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

[Deleted member 11852]

Yes but the action can only happen if the other actions happens, if that make sense. So in other words how do you regulate something if no other actions take place? If there is no major move from other OS manufacturer what they should do?

In the case of acquisitions, the requirements for seeking regulator approval are clear. Otherwise, you would only expect the regulator to step if predatory practises are either observed or reported.

"When competition works well, everyone benefits. "

So it dosent really matter how MSFT got there, the point is they are not market leader and are trying to stay more competitive. This is not about punishing Sony. People think that they earned this leader position and should not be unchallenged because they deserve it. Its not about favours either, its about creating environment which is good for competition.

I'm not following what you're saying here. This isn't about protecting Sony or pushing Microsoft, the assessment is entirely about the impact to various videogame industries, and whether as a consequence of the acquisition happening, they negatively impacts these industries in that there is less competition or less ability for new companies to enter and compete.

 

[iroboto]

Unless I misunderstand you, that is not the point of regulation.

Er...be more specific and accurate because I feel you your statement is missing a lot there about what regulators actually do.

It’s up to interpretation, I mean I'm quoting Star Trek here lol it's not meant to be too serious. Though I align with what MrMagoo wrote.

Regulation is there to ultimately help promote what’s best for consumers in terms of offering more value or making things more affordable etc.
I think it's predominantly clear that MS is trying whatever it can to compete, and other new entrants are currently dying off.
If regulation does not want the merger to proceed, they should be involved in regulating other parts of the industry in particular around content control to ensure that other competitors and new entrants have a chance that they can actually win if no mistakes are made.

Contrast this with Steam and Epic store. Steam is the main incumbent, and Epic is doing everything they can to gain marketshare. Steam has done absolutely nothing to block Epic in it's goal to gain more market share, and this would align with your original statement here

The point of regulation is to ensure companies with market influence don't abuse that power, it is not about trying to compensate or correcting the buying behaviour of the public.

And Steam haven't, so your statement holds true.

Whereas Sony clearly _is_ through it's content control practices, not to mention being the most vocal and active participant in the proceedings here - whereas I'm pretty sure Steam doesn't give any shits what Epic does.

If regulation can see the downfall of a merger, and they want better fair competition at the market level such that these mergers don't have to occur, then they should be regulating how content control is currently happening. Because as it stands what we are witnessing today with this merger, is the cost that regulators believe will be the amount to actually upheave Sony's dominant position at 70B, that should provide a price point for any new entrants or cloud entrants to break into market as long timed exclusivity, degraded content, and locked exclusivity continue to be a thing. Because if there was a cheaper and faster way to do this, MS should have accomplished it first before going this route.

MS has had it's hands slapped a great deal of many times for doing what Sony is engaging in, essentially skewing things in favour of the dominant platform to maintain dominance. MS became the dominant OS platform, but they stopped those types of moves a long time ago. They haven't been in regulatory scrutiny for some time.

TLDR; whenever I see the comment that 'MS Mistakes' are the reason it's number 3. What I'm reading between the lines is that their first party is the reason for their failure. But it fails to neglect the impact of exclusivity and content control places in the market. If you want it to actually be about the 'mistakes' of a platform, only by removing all content control practices, can platforms only compete on their services, their own first party IPs, and their hardware and pricing.

And that would be fair. And regulators should go this route, effectively only now being required to look at acquisitions which they can freely block going forward, knowing that platforms are required to do their own heavy lifting without having any influence over the 3rd party segment.

 

[Nesh]

It’s up to interpretation, I mean I'm quoting Star Trek here lol it's not meant to be too serious. Though I align with what MrMagoo wrote.

Regulation is there to ultimately help promote what’s best for consumers in terms of offering more value or making things more affordable etc.
I think it's predominantly clear that MS is trying whatever it can to compete, and other new entrants are currently dying off.
If regulation does not want the merger to proceed, they should be involved in regulating other parts of the industry in particular around content control to ensure that other competitors and new entrants have a chance that they can actually win if no mistakes are made.

