned franchises ...

Why even provoke the thought of jeopardizing billions of dollars on the line ? Not focusing on CoD would be financially irresponsible on Microsoft's part since it's Activision's most stable and consistently performing franchise by far. Now that Activision has a far lower revenue potential since they have fewer platform vendors to sell their content on, what's going to happen to the other franchises if either one of their staples falters even further ?

Yeap, it's called ROI. Yearly CODs is part of the equation, that's not slowing down.

 

[Deleted member 11852]

Yeap, it's called ROI. Yearly CODs is part of the equation, that's not slowing down.

The I of RoI is investment which is almost $70bn. Activision-Blizzard actual profits are around $1.5bn a quarter selling on all platforms.

So.. umm.. math?

 

[Deleted member 7537]

The I of RoI is investment which is almost $70bn. Activision-Blizzard actual profits are around $1.5bn a quarter selling on all platforms.

So.. umm.. math?

Math goes -> we adquire publishers -> add them to gamepass -> remove games from other stores -> lock consumers to gamepass -> increase gamepass price. Walled garden? the ecosystem? Apple invented all of this 10 years ago.

Right now MS Gaming has a deficit larger than the French goverment.

edit: and if you manage to get the market down to two players, you get 1000 dollar phones.

 

[Deleted member 11852]

Math goes -> we adquire publishers -> add them to gamepass -> remove games from other stores -> lock consumers to gamepass -> increase gamepass price. Walled garden? the ecosystem? Apple invented all of this 10 years ago.

This isn't math, this is rambling nonsense.

 

[iroboto]

Are people here seriously contemplating that Activision will somehow concentrate less on their flagship first person shooter franchise after the acquisition ? I think some people need to take a deeper look into why Activision placed a lot of their studios to work on a franchise with annualized releases in the first place ...

The last Starcraft game released over a decade ago with it's last paid content update being years ago ...
It's been almost ten years since the last iteration of the Diablo franchise ...
When will Overwatch see another release again after it's upcoming sequel is finished ?
While there has been resparked interest over Crash and Spyro but who knows when they'll get their next turn at a new iteration ?

The reason why Activision assigned so many studios for CoD is because they simply have no choice not to do so. How much more intensive do people think Activision can make release schedules for other franchises without over saturating them while consistently maintaining high quality releases for them ? I would not be surprised to find out that their staples like CoD, WoW, and Candy Crush were subsidizing the development of the aforementioned franchises ...

Why even provoke the thought of jeopardizing billions of dollars on the line ? Not focusing on CoD would be financially irresponsible on Microsoft's part since it's Activision's most stable and consistently performing franchise by far. Now that Activision has a far lower revenue potential since they have fewer platform vendors to sell their content on, what's going to happen to the other franchises if either one of their staples falters even further ?

Once again, that's the reason why games have been homogenizing for some time now. Gamers are asked to commit to a $80 purchase for a game. That squeezes out a lot of titles and risk taking.
Game Pass doesn't have that problem because players who subscribe are free to play any game on the service.

Just because Call of Duty sells the most, it does not make it a better game than the other titles that died out, it just makes it a safer bet for players who don't know where to place their money. It's a mainstream title for a specific demographic of players. There are certainly a lot of other games out there that could be every bit as successful in other audiences, but no one will make them because everyone is fighting over the same slice of the pie repeatedly.

AAA - Homogenous, Safe, Lack any real personality, nothing really different but to add a different story and improve graphics. That's what CoD is to me. Safe for players, safe for studios.

If you are trying to run a subscription service, you don't want homogenous, safe, and lacking personality. You want the opposite, you want the gamers to try as many different games as possible, you are trying to appeal to as many audiences as possible and hopefully fund that next marquee title that takes the gaming industry by storm. You can't do that by playing it safe.

That's what Activision was struggling with. They could only make decent profits with CoD, so that's where they put all their money. They couldn't take risks and not get penalized for it.

Look at the state of World of Warcraft. They kept making it easier and easier that it got too easy and everyone left.. So they released World of Warcraft Classic to just reboot the entire timeline and they are going through it again. If this isn't a sign the model isn't working, I don't know what is.

 

[Deleted member 7537]

This isn't math, this is rambling nonsense.

Doesn't mean gamepass is exclusive to windows or xbox. Or at least that's the idea. And I can't think of any other better way to gain money in this industry than to control the distribution of the software.

My guess is that in a few years you'll have:
- Basic gamepass: basic games, no new major releases until 6-9 months.
- Premium gamepass: all games day 1, basic cosmetic content, no dlcs.
- Super premium gamepass: all games day 1, dlc, etc.

All with xcloud included. But feel free to explain what business model makes sense to you.

 

[Deleted member 11852]

Doesn't mean gamepass is exclusive to windows or xbox. Or at least that's the idea. And I can't think of any other better way to gain money in this industry than to control the distribution of the software.

Making money is relative to the investment - the RoI from your earlier post.. We know what Microsoft are spending, we have no idea what - if anything - Microsoft is making in profits. What is the goal? What is the strategy for converting investment into profit? How long will it take Microsoft to recoup their Zenimax and to-be-approved Activision-Blizzard Acquisitions? That's closing on $80Bn in the past few years.

What is a successful business model you ask? I don't know, but Sony and Nintendo seem to be doing really well without spending almost a tenth of a trillion dollars. Their profits are transparent in their financial reports. I mean... WTF.

 

[iroboto]

How long will it take Microsoft to recoup their Zenimax and to-be-approved Activision-Blizzard Acquisitions? That's closing on $80Bn in the past few years.

Technically they don't have to recoup it. Both AB and Zenimax are assets and not expenses. If they sold Zenimax tomorrow it could sell for greater than 8B if Starfield has explosive growth. It's not absolutely necessary that they recoup the cost all that soon. You buy a house/flat and you rent it out. It's not necessary that the rent pay the entire mortgage back right away. Because if you are desperate you can still sell the house for more than you likely bought it at and you profited from the rent.

All MS technically has to do, is improve zenimax and AB to increase their value for more than they paid for it on top of the sales produced. Which is arguably the tougher part of the job if all the developers are bailing to start their own studios.

tldr; ROI is % growth of the market cap of the studio during ownership + sales.

5 years ago 2017 - ACTV was $40. Today it's $80. And not long ago before the scandals it was sitting over $100, then dropped to $57 in which they started shopping AB out to MS. After the acquistion news came out, a sky rocket to 80. That's already growth possibly from the time they signed the deal to purchase at some share price.

In any event 2017 to 2022 - That's 40B in growth in 5 years.
They certainly didn't do 40B in profits in 5 years. So there's a lot of wiggle room on how they want to re-coup their investment, or what defines re-couping their investment. I think a lot of people have been looking at it purely as a sales play, but that's not the case when it comes A&Ms

 

[ChuckeRearmed]

I'd expect EA and Ubisoft to be promiscuous

Which is funny considering that EA and Ubisoft are cozy with Microsoft too.

Invest a fraction of that money to make Microsoft employees terms and conditions so much better that would make creatives working for other companies flock to Microsoft.

I am pretty sure MS is one the best employers out there. And devs on Twitter praise MS and a lot of activision devs and current xbox employees are happy.

You keep harping on the bs narrative of no return for decades

ATVI profits or revenue did not even probably matter. I mean, even if they make 4b in profit over a year when MS makes 60b profits yearly? It was a strategical investment for a much bigger picture.