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

[iroboto]

That's also Silent_Buddha's take, appeasing what the shareholders want. Which is of course okay. The issue was more MS presenting their hard-done-by case to the EU, "we're only 20% of the EU market," without the "because we didn't care to sell here" caveat and others pointing to the skewed market without factoring in the causes.

I think the moderate consensus now is that yes, MS didn't chase the console market as they could have resulting in a skewed market, but now they want to compete (in gaming, if not consoles) and there's no way any new player can do that without spending BIG.

Agreed, as well as the largely ignored post above by Nick.
Even as recent as now, Phil Spencer is still justifying Xbox to the CFO here.
"Gaming makes sense for MS, is the focus on the consumer. I can see no other clear consumer category with this TAM where MS has the product truth today and the customer demand that we have in gaming and where the disruption that is happening in the business plays to some of Microsoft's long term strengths (cloud and subs)"

They won't get this investment if Xbox is not aligned with Microsoft. They aren't interested in supporting these smaller territories because it comes with more that just shipping and distribution, you have to handle support and RMA and all that Jazz. Sony is well suited for this, they have TVs, music players, cameras and all sorts of electronics devices that they've been supporting for years. The infrastructure is there and for MS it is not. I don't see them having any desire to having that type of level of support for hardware, which is why I see them being okay with cloud, since the support level is really just supporting the datacenters.

And I mean, MS has been siphoning their supply into xcloud. To them, it's better to make xcloud than to spread everywhere.

 

[Silent_Buddha]

That's also Silent_Buddha's take, appeasing what the shareholders want. Which is of course okay. The issue was more MS presenting their hard-done-by case to the EU, "we're only 20% of the EU market," without the "because we didn't care to sell here" caveat and others pointing to the skewed market without factoring in the causes.

I think the moderate consensus now is that yes, MS didn't chase the console market as they could have resulting in a skewed market, but now they want to compete (in gaming, if not consoles) and there's no way any new player can do that without spending BIG.

It's not that they don't care. It's that they have constraints that they are operating within (investor relations among others). Those constraints being greatly influenced by the cost of competing against a dominant market player and perceptions (investors again) on how Xbox materially affects profit generation (as opposed to revenue generation) for Microsoft. Wanting to do something is different from having external constraints put on what you can actually do.

It's an important distinction. There's a lot of things Microsoft would "like" to do (same can be said for all businesses and corporations) but they are limited in what they can do. For many businesses that's down to money (cash flow ability to sustain loan payments, etc.), for Microsoft they certainly have a large warchest, but they have increased government and investor scrutiny that they also must appease.

Regards,
SB

 

[Shifty Geezer]

How could any marketing fix this?

In the UK Sony still does billboards, bus-sides, newspaper adverts, and sponsored events. PlayStation has sponsored Championship League football for decades, having PS appear at many football matches.

 

[Shifty Geezer]

It's not that they don't care...It's an important distinction. There's a lot of things Microsoft would "like" to do (same can be said for all businesses and corporations) but they are limited in what they can do. For many businesses that's down to money (cash flow ability to sustain loan payments, etc.), for Microsoft they certainly have a large warchest, but they have increased government and investor scrutiny that they also must appease.

Yes, but also 'don't care' meaning 'don't care enough to prioritise'. We all of us have constraints and have to prioritise. Where you prioritise shows what you truly care about as that's the thing you aren't willing to concede. With the constraints you describe, MS had to be happy securing home market share and leave the ROW to Sony and Nintendo. If they cared more for Europe than the US, they have spent differently, but of course they wouldn't care more for EU than US as ROI is inherently less due to higher cost of operating.

I'm happy to rephrase my comment to "we're only 20% of the EU market, because we didn't prioritising selling here" if it feels more comfortable, but that's what I consider 'don't care' means.

 

[iroboto]

So what you're saying is, Xbox simply isn't important to Microsoft to setup global sales and distribution for it? That is, I think, probably the truth. And this is why they sell and market in less counties and this is why they sell less consoles. Not the indomintance entrenchment of Sony which is what you have been claiming.

With respect to the context of the above post coming out about the email of how Xbox could outspend Sony out of the business; if you sum up all the discussion about what Xbox could do better to compete, consider group that as 1 big spend they could have done to beat Sony, and the reality is, they didn't go through with it.
I think that in itself is admission of the inefficiency of spend they would have to deal with to compete with Sony, and you can tell, they are much more interested in pursuing cloud where it's going to be much cheaper to compete (in long run for MS).

Having said that, I would disagree that market entrenchment is not playing a factor here, because, IMO, it's irrelevant whether Xbox competes in every single market that Sony does. The total market share of Sony is what enables them to wield preferential deals over Xbox because of their controlling marketshare. I don't care why Xbox doesn't compete, but in the argument of whether Sony is leveraging their market power; regardless of MS does or doesn't do, that doesn't preclude Sony from leveraging their controlling market share against the areas in which MS can compete in and still make it an uphill climb.

We can see that even in the markets that MS wants to compete in, it's still 2:1 for Sony. In and some areas significantly more.

