The funny thing is based on the final report is that the acquisition may have been conditionally approved rather than outright blocked if Microsoft had attempted to engage constructively with the CMA on divesting assets. What exactly was their intention in trying to challenge an apolitical civilian government institution into a "winner takes all" contest who clearly has all cards ?
Microsoft acquired Activision Blizzard King for $69 Billion on 2023-10-13
- Thread starter Rangers
- Start date
Divesting asset meaning the 75% of ABK that works on COD? Who would even be able to purchase that piece? Would the ABK shareholders be fine with keeping COD but selling off the rest?
@Bold It's all the same either way to ABK shareholders. They're still getting the ~$70B one way or another (unless they renegotiate) because it's Microsoft who has to sell the COD IP whether at their expense or not ...
Microsoft was obstinate enough to ignore the 3 different suggestions from the CMA which were 1) divest COD, 2) divest Activision, and 3) divest Activision Blizzard so the CMA had no other choice but to go for a straight block since they weren't willing to listen ...
Just sell it to Sony lol.
At that point it's better to scrap the deal and work out a different structured deal between the two parties.
Hence Microsoft's calls for an appeal which isn't likely to have any meaningful outcome. It must've be quite bewildering for them to have not figured out any middle ground with the CMA ...
What middle-ground? Very curious. What would that be? You can either buy the company or you can't. They're not going to sell off their cloud business. The way it looks to me is Microsoft should just quit the gaming business altogether. They have no chance at all at being competitive in their game library, and if they can't get Activision Blizzard it's time to pack it in.
Edit: At this point I think they're artificially in the console market because it's been difficult to buy Playstation 5s.
Ever since the provisional report, the CMA has made it clear that Microsoft would not be allowed to have all of ABK's assets. At minimum they wanted to see them divest COD ...
If Microsoft can't make any real compromises as inroads towards the CMA's approval then it's the latter's prerogative to return a negative verdict. Instead, Microsoft chose to be adversaries to powers above them rather than cooperating with them which is why they gave them the silent treatment when they weren't engaging them in good faith ...
They were given warnings as far back as September last year however, they've refused to proactively address these issues until the very end and this was the reprisal given to them. They could've had some of ABK which was the "middle ground" but now they will have nothing ...
@Lurkmass lol. Getting rid of COD, at a minimum, is a middle ground. It's the main thing they want to get, because it gives them a consistent release for their library. Oh well. I'm super curious to see how this all plays out in the long run, and how this kind of decision making looks in hindsight.
You are right. This is very interesting perspective, without the need of buying physical consoles I don’t have to heavily invest into ecosystem and afford to subscribe to multiple cloud services.
I’m in. Sony Nintendo please jump in.
iceberg187
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It would have been something else. My gut feeling has always been that they started at no and worked to an explanation. When they realized the console stuff wouldn't work, they moved to this. Even this final report uses fuzzy, nebulous math and hypotheticals to reach their conclusion. We've seen multiple countries approve this unconditionally, we've seen multiple cloud gaming companies say they support this deal and we have now seen multiple analysts say this conclusion by the CMA makes no sense whatsoever.
Everyone has the same data here. Something isn't adding up right in addition to their faulty math. Nobody in this thread or any thread of its kind on any message board on the internet or real life, on January 18, 2022 when news of this acquisition broke, said, "Oh shit, I wonder what is going to happen to GeForce Now, Ubitus or Boosteroid? It was about Sony and only Sony. To end up here, after all of this is utterly ridiculous to say the least.
At that point Ms will just stop investing in the UK in terms of head count and data centers and they will look to purchase companies that don't operate in the UK. Worse for Uk is if MS starts to reduce head count there.
If the deal falls through the only thing MS will do is look for an exclusivity contract with Activision but again who knows what is in the Sony agreement, it may give sony the ability to match whatever contract activision is offered by another company.
I'd assume after this MS would buy a medium sized Japanese studio or SK studio.
Well this saga is going to get more interesting. Ms is also saying a lot about how the EU is a better place to do business in. Would be interesting to see how that goes if the EU denies the merger.
Also according to Patcher the CMA gave ms an out if they promise not to raise prices on Game pass. Which to me seems to be a really odd thing and directly opposed to what CMA claims they blocked this deal for. IF MS artificially keeps the price low then other companies can't compete or at least not compete on price
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But we arent discussing whether acquisitions should or should not happen at all.
Each acquisition has different effects in the market according to the situation.