Contrast this with Steam and Epic store. Steam is the main incumbent, and Epic is doing everything they can to gain marketshare. Steam has done absolutely nothing to block Epic in it's goal to gain more market share, and this would align with your original statement here

And Steam haven't, so your statement holds true.

Whereas Sony clearly _is_ through it's content control practices, not to mention being the most vocal and active participant in the proceedings here - whereas I'm pretty sure Steam doesn't give any shits what Epic does.

If regulation can see the downfall of a merger, and they want better fair competition at the market level such that these mergers don't have to occur, then they should be regulating how content control is currently happening. Because as it stands what we are witnessing today with this merger, is the cost that regulators believe will be the amount to actually upheave Sony's dominant position at 70B, that should provide a price point for any new entrants or cloud entrants to break into market as long timed exclusivity, degraded content, and locked exclusivity continue to be a thing. Because if there was a cheaper and faster way to do this, MS should have accomplished it first before going this route.

MS has had it's hands slapped a great deal of many times for doing what Sony is engaging in, essentially skewing things in favour of the dominant platform to maintain dominance. MS became the dominant OS platform, but they stopped those types of moves a long time ago. They haven't been in regulatory scrutiny for some time.

TLDR; whenever I see the comment that 'MS Mistakes' are the reason it's number 3. What I'm reading between the lines is that their first party is the reason for their failure. But it fails to neglect the impact of exclusivity and content control places in the market. If you want it to actually be about the 'mistakes' of a platform, thereby removing all content control practices, platforms can only compete on their services, their own first party IPs, and their hardware and pricing.

And that would be fair. And regulators should go this route, effectively only now being required to look at acquisitions which they can freely block going forward, knowing that platforms are required to do their own heavy lifting without having any influence over the 3rd party segment.

The regulators allow the market free. It is only in unique cases such us large merger/acquisitions or signs of undiserable practices that they intervene.

They are not constantly checking who is first and who is last and holding hands to even things out. They are not going to break businesseses hoping to allow small players in.
Some of us tend to interpret the market based on own personal impressions but thats not how it works. MS, Sony and Nintendo are natural oligopolies and where they are, it is according to more or less "normal" business operations.

I get some want MS to step up and compete and find it unfair where they are, but thats personal opinion. Where they are is simply a combination of their own doing and what the market prefers. MS has more than enough resources to participate in the market and they are doing very well. Feeling sorry for MS and wanting to have special favors, because nobody else can enter, doesnt make sense. First of all in absolute terms, they are doing very well in the market. Its only in relation to Sony and Nintendo that personal feelings come in and dont like that they are third. And secondly if a mega corporation like MS, that has billions of cash, own huge tech infrastructires, have the biggest business networks and most capable employees internationally at some point dont compete adequately, its purely their fault. They already have more than enough to compete and own a huge portion of the market.

The regulators aren't simply concerned about the console market, and like what MS said, the acquisition has goals beyond it. So the console market, outside of our own interests, holds much less significance compared to the bigger picture that the regulators are investigating.

 

[Deleted member 11852]

It’s up to interpretation, I mean I'm quoting Star Trek here lol it's not meant to be too serious. Though I align with what MrMagoo wrote.

It's not up to interpretation at all. Certainly the roles of the UK and EU regulation is clearly stated in law. Which parts of the legislation do you believe to be down to interpretation?

Regulation is there to ultimately help promote what’s best for consumers in terms of offering more value or making things more affordable etc.

No, it's not. In the UK and EU, this type of regulation is there to prevent abuse of market position and to assess mergers for market impact and any reduction in competition as may happen a company buys a competitor. There is nothing more to it than that.

It is absolutely not about "more value" or "making things more affordable" other than these are symptoms of any market that lacks healthy competition. Your view of the regulation utterly bewilders me.

If regulation can see the downfall of a merger, and they want better fair competition at the market level such that these mergers don't have to occur, then they should be regulating how content control is currently happening.

This statement right here tells me you have no idea what the regulator's role is. This is nonsense, and this is not what the regulator's role is. Again, it is not up to the regulators to decide what is best for consumers, a free market is best for consumers and the regulator's power are limited to intervening only in cases of abuse or where there is a risk of less competition. An already large publisher (Microsoft) buying another large publisher (Activision-Blizzard) is one such scenario.

