Microsoft is Buying Activision Blizzard $68.7B ***Update: Acquisition Finalized***

[rikwebb]

Provisional findings and possible remedies are being released as we speak from the CMA (UK) investigation

Short version: https://assets.publishing.service.g...0c2564/Notice_of_provisional_findings_002.pdf

a summary : https://assets.publishing.service.g...820fb0/Microsoft-Activision_PFs_Summary_2.pdf

Press Release: https://www.gov.uk/government/news/microsoft-activision-deal-could-harm-uk-gamers

Possible Remedies: https://assets.publishing.service.g...f7f173ad1cee4/Notice_of_possible_remedies.pdf

Full Report: https://www.gov.uk/cma-cases/microsoft-slash-activision-blizzard-merger-inquiry#provisional-findings

1) Requiring a partial divestiture of Activision Blizzard, Inc. This may be:

a) Divestiture of the business associated with Call of Duty;

b) Divestiture of the Activision segment of Activision Blizzard, which would include the business associated with Call of Duty;

c) Divestiture of the Activision segment and the Blizzard segment (the Blizzard segment) of Activision Blizzard, Inc., which would include the business associated with Call of Duty and World of Warcraft, among other titles.

To be considered

18. Microsoft has, however, informed us of existing and potential contractual arrangements with third-party platforms relating to access to Call of Duty. Accordingly, while none of the circumstances in which the CMA would select a behavioural remedy as the primary source of remedial action in a merger investigation (as summarised in paragraph 15 above) appear to be present, the CMA will also consider a behavioural access remedy as a possible remedy.

19. Access remedies are a form of behavioural remedy which seek to maintain or restore competition by enabling competitors to have access on appropriate terms to the products and facilities of a merger entity that they require to remain competitive. Access remedies normally require an access commitment which is set out in significant detail so that both customers and monitoring agencies can enforce compliance effectively. In this case, an access remedy would look to ensure third party access to Activision Blizzard, Inc's content that is necessary to remedy the provisional SLCs.

44. As noted above, the circumstances in which the CMA might select a behavioural remedy as the primary source of remedial action are not present in this case. The two markets in which the CMA has provisionally found SLCs are multi-faceted and continue to develop. This is particularly the case in cloud gaming, where the customer offerings and business models of market participants are evolving rapidly. We are of the initial view that any behavioural remedy in this case is likely to present material effectiveness risks. We invite the Parties to provide evidence on how these risks could be appropriately managed to ensure that any behavioural remedy is effective.

Final CMA report due by April 26th

 

[rikwebb]

Microsoft Statement given after this

 

[KaNesDeath]

Pathetic that COD is this important to console makers to sell units.

 

[method115]

Microsoft Statement given after this

So it seems like the CMA is saying that the contractual agreements MS has tried to make aren't enough. MS keeps trying to put a timeline on their contractual arrangements (10 years) and it doesn't seem like that is enough.

 

[rikwebb]

So it seems like the CMA is saying that the contractual agreements MS has tried to make aren't enough. MS keeps trying to put a timeline on their contractual arrangements (10 years) and it doesn't seem like that is enough.

It's not just that, in October the CMA felt that MS could offers COD for 100 years but there's always ways/loopholes to get out of the contracts



Its going to be an interesting 2 - 3 weeks to see what happens next with the CMA investigation

 

[PBAC]

I just want Warcraft 4

 

[avenue94]

Its going to be an interesting 2 - 3 weeks to see what happens next with the CMA investigation

The part from Microsoft that cracks me up is the promise that COD would be of the same quality on different platforms when PC routinely gets shafted. As if there was a way to make a contract saying games must be equally non-buggy lol.

 

[milliniar]

Pathetic that COD is this important to console makers to sell units.

It is for sure, I wonder if MS will try to point out it offered to have game pass on PlayStation and Nintendo. Or It they will show they offered to have COD on ps+ extra/premium with no fee.


If divested who could/would buy Cod IP with no devs?

 

[Law Talkin’ Guy]

It just strikes me as odd that the regulators are buying into the argument that COD is that important. Even if it is routinely the best selling game franchise year after year (Christ knows why by the way) it’s still just one franchise. It’s not “bigger than the industry” or anything like that.

 

[rikwebb]

It just strikes me as odd that the regulators are buying into the argument that COD is that important. Even if it is routinely the best selling game franchise year after year (Christ knows why by the way) it’s still just one franchise. It’s not “bigger than the industry” or anything like that.

Funnily enough It's not even the biggest part of the deal money wise, it's King who make Candy Crush

 

[method115]

It is for sure, I wonder if MS will try to point out it offered to have game pass on PlayStation and Nintendo. Or It they will show they offered to have COD on ps+ extra/premium with no fee.

I don't think it will matter because the point is they don't want MS to have the ability to take it away whenever they want. That's why even the contracts don't seem to be good enough for them because they are afraid MS will just find loopholes to avoid following them.

 

[Law Talkin’ Guy]

I don't think it will matter because the point is they don't want MS to have the ability to take it away whenever they want. That's why even the contracts don't seem to be good enough for them because they are afraid MS will just find loopholes to avoid following them.

