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

Microsoft is pursuing the games with high engagement values. I am curious what was their logic was behind 2018-2019, but both Bethesda and ABK deal are about games with very long legs and high engament values. Everything else is secondary.
 
I think the reasoning is that then no one will want to ditch GamePass and not be able to play whatever high engagement games they happen to be addicted to.
 
iroboto said:
So you may think they overpaid, but you have a very narrow view of the inputs that go into determining the evaluation of these companies. I assure you that just looking at the IPs and the sticker price alone is _not_ sufficient to make this determination. I'm sure that it requires literal months of work completed by professional merger and acquisitions lawyers to determine a reasonable stock price to acquire a company. Consider this before jumping to conclusions that MS or Sony overpaid. They aren't charities, they will come out of this more profitable than if they did not.
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Are these the same lawyers that made the decision to buy Nokia, or the same ppl that thought, lets include Kinect in the xbox one, or the ones that thought google stadia, microsoft Kin device was gonna be a hit. i.e. 'smart' professionals fuck up all the time in business decisions.
Artstechnica has an article about this today, I will quote one comment with 30 votes (all in agreement, which is unusual there )
https://arstechnica.com/gaming/2022...sion-microsoft-merger-inexcusable/?comments=1
Back when the acquisition was first announced, I was absolutely convinced negotiations had started well before the shit really started hitting the fan last Fall. Because there was no way any sane company would take a look at the dumpster fire that Activision had become and think "yeah, let's make an offer and negotiate it super quickly!"

I remain committed to my "no sane company would do this" assessment. Microsoft basically put an offer in on a former meth lab house, before they did an inspection, and they're experiencing the gift that keeps on giving in finding out after the fact just how fucked up Activision is.

And we haven't even gotten to the point where the FTC is going to have a field day over concerns that this is consolidating the industry too much.
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I know Azbat, Johnny awesome, Alphawolf, Brit, eastman, silent buddah, psman etc will keep saying its a good deal for MS but thats because that hate to admit 'their company done fucked uped'
and here they done fucked-up, as in koticks cock is up MS's ass and hes screwed them for a lot of cash more than they are worth. :mrgreen:
Yes keep that image in your head when you think of this deal, actually picture that sex act taking place in a meth house on fire :oops:
 
zed said:
Are these the same lawyers that made the decision to buy Nokia, or the same ppl that thought, lets include Kinect in the xbox one, or the ones that thought google stadia, microsoft Kin device was gonna be a hit. i.e. 'smart' professionals fuck up all the time in business decisions.
Artstechnica has an article about this today, I will quote one comment with 30 votes (all in agreement, which is unusual there )
https://arstechnica.com/gaming/2022...sion-microsoft-merger-inexcusable/?comments=1

I know Azbat, Johnny awesome, Alphawolf, Brit, eastman, silent buddah, psman etc will keep saying its a good deal for MS but thats because that hate to admit 'their company done fucked uped'
and here they done fucked-up, as in koticks cock is up MS's ass and hes screwed them for a lot of cash more than they are worth. :mrgreen:
Yes keep that image in your head when you think of this deal, actually picture that sex act taking place in a meth house on fire :oops:
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Whoa whoa. Easy relax. The lawyers are the ones who make the evaluation of a companies worth and finance controllers etc are all involved in the evaluation process.

decision making on whether to purchase or buy is entirely on leadership. Evaluation of a company’s worth doesn’t mean it will become it. The company can still make huge mistakes in the handling or integration of a company.


Regardless I think we are mixing 2 discussion points here; one being leadership abilities to make good decisions (that always comes with risk) and B how companies are evaluated during M and A.

if you are an owner of activision stock and a lot of it and it makes you a healthy profit annually and someone says I’m going to take these shares off of you, and the current rate is X, and you are told they will buy for a guaranteed Y; this is very different than going on the market and trying to sell stocks at Y yourself. It could take you a life time to sell all your stock at Y because of the way markets move and how much you have to sell. Typically making a big move like selling 3% of the companies shares on the open market would yank the value below the price you want to actually sell it at.