How markets operate - which is what you are talking about - is not within the remit of regulators. It is not the regulators role to help Microsoft compete where it feels it cannot. Microsoft has been in this market for over 20 years and is clearly competing, what Microsoft need to do is appeal to a wider base of consumers like Nintendo and Sony.

 

[eastmen]

This statement right here tells me you have no idea what the regulator's role is. This is nonsense, and this is not what the regulator's role is. Again, it is not up to the regulators to decide what is best for consumers, a free market is best for consumers and the regulator's power are limited to intervening only in cases of abuse or where there is a risk of less competition. An already large publisher (Microsoft) buying another large publisher (Activision-Blizzard) is one such scenario.

How markets operate - which is what you are talking about - is not within the remit of regulators. It is not the regulators role to help Microsoft compete where it feels it cannot. Microsoft has been in this market for over 20 years and is clearly competing, what Microsoft need to do is appeal to a wider base of consumers like Nintendo and Sony.

You mean alleged abuse . Since no one has actually proven there would be any abuse with Microsoft buying Activision. None of the regulators have proven anything .

You say that What microsoft needs to do is appeal to a wider base of consumers like Nintendo and Sony are doing. Sony is doing so by buying up developers and that is exactly what MS would be doing with buying Activision. With regulators stepping in they are doing exactly what you are saying they shouldn't be doing which is helping sony stay dominate.

Some of these regulators like the CMA are saying that MS's purchase of activision would ultimately drive up costs for consumers but of course we already see that it was Sony's continued market dominance that has driven prices up. Sony was the first this generation to raise game prices to $70 and raised prices of their already released consoles in many markets. Sony's continual purchasing of developers and exclusivity deals are negating Ms's ability to compete and now regulators are stepping in to further limit MS's ability to compete. Perhaps if regulators like the CMA are concerned about the health of the industry they should be breaking apart Sony ?

 

[eastmen]

Opinion | Why I’m Resigning as an FTC Commissioner

Lina Khan’s disregard for the rule of law and due process make it impossible for me to continue serving.

www.wsj.com

FTC seems extremely dysfunctional

 

[iroboto]

It's not up to interpretation at all. Certainly the roles of the UK and EU regulation is clearly stated in law. Which parts of the legislation do you believe to be down to interpretation?

I'm talking about the Star Trek clip. It's up to interpretation if MS has or has not been making mistakes for their reason of being third, that is the context.

No, it's not. In the UK and EU, this type of regulation is there to prevent abuse of market position and to assess mergers for market impact and any reduction in competition as may happen a company buys a competitor. There is nothing more to it than that.

What is currently being assessed is the merger. I'm talking about going beyond the merger:

United Kingdom competition law is affected by both British and European elements. The Competition Act 1998 and the Enterprise Act 2002 are the most important statutes for cases with a purely national dimension. However, if the effect of a business' conduct would reach across borders, the European Commission has competence to deal with the problems, and exclusively EU law would apply. Even so, the section 60 of the Competition Act 1998 provides that UK rules are to be applied in line with European jurisprudence. Like all competition law, that in the UK has three main tasks.

• prohibiting agreements or practices that restrict free trading and competition between business entities. This includes in particular the repression of cartels.
• banning abusive behaviour by a firm dominating a market, or anti-competitive practices that tend to lead to such a dominant position. Practices controlled in this way may include predatory pricing, tying, price gouging, refusal to deal and many others.
• supervising the mergers and acquisitions of large corporations, including some joint ventures. Transactions that are considered to threaten the competitive process can be prohibited altogether, or approved subject to "remedies" such as an obligation to divest part of the merged business or to offer licences or access to facilities to enable other businesses to continue competing.