 

[Silent_Buddha]

Yes, but also 'don't care' meaning 'don't care enough to prioritise'. We all of us have constraints and have to prioritise. Where you prioritise shows what you truly care about as that's the thing you aren't willing to concede. With the constraints you describe, MS had to be happy securing home market share and leave the ROW to Sony and Nintendo. If they cared more for Europe than the US, they have spent differently, but of course they wouldn't care more for EU than US as ROI is inherently less due to higher cost of operating.

I'm happy to rephrase my comment to "we're only 20% of the EU market, because we didn't prioritising selling here" if it feels more comfortable, but that's what I consider 'don't care' means.

Well, they did prioritize part of Europe, Great Britain. I guess if we wanted to be completely accurate, they prioritized English speaking countries.

However, that said, they did prioritize Japan for the X360 generation. They sunk a lot of money in advertising and exclusivity contracts there but it still got them almost nowhere other than a rabid but small cult following of DOA: Beach Volleyball fanatics.

That in turn would be used as proof by some of the larger investors that Xbox was a waste of money and time and MS should divest itself of that "diversion".

Regards,
SB

 

[see colon]

I'm happy to rephrase my comment to "we're only 20% of the EU market, because we didn't prioritising selling here" if it feels more comfortable, but that's what I consider 'don't care' means.

According to the internal documents, they are supply constrained. So putting priority on regions where you know your fanbase is strong is smart. If you can't grow because of supply constraints, you should at least make sure you aren't shrinking in areas where you are strongest.

 

[Johnny Awesome]

Culture is a big factor. MS came into Europe with Xbox in 2001 where many gamers were already anti-MS. They've faced an uphill battle ever since. In Japan it's even worse. Japanese gamers by and large aren't going to buy an American console. MS is smart to do the bare minimum there.

 

[Deleted member 11852]

Btw, I think the reason MS is not trying to take Spain by storm is that their market research says that prying marketshare from Sony there would be as difficult as trying to get corporate America to ditch all their Windows PCs for Macs. The brand isn't strong enough for that yet.

You can't make a brand successful overnight, you have to work at it. That times times, effort and money. If you don't even sell consoles in countries, how on earth can you possible grow the brand?

Are we going to call Apple incompetent because they haven't achieved even 33% marketshare on the desktop. After all, they're bigger than MS! They've had 40 years! Those fools! What are they waiting for?!?

This isn't a good analogy because Apple only chase certain markets. On the desktop they only have expensive desktops. If you look at who sells the most laptops, it's Apple. The different between Apple in computers, phones and tablets and Microsoft in consoles, is Apple sell less but reap most of the profits in the industry. Microsoft also sell less and their profits are so small that aren't even presented by Microsoft in their financial reports. ¯\_(ツ)_/¯

The biggest reason is the right timing and product(s). MS made some strategic mistakes at the end the 200x about HW and SW they still haven't recovered from at least in the last part.

Companies make mistakes; PlayStation 3 was a financial disaster for Sony and Nintendo have put out several home consoles that sold poorly relative to their competitors, be that SEGA, Sony or Microsoft. But you cannot make zero effort then claim you can't win, that's utterly defeatist. Dislodging Sony from certain market isn't going to be easy but if you don't even try then you have zero chance.

As an opinion of a normal customer I don't even know how marketing works these days anymore. Ads on TV are pointless because who watches them? What do I care about Ads on the Web/Youtube. Either I block them or skip them as fast as possible. I stopped caring about game magazines a long time ago and I don't think the game review sites are really flourishing either. I only buy my consoles from Amazon and games from the digital online store of the console I use.

In Europe PlayStation are a sponsor of the Champions Leage which puts the brand in front of a massive amount of eyeballs. Sony are also avid plasters of putting PlayStation brands on the side of buses, trains and tubes in London - again. The PlayStation logo is a familiar sight in the UK's capital, and many other in Europe as well.

With respect to the context of the above post coming out about the email of how Xbox could outspend Sony out of the business; if you sum up all the discussion about what Xbox could do better to compete, consider group that as 1 big spend they could have done to beat Sony, and the reality is, they didn't go through with it.

Right, so they screwed up. I can accept that. It was just the narrative that Microsoft was somehow at a disadvantage compared to Sony that I was challenging, when the only disadvantage Microsoft have is those they created for themselves.

I am not even shocked by the Matt Booty email because anybody who looks at the industry objectively could see this is obviously what Microsoft was doing. It feels like a desperate last stand to not completely lose the console market but the problem Microsoft have is that they really want to be at the top of the match, but they don't seem to want to put in the hard graft and effort over time. Over four generation they have flip-flopped on strategy. I gamed a lot on 360, not at all Xbox One, and I'm back with my Series X. I'll buy an Xbox when Microsoft give me a reason to and make it available for me to buy.

And that is the greater majority of gamers who are not married to a platform. Most people aren't fanboys. Loving a plastic box or a company is pretty much a mental illness in my book. If you can't see through all the marketing crap about "caring for gamers" and not realise that all any of these companies want. is for you to buy their products and keep giving them money, then there is no hope.