Regulators = Sony fanbois confirmed

 

[rikwebb]

Quick update on the FTC side of things

 

[method115]

So MS has made their case in front of the the EU and apparently things went well. It's expected to pass in the EU but the main obstacle has always been the CMA. MS made a deal with Nvidia to bring their games to their cloud service and they also made a deal with Nintendo to bring COD to their system as well.

I forgot to add that while MS made a deal with Nintendo to bring COD to their system. The CMA found that Activision wanted to do this as well but apparently the memory in the Switch was making it an issue. So brining COD to the Switch might not even be an option unless they offer a streaming solution. I wonder if the CMA will bring this up to MS and see what their counter argument is.

https://www.cnbc.com/2023/02/21/microsoft-will-bring-xbox-games-to-nvidias-cloud-gaming-service.html

MS had a hearing with CMA yesterday and things didn't go well. They are simply reoffering the 10 year deals and parity with Sony and from what the CMA has said this is simply not enough. On a forum I follow there is a user Idas who's been going into great detail about this. Don't know his status but everyone on the forum seems to trust his opinion. He broke down everything the CMA found and then his thoughts on MS's chances.

From what the CMA found it would actually hurt Sony a lot more than people thought to lose COD. They really did their work and found out quite a bit of info on how losing COD would hurt Sony.

His Breakdown on the CMA's thoughts on the deal:
https://www.resetera.com/threads/th...-ot-antitrust-simulator.633344/post-101885470

His thoughts on the chances that this passes:
https://www.resetera.com/threads/th...-ot-antitrust-simulator.633344/post-101894005

 

[avenue94]

I forgot to add that while MS made a deal with Nintendo to bring COD to their system. The CMA found that Activision wanted to do this as well but apparently the memory in the Switch was making it an issue. So brining COD to the Switch might not even be an option unless they offer a streaming solution. I wonder if the CMA will bring this up to MS and see what their counter argument is.

The other option would be COD mobile, which means bringing it to Game Pass. Which isn't that huge a stretch.

From what the CMA found it would actually hurt Sony a lot more than people thought to lose COD. They really did their work and found out quite a bit of info on how losing COD would hurt Sony.

Yeah. My only concern if I'm Sony is the survey they lean on is...not great in terms of design.

 

[method115]

The other option would be COD mobile, which means bringing it to Game Pass. Which isn't that huge a stretch.

Yeah. My only concern if I'm Sony is the survey they lean on is...not great in terms of design.

COD Mobile would be a different game though MS said they would bring all COD games to Nintendo with complete parity. If you are referring to the survey that talked about people leaving Sony for COD that's not what CMA was referring to. CMA looked at financials and saw what Sony is making and what they will be losing if they lose COD. A lot of people thought Sony was making a big fuss just to kill the deal but they aren't it actually would hurt Sony quite a bit.

Regardless CMA seems intent on killing this deal. CMA almost never likes to rely on behavioral remedies and they told MS from the start that behavioral remedies alone will not work in this case. They need more then that but they can include behavioral remedies. It just can't be the primary solution which is exactly what MS did.

The EU also just moved their final deadline to the day right before the CMA's final deadline. So April 25 we will know one way or the other if this is going to happen. The FTC is powerless to stop this.

 

[avenue94]

COD Mobile would be a different game though MS said they would bring all COD games to Nintendo with complete parity. I

No way to know what the contract says, but I'll point out that Microsoft's announcement just says a 10-year contract to bring COD to Nintendo, same-day launch, with full content parity. It doesn't say what kind of COD title, just a COD title. That's why I wouldn't rule out COD mobile. Otherwise, like you said, it means game streaming, or the Switch's successor having much more powerful hardware than anyone expects. Given COD will be leaving behind last gen consoles in the next couple years, it won't be good enough to just match PS4/Xbone performance.

CMA looked at financials and saw what Sony is making and what they will be losing if they lose COD. A lot of people thought Sony was making a big fuss just to kill the deal but they aren't it actually would hurt Sony quite a bit.

That part I get. I'm just pointing out that the modeling of how much money the CMA thinks Sony loses is contingent on the survey to forecast what happens if Xbox forecloses. For the record, I'm not a fan of the deal. But I still think the survey is among the weakest parts of Sony's defense given its issues.

Regardless CMA seems intent on killing this deal. CMA almost never likes to rely on behavioral remedies and they told MS from the start that behavioral remedies alone will not work in this case. They need more then that but they can include behavioral remedies. It just can't be the primary solution which is exactly what MS did.

I read the CMA's aggressiveness as partly bluster for negotiations. But like you said, we'll know pretty soon.

 

[method115]

I read the CMA's aggressiveness as partly bluster for negotiations. But like you said, we'll know pretty soon.

Someone looked at their past cases it's not bluster at all. The CMA hates behavioral remedies because they are to hard for the CMA to enforce and if a company starts breaking them or finding loop holes the CMA is limited in what they can do. It's why people always knew the CMA would be the hardest obstacle for MS because they don't accept behavioral remedies the same way the EU does. I tried to find the post but someone went through all their past cases and there was only like 1 case where they accepted behavioral remedies.

 

[Law Talkin’ Guy]

What exactly is the CMA?

 

[rikwebb]

What exactly is the CMA?

The regulatory body here in the UK who's investigating the deal

Competition and Markets Authority