The question boils down to are exclusionary practices considered anti-competitive from the FTC:

Exclusive Supply or Purchase Agreements

Exclusive contracts can benefit competition in the market by ensuring supply sources or sales outlets, reducing contracting costs, or creating dealer loyalty.

www.ftc.gov

Exclusive supply contracts prevent a supplier from selling inputs to another buyer. If one buyer has a monopoly position and obtains exclusive supply contracts so that a newcomer may not be able to gain the inputs it needs to compete with the monopolist, the contracts can be seen as an exclusionary tactic in violation of Section 2 of the Sherman Act. For example, the FTC stopped a large drug maker from enforcing 10-year exclusive supply agreements for an essential ingredient to make its medicines in return for which the suppliers would have received a percentage of profits from the drug. The FTC found that the drug maker used the exclusive supply agreements to keep other drug makers from the market by controlling access to the essential ingredient. The drug maker was then able to raise prices for its medicine by more than 3000 percent.

Exclusive purchase agreements, requiring a dealer to sell the products of only one manufacturer, can have similar effects on a new manufacturer, preventing it from getting its products into enough outlets so that consumers can compare its new products to those of the leading manufacturer. Exclusive purchase agreements may violate the antitrust laws if they prevent newcomers from competing for sales. For instance, the FTC found that a manufacturer of pipe fittings unlawfully maintained its monopoly in domestically-made ductile iron fittings by requiring its distributors to buy domestic fittings exclusively from it and not from its competitors, who were attempting to enter the domestic market. The FTC found that this manufacturer's policy foreclosed a competitor from achieving the sales needed to compete effectively.

Who was the first company to raise game prices and console prices?
I'm not saying Sony is breaking any laws yet. But I'm not seeing how consumers across the industry are benefitting from third party content exclusivity.

Here's the biggest difference between the CMA and FTC. FTC can go to court over this merger and the CMA cannot. So the CMA will never really know what's going on in the industry behind closed doors because it's Microsoft that's being investigated here, the non-dominant market leader, and not Sony who is the dominant market leader. Unless they decide to investigate it themselves.

Do I actually care if it happens?
No. I don't care what the regulators do honestly. I don't, so let's not make it about that.

But if everyone is going to throw out some grand reasons as to why MS is failing to achieve market success, I'm totally allowed to pressure test those claims versus what's actually out there and what steps MS has taken so far to remediate them. Sure it's a little confuddled with talks if it should be allowed or not. But that's the main context behind my points. If people are just going to point at MS and say, hey they have money, they can just bully people around, then I'd ask as a shareholder, why not do things for significantly cheaper first.

Because, personally I don't appreciate the fact that they are going to spend 70B on ABK, whatever their plan is, it's better make some more fucking sense than just beating Sony - and I'd rather they do this at a much more cost effective manner, but I also believe in Occam's razor, in which, if this is the most straightforward and effective way to achieve that goal (70B) , wtf. Then that needs to be looked at.

 

[Deleted member 11852]

United Kingdom competition law is affected by both British and European elements. The Competition Act 1998 and the Enterprise Act 2002 are the most important statutes for cases with a purely national dimension. However, if the effect of a business' conduct would reach across borders, the European Commission has competence to deal with the problems, and exclusively EU law would apply. Even so, the section 60 of the Competition Act 1998 provides that UK rules are to be applied in line with European jurisprudence. Like all competition law, that in the UK has three main tasks.

I'm struggling to know where even start to here. The two Acts you mention are the basis for competition law in the UK, but Brexit must have passed you by, i.e. §60 of the Competition Act 1998 was revoked [UK National Archives updated version of the Act] by it's accompanying EU Exit regulation when the UK left the EU. So ignore EU law in the UK outside of Northern Ireland, and how the Northern Ireland Protocol dictates EU law applies.

You've quoted a Wikipedia article that has not been updated, which is evident by it referring to §60 of the 1998 Act which no longer exists.

The question boils down to are exclusionary practices considered anti-competitive from the FTC:

I know very little about the FTC process or law but I know 100% that is has no basis in law in the EU or UK. This is why I am only commenting on EU and UK legislation. You've mixing them all together as though they are equivalent, which they aren't.

Who was the first company to raise game prices and console prices? I'm not saying Sony is breaking any laws yet. But I'm not seeing how consumers across the industry are benefitting from third party content exclusivity.