MS is not a new actor but even if they were, buying off the biggest publishers and studios to get an advantage is potentially a destructive and aggressive way of doing business.
Sony is actually a grand example of a new player where with minimal acquisitions (Psygnosis), they managed to make the PS1 from 0 to the most successful console in the market. The majority of their investments was about building it from the ground up using their own resources. The acquisitions that followed next were mostly like talent recruitment with studios that had zero track record or an existing track record with Sony and less about buying off ready markets. Sony isnt a moral company of course. It all goes down to their financial ability. Since they had less room to maneuver (Sony's ability to meet liabilities is unhealthy. They just dont have the liquidity) they resorted in more efficient and effective ways of gradually growing step by step which as a consequence doesnt involve buying out huge ready businesses to enter markets in the case of their video game business.
I am not disputing with you. The problem is more complicated than that ofc. My point is you cannot eneter this market without major disruption and without cash. This happened when Sony entered market and they killed off sega. This happens all the time. The view that Sony is growing organically while MSFT is some sort of cancerous growth is simply flawed. And this was not directed at you but the OP. Sony came to the table with money, this was not a sillicon valley startup in garage company. I am pretty sure i owned a walkman and tv made by sony before. So they had cash. Just like msft.
MS is not a new actor but even if they were, buying off the biggest publishers and studios to get an advantage is potentially a destructive and aggressive way of doing business.
Fully agree noone is saying otherwise.
@Nesh Sony has purchased a dozen video game developers in the past four years. In the past they've purchased Media Molecule, Sucker Punch and Guerrilla Games. The idea that Sony Playstation is some kind of "home grown/organic" company is absurd. They buy studios, they pay for exclusives, they pay for IP rights. Microsoft is a huge software company with a cloud business. Sony is a giant media conglomerate and hardware company. There are no scrappy grassroots competitors in this fight.
Microsoft is particularly awful at developing games over the last ten years, at least the big ones. They've had things recently like Pentiment, which are very cool, but vastly different in market size than Spider-Man, Call of Duty etc. The only real difference between Microsoft and Sony is Microsoft sucks at making big games and Sony doesn't.
The aquisitions discussion really comes down to political takes, and whether you think it's ok for big companies to buy smaller companies, though I'd argue the behaviour of Microsoft and Sony is essentially the same.
Microsoft is particularly awful at developing games over the last ten years, at least the big ones. They've had things recently like Pentiment, which are very cool, but vastly different in market size than Spider-Man, Call of Duty etc. The only real difference between Microsoft and Sony is Microsoft sucks at making big games and Sony doesn't.
The aquisitions discussion really comes down to political takes, and whether you think it's ok for big companies to buy smaller companies, though I'd argue the behaviour of Microsoft and Sony is essentially the same.
Nice rant but answer me this?
What is the barrier to MS doing what Nintendo and Sony have done?
They have had the time, money and development talent and yet, they are where they are.
Why is it always someone else’s fault?
Again we arent discussing whether acquisitions happened or not or if they should or should not happen at all.
As I said each acquisition has different effects in the market according to the situation.
I pointed out the differences. I dont want to go through repeating what has already been addressed. Its all in the post you seem to be referring to
Acquisitions have never really been the problem though.
It’s the scale and nature of the acquisitions that become controversial. Nobody’s that upset about Sonys latest purchase. They have no existing IP released. No platform is having existing IPs snatched from them.
Of all Sonys purchases, nothing has been on the scale or impact of say Bethesda. Acti/Blizzard is just on whole different scale.
As for MS being crap at making games, that can be fixed with a change of management but, you guys seem to like how Phil rolls.
No, I think the post you wrote is not really descriptive of what actually happened. I just don't agree that Sony doesn't buy their way into their position as the gaming market leader. They buy companies to keep the talent and the games exclusive. Most of their big games are produced by companies that they have bought, some of which they had paid to keep exclusive for extended periods before. They also pay for exclusiivity on intellectual property like Spider-Man. They didn't start from zero making playstation. They were one of the biggest electronics companies in the world, had huge market power and brand recognition in electronics. I'm not arguing they shouldn't have done any of those things.
The differences here are Microsoft is buying Activision which is a very large conglomerate of development studios, because they have the money to do so. The behaviour of buying studios and keeping things exclusive is the same. Again, whether that kind of things should be allowed to happen divides along political lines. As a gamer, I'd suggest that Microsoft buying Activision wouldn't necessarily even bring them even with Sony in terms of the strength of their game library because the rest of Microsoft's library is so bad from a AAA perspective.
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