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

[My Spot]

They do. One of the documents in the leak mentions that Microsoft is putting a $1.5 billion subsidy behind these generation of launches, which is the biggest subsidy they've ever done. I work in the PC industry, and you don't get modern console specs at that price point and make a profit. That's before even mentioning dev costs.

Yeah I just read that Phil Spencer claims they lose "up to $200" per console.

 

[Madmick]

I doubt MS loses money on hardware sold like they did with the 360 and OG XB (which were impressive for their time).

Both the PS5 and XSX sold at a loss at launch. Eventually prices dropped to where Sony doesn't lose money with every unit sold of the disc version in mid-2021. The discless PS5 was always the biggest loser, and remains a money loser. Historically they've always sold the consoles at a loss with the strategy of recouping costs on high software & software licensing profits through more units sold thanks to more consoles in circulation.

Microsoft has been generating record revenues in the Xbox/Gaming division:
Microsoft’s Xbox Division Starts Fiscal 2023 With Record Q1 on Strength of Hardware & Game Pass Subscriptions

As I wrote a few months back, Xbox recently reported its best financial year sales ever. Now, quite resiliently, it’s achieved a new record: the best Q1 sales since reporting began.

Xbox generated $3.61 billion in quarterly sales during the period between July and September, which is up “slightly” since last year, or around half a percentage point of growth. This led to a mostly positive report overall for Microsoft’s gaming division since it either met or exceeded expectations, notably on the hardware side.

And it is generating profits every quarter. Unless one chalks the acquisition of Activision-Blizzard as a loss, instead of an acquisition, as an expense, that will be true for this year, too.

 

[KaNesDeath]

According to Phil they don't have decades to wait.

Which makes sense, they have fiduciary obligations being a publicly traded company. But nothing indicates that theyre burning money like what Zuckerberg did with Metaverse. So statements like this are likely just appeasing fence sitting investors.

 

[jefferz]

Both the PS5 and XSX sold at a loss at launch. Eventually prices dropped to where Sony doesn't lose money with every unit sold of the disc version in mid-2021. The discless PS5 was always the biggest loser, and remains a money loser. Historically they've always sold the consoles at a loss with the strategy of recouping costs on high software & software licensing profits through more units sold thanks to more consoles in circulation.

Microsoft has been generating record revenues in the Xbox/Gaming division:
Microsoft’s Xbox Division Starts Fiscal 2023 With Record Q1 on Strength of Hardware & Game Pass Subscriptions

And it is generating profits every quarter. Unless one chalks the acquisition of Activision-Blizzard as a loss, instead of an acquisition, as an expense, that will be true for this year, too.

Wasn't the Wii U the first Nintendo console that was sold at a loss?

 

[rikwebb]

Wasn't the Wii U the first Nintendo console that was sold at a loss?

Yeah it was

 

[Madmick]

Nintendo isn't Sony or Microsoft. That's who "they've" referred to as these were the two companies being discussed. Nintendo obviously pursues a drastically divergent strategy concerning hardware.

 

[rikwebb]

While the restructured deal is materially different to the previous transaction and substantially addresses most concerns, the CMA has limited residual concerns that certain provisions in the sale of Activision's cloud streaming rights to Ubisoft could be circumvented, terminated, or not enforced.

To address these concerns, Microsoft has offered remedies to ensure that the terms of the sale of Activision's rights to Ubisoft are enforceable by the CMA. The CMA has provisionally concluded that this additional protection should resolve those residual concerns.

The CMA has now opened a consultation, until 6 October, on Microsoft's proposed remedies.

https://www.gov.uk/government/news/...dresses-previous-cma-concerns-in-cloud-gaming

 

[rikwebb]

Looks like this Friday could be the day the deal is finally done

 

[blaseblase]

Blizzard has sucked since Activision bought it, hopefully this leads to a return to form.

 

[Sycho Sid]

Finally official

 

[WhiteMousse]

I don't like the notion of just buying your way through stuff but I still don't understand what basis anyone had in trying to block this beyond "I don't like you having these companies". I got mocked for pointing this out. I don't think this was ever going to not happen as soon as the two entities came to an agreement

 

[GtehMVP]

Blizzard has sucked since Activision bought it, hopefully this leads to a return to form.