And here you go off the reservation because one company raising prices is not a matter for the regulators. Prices of certain commodities, like energy, telecoms and water, are regulated by utility regulators, not market competition regulators. What you are posting is irrelevant. If one company (Sony), in a competitive market, puts prices up then the market (consumers) will decide whether those prices are fair - that is the literal definition of a free market. It is absolutely not a matter for the competition regulator.

Here's the biggest difference between the CMA and FTC. FTC can go to court over this merger and the CMA cannot. So the CMA will never really know what's going on in the industry behind closed doors because it's Microsoft that's being investigated here, the non-dominant market leader, and not Sony who is the dominant market leader. Unless they decide to investigate it themselves.

The EU and UK CMA processes do not require going to court. My understanding of the FTC profess is that they have too, because US regulation is implemented as a legal process (the FTC is part of the judiciary, no?). The norm for regulation in both the EU and the UK is that regulation is a matter for civil authorities, but these authorities still have the legal powers to control, approve, deny acquisitions as well as prevent trading and seizure of assets. As I said above, you don't seem to be aware that the UK/EU processes are very different to the US process yet both the EU and UK CMA can require disclosure of documents (which the CMA have published in redacted form).

Please stop pasting walls of text, it's clear you're not understanding what you're posting.

 

[Nesh]

Not to mention that the price increases were announced first by third parties due to higher development costs. There is no basis that Sony increased their price due to being a market leader either.
Nintendo's games were even more expensive before Sony and MS. And MS also announced price increases due to increased costs. A company that has better liquidity and can cover their liabilities better than Sony.
A lot of these arguments trying to paint Sony as a monopoly that increases artificially costs for consumers are just made up assumptions, immature and ignore facts to discredit the role of the regulators.

 

[mr magoo]

Not to mention that the price increases were announced first by third parties due to higher development costs. There is no basis that Sony increased their price due to being a market leader either.
Nintendo's games were even more expensive before Sony and MS. And MS also announced price increases due to increased costs. A company that has better liquidity and can cover their liabilities better than Sony.
A lot of these arguments trying to paint Sony as a monopoly that increases artificially costs for consumers are just made up assumptions, immature and ignore facts to discredit the role of the regulators.

Well Sony did raised price for their games becouse they could, they also raised price for consoles only in the marked where they are a clear leader like eu and japan and not in US.

"A lot of these arguments trying to paint Sony as a monopoly that increases artificially costs for consumers are just made up assumptions, immature and ignore facts to discredit the role of the regulators."

Come one this is a friendly discussion

 

[eastmen]

Because, personally I don't appreciate the fact that they are going to spend 70B on ABK, whatever their plan is, it's better make some more fucking sense than just beating Sony - and I'd rather they do this at a much more cost effective manner, but I also believe in Occam's razor, in which, if this is the most straightforward and effective way to achieve that goal (70B) , wtf. Then that needs to be looked at.

1) Make billions using COd / wow and other established titles

2) use A/B to increase value of xbox / game pass

3) use king and mobile versions of activision/blizzard / ms games to make MS's mobile store fronts more inciting to users .

Use the synergy of all 3 together to continue raising the amount of money MS makes

 

[Deleted member 11852]

Well Sony did raised price for their games becouse they could, they also raised price for consoles only in the marked where they are a clear leader like eu and japan and not in US. "A lot of these arguments trying to paint Sony as a monopoly that increases artificially costs for consumers are just made up assumptions, immature and ignore facts to discredit the role of the regulators."

Yeah, Sony raised prices of both games and the console - which was somehow behind the rise on the inflation given how long $60 had been the norm. Whilst nobody likes paying more for anything than they have too, it's not something that triggers any regulation that I'm aware of in the UK or EU. Any more than bread costing more today than it did last month, six months or twelve months ago.

 

[chris1515]

Yeah, Sony raised prices of both games and the console - which was some behind the rise on the inflation given how long $60 had been the norm. Whilst nobody likes paying more for anything than they have too, it's not something that triggers any regulation that I'm aware of in the UK or EU.

