Microsoft acquired Activision Blizzard King for $69 Billion on 2023-10-13
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Deleted member 11852
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It's not about where individual studios are, it's where companies are established to sell products, collect revenue and pay tax. The UK is the single largest revenue source country for videogames in Europe. And let's not forget that when it comes to mergers and acquisitions, Europe is far from a single regulatory territory. For countries within the EU, there is the central EU process and many countries (France, Germany, Italy. Spain, Netherlands) have their national regulator as well. I don't think of these have ruled yet.
I think the unsaid implied message that everybody is missing, and which many Governments have been airing for a while, is that some big tech is too big. Whilst the primary reason for rejection here was because of cloud gaming, in part this is also because of all the advantages that Microsoft inherently have because they are the biggest of big tech. Microsoft are the third largest cloud service provider in the world, the dominant proprietary operating system vendor in the world, the largest software publisher in the world, an impossibly unshakable advantage in what is still an emergent, developing cloud market.
Cloud gaming has failed to set the world on fire largely because of the combined technical barriers of latency and bandwidth, and these will be solved problems in the near future. After which the cloud gaming markets will be in a technical place where competition can actually begin. Thus far, in market terms, it's been small scale experimentation and market creation.
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Deleted member 11852
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@BRiT shocking that Boosteroid, a company partnered with Microsoft oppose this. 
I look forward to tweets from LinkedIn, and every other company partnered with Microsoft who Microsoft will have been calling all afternoon to express shock and disappointment.
I look forward to tweets from LinkedIn, and every other company partnered with Microsoft who Microsoft will have been calling all afternoon to express shock and disappointment.
Because of language barriers and different legal ways of doing things, that's probably not true. UK to NA can largely preserve culture and methods. UK to a European nation will need adapt a fair bit, I think. Oh, Ireland is also a nice option, an interim between the UK and EU. I expect Ireland to do well out of the UK#s demise. And then there's future Scotland when they ditch the Union because its government is Shit, but we're stuck with it because democracy and politics is plain broken. Although cost of health-care for staff in Scotland might be quite high given poor average health.
Isn't that the 10 year deal brokered to circumvent Cloud Gaming concerns? Why would Boosteroid agree to MS being blocked after agreeing a 10 year deal would be adequate to negate MS's cloud advantages? It'd be two-faced for Boosteroid to agree to the deal and then want MS blocked!
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Deleted member 11852
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I guess it depends how you look at it. It feels like Microsoft made zero effort to play nice until the regulatory scrutiny was tuned up to 11, which is an observation made by the EU regulator as well. If Microsoft only play nice when under regulatory scrutiny or coercion, these short relatively term agreements are not really a sign of good faith. Not over the longterm given the prospects of these markets.
10 years is short?
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Deleted member 11852
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When you are a trillion dollar tech company driven by investor dollars? Yeah, ten years is short.
Microsoft was founded in 1975 and have been in the market 48 years. They have made more money in the last eight years, than the previous forty. Amazon, Apple and Google are very much the same. Wealth and market dominants gains tremendous inertia in terms of revenue and profit.
Okay ...
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Deleted member 11852
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Activision-Blzzard, which produced $5.30B profit in 2022, $6.48b profit in 2021, and $5.82b profit in 2020, is either a stupid investment or a very long-term investment for Microsoft.
Long-term as is vastly longer than ten years unless Microsoft have some sure-fire way to boost profitability by an order of magnitude.
I guess it depends on the market. 10 years is something like a quarter of the console market's existence, at least in the mainstream (1983 NES). So "how long has your market existed? Okay, you've got a quarter of that now regulated," seems a lot.
However, how long is cloud gaming going to be a thing. As discussed here, probably many decades, into a future where it's all streamed with no local computing. Ten years will be a drop in the ocean. thinking purely in terms of cloud, I'd like to see the next 10-20 years regulated up front to prevent a MS OS type dominance. There should be several active, healthy player established going in to the 2040s and beyond. Preventing an early advantage for any player to stop snowballing growth and dominance is part of that, and I'd consider 10 years probably a minimum to let the market develop and settle on good competitors who can provide a decent service without someone having a fast-growth advantage.
Cloud gaming could be a big thing in zero to any number of years from now, or never, and it could stay big from zero to any number of years.
How many articles predicted vr was upon us, and it’s basically not growing and we’re all waiting to see when or if it’s actually going to happen.
In ten years every single cloud gaming business could be dead … or huge.
How many articles predicted vr was upon us, and it’s basically not growing and we’re all waiting to see when or if it’s actually going to happen.
In ten years every single cloud gaming business could be dead … or huge.
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Deleted member 11852
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Exactly. Cloud gaming has not yet had a chance because of the technical issues holding the tech back. Thus far, cloud gaming has been like the Model T Ford. A demonstration of potential.
VR is a different gaming paradigm and not a good comparator to the potential of cloud gaming, which once you solve the latency/bandwidth technical barriers, can provide the same - if not better - experience that many can get form a local PC - depending on your PC. Once network reliability is no more of a considerable than power cuts, if gamers can get a better remote gaming experience by paying a service provider less than you would spend on hardware in any given period, cloud gaming will erode local hardware whilst also offering the benefit of it being available anywhere you have a controller/keyboard/mouse.