Yeah, I'd rather not have one company gobble up so much, but the way Activision/Blizzard has been going, their IP's are in better hands with M$.

Hopefully M$ frees up Raven to try and make another Jedi, Hexen, or Quake game.

 

[Madmick]

I don't like the notion of just buying your way through stuff but I still don't understand what basis anyone had in trying to block this beyond "I don't like you having these companies". I got mocked for pointing this out. I don't think this was ever going to not happen as soon as the two entities came to an agreement

It was absurd and disingenuous fanboyism. I put together a post exposing this as succinctly as possible. The dillweeds howled that I didn't understand the complexities of the case, LOL, but of course, I did, and I was right, they were wrong, because I was using reason to arrive at my conclusions, not biased favortism. Time beared this out.

No, I'm highlighting how silly Sony fanboy arguments are. Tired of all that bullshit in this thread and across the web. Microsoft can't be allowed to acquire Activision Blizzard because...

"Microsoft can't be allowed to make Call of Duty an exclusive!"
Why? Playstation has tons of exclusives. In fact, unlike Microsoft, they have full exclusives which aren't available to PC.

"Because Call of Duty is too popular!"
Uh, what? In the past five years, when looking at the top 10 games sold in each respective year, Sony has compiled roughly a dozen titles across those charts that were either full exclusives or console exclusives on the Playstation. Microsoft had zero. Broadly speaking, they're dominating software sales compared to Microsoft.

"That's different! Sony built their exclusives from the ground up! They innovated. They didn't just buy IPs to make them exclusive!"
Yes, they did. They bought Insomniac Games. And regulators didn't undertake this inquisition when Sony acquired Bungie by grilling Sony & Bungie execs over their future intentions.

"That's not the same! They already had exclusive contracts with developers like Insomniac Games! They weren't first party!"
Well, now they are. And why does a contract matter? Exclusive is exclusive. It's a cost to Microsoft or Sony either way. Cost efficiency is irrelevant to the consumer.

"Because Microsoft is too big a corporation! Sony is the little engine that could."
How are they the little engine? Nintendo is the clear #1 console seller right now. Sony is #2, and they were #1 for most of last generation. This matters far more to total software sales than mere exclusivity. Because for all multiplatform games their user base dwarfs Microsoft's, globally. They have double the 8th & 9th gen consoles out there compared to Xbox. Their total gaming revenue exceeds Microsoft's.

"Aren't you listening?! This isn't about console gaming! It will give them an unfair advantage in cloud gaming!"
Cloud gaming makes up 0.7% of global gaming revenue. Who cares?

"That revenue will grow in the next 10 years...bigly!"
Even the most optimistic projections put it at less than 5% of the overall gaming landscape's revenue inside the next 5 years.

"Cloud gaming is its own market! Microsoft will have over 50% of the cloud market by that time!"
It already does. How does Activision change that? They are 0% of the cloud gaming market right now.

"Because internal Microsoft documents show Microsoft intends to use their IPs to sell more Game Pass Ultimate subscriptions!"
Wait a minute. I thought cloud gaming was "its own market". And its those Game Pass Ultimate subscriptions you use to show their cloud gaming market dominance. But the overwhelming majority of Game Pass Ultimate playtime activity is not cloud gaming. You've seated your very argument against cloud gaming dominance in a service that inextricably combines cloud and non-cloud gaming revenues, and wherein the majority of that revenue attraction is not cloud-based. Whoops.

"But regulators can't allow Microsoft to gain subscription dominance! Game Pass will be too dominant!"
Playstation Plus has 47m subscribers compared to some 25m for Game Pass.

"They're talking about multi-game subscription services! Playstation Plus Basic doesn't count!"
Why? The overwhelming majority of subscriptions bought by consumers has always been the base level subscriptions. Money is money.

"Because multi-game subscription services like Game Pass are their own market! We're talking about the Netflix of games, here! They're going to take over the world!"
Oh, this again. The illogical "it is its own market" nonsense. But, wait, didn't you just call Game Pass a "loss leader"? Meanwhile, Sony executives have said both in internal documents and in testimony the Game Pass model doesn't make sense for them, because they'd lose money, and that game publishers hate it. They eschew competing aggressively in this market of their own volition.


TL/DR stop whining, fanboys. Nobody buys your insincere bullshit pretending to be concerned about fairness practices.