They rise the price of consoles because they had no choice because of currency crisis and they don't have tons of money from other activity to be able to keep the price of console the same out of US.

 

[mr magoo]

Yeah, Sony raised prices of both games and the console - which was somehow behind the rise on the inflation given how long $60 had been the norm. Whilst nobody likes paying more for anything than they have too, it's not something that triggers any regulation that I'm aware of in the UK or EU. Any more than bread costing more today than it did last month, six months or twelve months ago.

yeah my reply was an observation to what Nesh said

"There is no basis that Sony increased their price due to being a market leader either."

While i am fully aware of rising costs of living, sony didn't raise the costs of console units in US. Th only market where they are fighting with xbox more aggressively. Wich in the end comes to discussion about competition being beneficial to us consumers. But the price hike was probably justified and perhaps we will get even more of that.

 

[chris1515]

yeah my reply was an observation to what Nesh said

"There is no basis that Sony increased their price due to being a market leader either."

While i am fully aware of rising costs of living, sony didn't raise the costs of console units in US. Th only market where they are fighting with xbox more aggressively. Wich in the end comes to discussion about competition being beneficial to us consumers. But the price hike was probably justified and perhaps we will get even more of that.

There is a currency crisis. Apple rise the price of some product out of US too. Sony told it too when they rise price of consoles.

Why Apple raised the price of the iPhone, but not in the U.S. and China

Apple's newest iPhones came with price increases in some countries but not the U.S. due to the impact of a strong U.S. dollar and currency headwinds.

www.cnbc.com

“Essentially every currency around the world has weakened against the dollar,” Apple CFO Luca Maestri said on the company’s fourth-quarter earnings call with analysts last week. “The strong dollar makes it difficult in a number of areas. Obviously, our pricing in emerging markets makes it difficult, and the translation of that revenue back into dollars is affected.”

 

[mr magoo]

There is a currency crisis. Apple rise the price of some product out of US too. Sony told it too when they rise price of consoles.

Why Apple raised the price of the iPhone, but not in the U.S. and China

Apple's newest iPhones came with price increases in some countries but not the U.S. due to the impact of a strong U.S. dollar and currency headwinds.

www.cnbc.com

sure i am not denying it. If i remember correctly even msft said they will raise prices as well eventually.

 

[chris1515]

sure i am not denying it. If i remember correctly even msft said they will raise prices as well eventually.

Sony did it immediately because they have less money than MS and this is the reason they can't buy a publisher 70 billions too.

 

[mr magoo]

Sony did it immediately because they have less money than MS and this is the reason they can't buy a publisher 70 billions too.

Sure, maybe rising console prices in the markets where they are a clear leader only is just a coincidence and was a part of a plan.
I got new basket ball to my son and next day a neighbour comes and say there is a hole in his glass window and my son is guilty.
Now this could be a coincidence but i am pretty sure he did it.
Anyway i think the price hike was unavoidable anyway and xboxes will see price rise soon as well as gamepass.

 

[chris1515]

Sure, maybe rising console prices in the markets where they are a clear leader only is just a coincidence and was a part of a plan.
I got new basket ball to my son and next day a neighbour comes and say there is a hole in his glass window and my son is guilty.
Now this could be a coincidence but i am pretty sure he did it.
Anyway i think the price hike was unavoidable anyway and xboxes will see price rise soon as well as gamepass.

Again raising the price of console is normal because of the strong dollar. There are absolutely no reason to do differently. If Sony had other activity where they made tons of money maybe they would have delayed this but this is not the case. This is not sustainable for Sony.

 

[eastmen]

Sony did it immediately because they have less money than MS and this is the reason they can't buy a publisher 70 billions too.

Yet they were able to loose money on the PS5 at launch to gain market share quickly.

PS5 Broke Even and Started to Turn Profit for Sony

Sony has confirmed that the standard version of PlayStation 5 broke even. So the Japanese company has reasons to be happy.

www.gamepressure.com

In 2021 they were even turning a profit on hardware. So no one can say its just based on currency. They were willing to loose money to head off MS having a higher installed base in the new gen. Now that the threat is gone they are willing to raise prices to preserve the profit