 

[Deleted member 11852]

Culture is a big factor. MS came into Europe with Xbox in 2001 where many gamers were already anti-MS. They've faced an uphill battle ever since. In Japan it's even worse. Japanese gamers by and large aren't going to buy an American console. MS is smart to do the bare minimum there.

Why do you think people in Europe anti-Microsoft? As somebody who has lived in Europe most of my life, this is news to me.

 

[eastmen]

Looks like the expert witness for the FTC today has admitted that the these consoles compete with the switch. The FTC's witnesses are all over the place. I really don't get how they formed this case and why they decided to block it. It seems like they don't understand anything about the markets

Jim testifying that game pass is destructive to their business model seems to be the most glaring issue of the day for the FTC. Sony doesn't want any disruptive innovations in gaming.

 

[Shifty Geezer]

Culture is a big factor. MS came into Europe with Xbox in 2001 where many gamers were already anti-MS.

But they did bring that on themselves! There was a reason people were Anti-MS - it wasn't corporate racism or something.

Why do you think people in Europe anti-Microsoft? As somebody who has lived in Europe most of my life, this is news to me.

Spaeking anecdotally, they definitely were when XB launched. The BSOD and Windows crashing and losing work was a common occurrence. MS seemed to be constantly in the news for various antitrust reasons. I don't know anyone in the early 2000s who had a positive opinion of Windows or MS by-and-large. They had a huge task to release a console against their prevailing reputation.

 

[cheapchips]

Spaeking anecdotally, they definitely were when XB launched. The BSOD and Windows crashing and losing work was a common occurrence.

Pretty sure that MS had to do some 'the Xbox won't BSOD' defensiveness prior to launch.

 

[Johnny Awesome]

That's the point I was making. I agree that their 2001 woes were of their own making. It doesn't change the fact that the gaming division has always had an uphill battle. Xbox would have never survived a PS3 level or WiiU fiasco. All 3 companies have made mistakes when arrogant. I also agree with DSoup that all MS cares about is money. Just like Sony and Nintendo.

 

[SmooTh]

 

[iceberg187]

So, through today, entities/people not affiliated with Microsoft that say cloud gaming isn't a separate market.

Dov Zimring/Google
Jim Ryan/Sony

I'm winning this and closing over the objection of the CMA. Hell, I'd be willing to pay their court fees because they will be destroyed.

 

[iroboto]

https://twitter.com/x/status/1674079122266505217

Now we know how much console exclusivity is. And they address a major concern that I had. After the buyout, the studio personnel will just leave. It's a management nightmare to keep them all there, they just got loaded up with a ton of cash, what incentive is there to stick around.

 

[Silent_Buddha]

Sorry, this is something completely inane that popped into my head when I saw that, so do not take this seriously.

Sony (externally via PR and talks with regulators): Oh shit, MS buying ABK might foreclose our ability to compete and we may have to shut down PlayStation. They're probably going to make COD exclusive!
Sony/PlayStation Fans: Shit MS buying ABK is going to hurt Sony so much!

Sony (internall): The ABK deal is nothing to worry about, it's going to hurt MS more than it hurts us since there's no chance they'll ever remove COD from PlayStation.
Sony (PR team internally): High Five, everyone! We've managed to convince our playerbase that MS buying ABK is the worst thing that could happen to us. Wooot!

Regards,
SB

 

[eastmen]

https://twitter.com/x/status/1674079122266505217

Now we know how much console exclusivity is. And they address a major concern that I had. After the buyout, the studio personnel will just leave. It's a management nightmare to keep them all there, they just got loaded up with a ton of cash, what incentive is there to stick around.

$5 billion for 3 years of exclusivity for a single franchise of ABK. Are there still people on here that are going to claim that buying the company for 68B and having all their games isn't worth it ?

 

[eastmen]

Sorry, this is something completely inane that popped into my head when I saw that, so do not take this seriously.

Sony (externally via PR and talks with regulators): Oh shit, MS buying ABK might foreclose our ability to compete and we may have to shut down PlayStation. They're probably going to make COD exclusive!
Sony/PlayStation Fans: Shit MS buying ABK is going to hurt Sony so much!

Sony (internall): The ABK deal is nothing to worry about, it's going to hurt MS more than it hurts us since there's no chance they'll ever remove COD from PlayStation.
Sony (PR team internally): High Five, everyone! We've managed to convince our playerbase that MS buying ABK is the worst thing that could happen to us. Wooot!

Regards,
SB

I think this is backing sony into a corner if it goes through. Sony has now introduced so much fud that when it comes time for them to buy a sizable company MS will make the same objections and Sony actually has the market share for them to do what they claim MS will do.

I also think that MS doesn't actually need exclusivity. Just having COD/Diablo/WOW and whatever else day one on game pass is enough to make the purchase on the xbox side of the business make sense. All the king stuff makes sense for the mobile/windows portion of the business also.