 

[Dizzy]

Yeah, I'd rather not have one company gobble up so much, but the way Activision/Blizzard has been going, their IP's are in better hands with M$.

Hopefully M$ frees up Raven to try and make another Jedi, Hexen, or Quake game.

What have they done for pretty much any of their studios? I’ve yet to see these improvements.

 

[GtehMVP]

What have they done for pretty much any of their studios? I’ve yet to see these improvements.

Unless I'm recalling this incorrectly, they gave Bethesda more time to put out Starfield, and inXile more funds/time for Wasteland 3 after their acquisitions.

Didn't they do the same thing for Arkane with Redfall too? It looks like no amount was going to make it a good game, but that was a Zenimax inspired "live service" creation.

They seem to be giving Obsidian and inXile all the time they need for Avowed and that Clockwork game, along with Ninja Theory's Hellblade 2.

Activision could be in worse hands.

 

[Dizzy]

Unless I'm recalling this incorrectly, they gave Bethesda more time to put out Starfield, and inXile more funds/time for Wasteland 3 after their acquisitions.

Didn't they do the same thing for Arkane with Redfall too? It looks like no amount was going to make it a good game, but that was a Zenimax inspired "live service" creation.

They seem to be giving Obsidian and inXile all the time they need for Avowed and that Clockwork game, along with Ninja Theory's Hellblade 2.

Activision could be in worse hands.

They would have been absolutely roasted if Starfield released unfinished. It was the one IP they needed positivity on.

I’m pretty sure Redfall released in a not great state and they’re still patching it.

I’m not really blaming them or giving them credit. The studios seem to be existing and operating much like normal. They’re just now owned by one of the largest corporations in the world who have made it clear they want to continue down this path if they can.

If nothing else, hopefully a change of leadership helps the employees. I doubt we’ll see much of a difference as consumers though, just less and less choice.

 

[GtehMVP]

They would have been absolutely roasted if Starfield released unfinished. It was the one IP they needed positivity on.

I’m pretty sure Redfall released in a not great state and they’re still patching it.

I’m not really blaming them or giving them credit. The studios seem to be existing and operating much like normal. They’re just now owned by one of the largest corporations in the world who have made it clear they want to continue down this path if they can.

If nothing else, hopefully a change of leadership helps the employees. I doubt we’ll see much of a difference as consumers though, just less and less choice.

I think if there will be any big change between M$ and Activision/Zenimax as overlords, M$ appears more hands off with teams. Instead of encouraging (or demanding if that was the case) microtransaction-like elements to make more money, they just want their teams making decent games. Their monetary goal is to bring in more Gamepass subscribers, and they need more decent to great 1st party games to do that. If this is correct, hopefully it means their dev teams are more free to make the games they want, and not compromise their vision by having to add nickel and diming systems.

I bet studios like Arkane will be given more freedom to make another immersive sim, what they are actually known for. From what I've seen, Redfall ended up in its mediocre state because Zenimax wanted to force a live service model into Arkane's immersive talents. It's too bad Prey didn't sell well, so that's probably why Zenimax did that. It's one of my all time favs, but calling it Prey didn't help anything.

 

[KaNesDeath]

Didn't they do the same thing for Arkane with Redfall too? It looks like no amount was going to make it a good game, but that was a Zenimax inspired "live service" creation.

From the information released that was Arkanes development team wanting to build Redfall. Harvey Smith did a interview saying he let them do it for appeasement purposes. Dev team were tired of constantly doing single player FPS games for the past decade.

 

[Law Talkin’ Guy]

Frankly I’m waiting to see what Id software cranks out as a follow up to Doom Eternal to see how they’ve faired under Microsoft’s ownership. Doom Eternal and its first DLC came out prior to the acquisition by MS of Bethesda from Zenimax so we have yet to see what’s cooking in the oven. Personally I want to see Quake get the Doom 2016 treatment but we’ll see.

 

[PEB]

This deal still has to apparently get by European officials and that is where it gets really vexing for Microsoft. They have to make deals with European cloud providers for distribution of the software. It sounds they have to provide distributions rights to Ubisoft, Gameloft and another provider. The fun is only starting I believe? Steam could also face regulatory issues to apparently this could be a result to what craziness companies are doing to do business in India maybe?

It feels like if you cannot compete with US companies on the same level you pull the rug out from them.