As for MS decision making, are we talking about leadership under Nadella? Because all the points you bring up are under Balmer.
Balmer, the one that markets said that MS worked its way to an slow death and no way it could ever recover. Nadella who took over and in less than 5 years made MS the most profitable and relevant tech company again?

I’m wouldn’t bet against him especially if a buffet isn’t betting against him. I dunno. Each person can choose for them self, but the cost of buying ATVI likely has much larger implications than just growing Xbox gamepass services; ie growing new markets ones (B) stopping others from entering the market. MS isn’t the only one with cash, and certainly FB, Google and Amazon have made their intents well known about how they intend to move into gaming. MS isn’t spending 90B to beat Sony. They are spending 90B to compete against whatever it is FAANG is trying to get into.
 
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zed said:
Are these the same lawyers that made the decision to include Kinect in the xbox one
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f51.gif
 
iroboto said:
Whoa whoa. Easy relax. The lawyers are the ones who make the evaluation of a companies worth and finance controllers etc are all involved in the evaluation process.
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Surely you mean economists and accountants?

Lawyers would definitely have inputted into Microsoft's decision to purchase because Activision-Blizzard was already a burning train wreck going 140mph and what Microsoft are buying, in additional to studios (equipment, licences, capital investment) and IP, is a ton of liability.

But Microsoft would have had consulted accountants and economists to estimate Activision-Blizzard's value as an ongoing venture, plus that most mystic and intangible or assessments, potentia of the acquisition were the business model changed. And Microsoft have dropped enough hints that this seems a certainty. Less annual CoD outings and I'm sure they will do something different with World of Warcraft.
 
DSoup said:
Surely you mean economists and accountants?
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I did.

I don't actually have a term for senior accountants, and we don't hire economists, we typically have director-level financial controllers who understand or have degrees in economics and have senior-level knowledge of accounting to do look at acquisitions - typically we call them financial controllers as accountants will report up to them.

But yes, legal will handle legal, Financial controllers will determine the evaluation of a company with their teams and propose what they think.
 
Johnny Awesome said:
The other thing to consider is that if AB is so badly mismanaged, MS probably figures they can easily double their profitability after acquisition. Let's buy the meth house and clean it up, kick out the crackheads and turn it into a profitable dentist office with twice the rental income. Metaphors can be fun. :)
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Lol well put and likely very accurate comparison too ;)
 
Johnny Awesome said:
The other thing to consider is that if AB is so badly mismanaged, MS probably figures they can easily double their profitability after acquisition.
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They need to sell twice or much, or charge twice as much as sell as much as they do now to double Activision-Blizzard's profitability. The kind of savings the company will see when managed better, will probably be less turnover and less recruitment - which whilst quite time consuming, is in a very different ballpark of costs compared to the revenue that Call of Duty drives. Plus of course.. GamePass.

If Microsoft include current and future Call of Duty in GamePass, and I think the expectation is that they will on Xbox (perhaps not on PC, Microsoft don't include all their currently-owned studio titles in GamePass PC), then that's Xbox console revenue taking a knock. GamePass makes most discussion and conjecture about profitability regarding studios really complicated. It's such a radically different model it's basically incomparable.

Different management. Different release cadence. Difference revenue (on Xbox). More different than the same.
 
see colon said:
I love how people are claiming Microsoft overpaid while the lawsuits claim they underpaid.
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I'm not sure you can take US lawsuits seriously. It's not about the law or justice, it's basically another form of entertainment, right? :runaway:
 
Nesh said:
https://arstechnica.com/gaming/2022...sion-microsoft-merger-inexcusable/?comments=1
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The "escape liability and accountability" theory is nonsense. Microsoft may acquire legal liability for the company's actions but the buyout does not mean that anything criminal perpetuated by the individual management team running Activision-Blizzard is beyond the law. It just makes it a bit messier. If you, as an individual, break the law whilst at a company, then leave/sell that company, you do not escape the law because you as an individual are liable, as are the company as a legal entity.

What will be interesting, is if Activision-Blizzard's management were both not completely open and transparent with the Board, the shareholders and Microsoft about what had taken place. I think that's the only thing that could delay the acquisition and this would be Microsoft potentially withdrawing their earlier offer (which would not have been based on full disclosure) and re-offering at a lower price to account for greater liability that they are buying.
 
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