The potential is massive. Centralisation of technicals resources has resulted in cost reductions in thousands of service solutions for consumers and the same will be true of cloud gaming where it will also be relatively easy to redeploy unused hardware intended to serve games, for other server-based functions. The efficiency gains can be massive.
And this is why it's a no from the CMA. Because Microsoft are well positioned to make all this happen at a scale that very few other companies can hope to compete with. With their resources/market presence, Microsoft can experiment in this space with relatively little risk.
@DSoup It's not a really compelling argument. The CMA says no because there's a universe where the stars align in a perfect way and Microsoft has advantages ten years from now. The idea that a government agency can pick winners and losers in art and entertainment is absolutely absurd to me. Microsoft's infrastructure advantages already exist. What we're talking about is them potentially owning three games (COD, WoW, Diablo) that would put them over the top in a cloud gaming war, when no one knows if those games will be good or popular ten years from now, or if cloud gaming is even going to be a successful industry. Stopping Microsoft from buying COD doesn't suddenly allow other companies to build giant world-spanning data centres. The players here are limited (Google, Amazon, Microsoft, Tencent, Sony, Valve, Epic) in terms of their investment in gaming or the infrastructure required. But I can't predict the future and neither can the CMA. We have no idea how many of them will attempt and succeed or fail at cloud gaming decades from now.
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Deleted member 11852
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Monopolies and Mergers regulators, to some degree, always have to try and predict the future. Microsoft already has a huge advantage in the cloud service market and being allowing to own more gaming IP and acquire more independent studios, would only exacerbate that should that market take off. It feels inevitable to me.
Markets, particularly new viable markets, must be competitive to evolve and grow. If a small number of super tech companies like Amazon, Apple, Microsoft and Google, control so much of the tech industry that genuine competition is pretty much impossible, then saying no to further acquisitions is the only way to ensure that actual competition - for companies large and small - is possible. None of this even accounts for AI and Microsoft owning OpenAI.
The CMA aren't picking a winner, they seemingly see this as preventing Microsoft becoming an even more indomitable force in the cloud space.
Your previous post you pointed out that cloud could be massive or bust. The same could be true of Call of Duty, Warcraft and Diablo. All three titles have been incredible popular and for all the narrative questioning how important Call of Duty is, it's still the biggest title in competitive online shooters and World of Warcraft is the most successful MMORPG of all time.
The full report will be an interesting read, but I expect most of the concern to be predicated on Microsoft both wanting to be an independent cloud server service provider, but also wanting to leverage their own hardware capability to provide their own cloud gaming service (XCloud), making everybody else relying on these big server providers needing to compete in this area - and regardless of whether they use Microsoft, Amazon or Google server hardware - that is much more difficult if you need to compete with Microsoft because they will be able to lean of their assets and do this at cost, or even below cost.
This is pretty much why there have been calls from many governmental quarters about the need to break-up big tech.
@DSoup Yah, I'm going to stop here because we're in the realm of political disagreements about how wise, useful these kinds of regulations are, especially in a global market.
On the point of these games, all three could be hugely relevant in three years, or they could not be. Maybe Sony will have three games that dominate everything and that allow them to completely take over the cloud industry. Or maybe it will be Tencent etc. Seems odd to me that this particular acquisition requires special attention, but I'm also not that interested in trying to predict the future, and doubt anyone that thinks they can.
On the point of these games, all three could be hugely relevant in three years, or they could not be. Maybe Sony will have three games that dominate everything and that allow them to completely take over the cloud industry. Or maybe it will be Tencent etc. Seems odd to me that this particular acquisition requires special attention, but I'm also not that interested in trying to predict the future, and doubt anyone that thinks they can.
10 years is exactly how long Sony has had since purchasing Gakki to do fuck all with it.
10 years is a huge amount of time its a 5th of the length of the video game market even existing. It is plenty of time for new franchises to rise up and older ones to fall by the way side. 10 years ago there was no fortnite or apex legends. now they are two hugely popular titles . Heck Fortnite released in 2017 making this only its 6th year and apex was 2019.
If you want to regulate to avoid an MS os type dominance you'd have to start regulating Sony heavily since their dominance in the console market will help them dominate in the cloud market. Sony has already purchased a popular live service shooter and will continue to make purchases to drive customers to their console and cloud offerings. MS on the other hand was willing with the activision purchase to make 10 year contracts with these other companies ensuring they have a chance to grow and create their own ip if need be.
Actually it is super short. Plus inadequate when it involves only one title. The cloud market is going to last beyond that.
The first XBOX was launched in 2001. The first PS1 was released Dec 1994.
The first Windows was released 1985.
Google was founded in 1998.
Sony was founded in 1949
Nintendo was founded in 1889.
These companies and their markets are bound to outlast us and new generations of consumers will replace us.
Inuhanyou
Veteran
Cloud market is something they are betting on as the 'future'. If it hits how they want it to hit it will definitely go beyond our gaming generation. And MS would be in a prime position to take advantage of it far more than anyone else. That is their big plan. That is what the CMA thinks. I would not be surprised if the EU and FTC also block on similar grounds now that CMA has laid the collected foundational argument.
That must be some kind of record. Needlessly rehashing the same point twice in a matter of hours.
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