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

[Dizzy]

Weird watching someone fight so hard for the videogame landscape to look so much worse.

 

[avenue94]

Weird watching someone fight so hard for the videogame landscape to look so much worse.

It's baffling. Like MadMick is a crusty dude who I'm pretty sure would argue that modern movies and music suck more than older stuff yet he wants the same thing to happen to gaming.

 

[Madmick]

It's a couple billion. How much of global game revenue it is is irrelevant. It's a distinct market according to Microsoft, and the FTC and CMA agree. I'll point out here that Microsoft is the one who fucked itself here by hyping up cloud gaming so much.

Cloud gaming was $2.4bn in 2022. Total global gaming revenue was $347bn. So it was 0.7% of the total market.

Double digit billions if I recall, but I personally would take it with a grain of salt since no one knows how to profit from it currently.

Source this. If it hits $10bn within five years, it will still be less than 2% of total gaming revenue based on projections.

You're wrongly comparing apples and oranges. The market in question is "multi-game subscriptions." This excludes Nvidia GeForceNow and the base tier of PS Plus. So PS Plus Extra (6.1 million) and PS Premium (8 million) is behind Xbox Game Pass.

I'm not wrongly comparing anything. I'm simply highlighting how preposterous your argument is attempting to justify the FTC's rulings, here. You mentioned this merger as being "anti-competitive" based on two primary pillars. The first was cloud gaming which we just showed is tiny sliver of the market, and I have yet to see any projection showing it to become more than that within a decade. Nor have I seen any evidence to show how Activision-Blizzard is a driving force in cloud gaming, nor that Microsoft is the dominant revenue-holder in the market segment.

Second, you mentioned subscriptions. We just showed that Sony has vastly more subscriptions than Microsoft. So if you truly cared about competition, you would support any business acquisition which increases Microsoft's ability to be competitive, there. Your own arguments expose that you're a hypocrite.

Furthermore, if you want to get into the weeds about the cost of subscriptions, you'd need to talk about the cost to maintain the service, and therefore profit, not just subscription revenue. It is widely accepted that Game Pass costs Microsoft an extraordinary amount to furnish-- far more than Playstation Plus (with many questioning if Game Pass is profitable at all as I previously mentioned). So not only does Sony have more subscribers, they gain this revenue with less cost.

Face it. Whether it is about console sales, software sales, cloud gaming, or subscriptions, there is no possible way to paint this acquisition as "anti-competitive". It only makes these markets more competitive. Stop being a hypocrite. Accept the consequences of your own arguments.

 

[avenue94]

Cloud gaming was $2.4bn in 2022. Total global gaming revenue was $347bn. So it was 0.7% of the total market.

Again. It's its own market, per the FTC, CMA and Microsoft. I'm not sure why you are trying to think there is some magic revenue figure that determines whether or not something is a market.

Source this. If it hits $10bn within five years, it will still be less than 2% of total gaming revenue based on projections.

Vantage has 2030 forecast as just under $25 billion, S&P has it as $12 billion by 2026, so on so forth. Like I said, I'd take these forecasts with a grain of salt since they ignore larger context.

he first was cloud gaming which we just showed is tiny sliver of the market, and I have yet to see any projection showing it to become more than that within a decade.

My guy, it's its own separate market. I don't know why you keep lumping it in with overall gaming. Markets are determined by distinction and substitutes or lack thereof, not by revenue.

Second, you mentioned subscriptions

Do you even read shit, dude. I said multi-game subscriptions. That's what the FTC and CMA care about. Hence the base tier of PS Plus and Xbox Live are not included in this market.

In the FTC's words: "The Proposed Acquisition is reasonably likely to substantially lessen competition and/or tend to create a monopoly in both well-developed and new, burgeoning markets, including high-performance consoles, multi-game content library subscription services, and cloud gaming subscription services. "

It is widely accepted that Game Pass costs Microsoft an extraordinary amount to furnish

I love how you recognize that Game Pass is a loss leader, but don't understand the anti-competitive implications of predatory pricing and how that suggests an attempt to monopolize a market through foreclosures or the threat of them. Would you pay $30 a month for Xbox Game Pass?

 

[Madmick]

Again. It's its own market, per the FTC, CMA and Microsoft. I'm not sure why you are trying to think there is some magic revenue figure that determines whether or not something is a market.

Vantage has 2030 forecast as just under $25 billion, S&P has it as $12 billion by 2026, so on so forth. Like I said, I'd take these forecasts with a grain of salt since they ignore larger context.

Statista has it at $18.7bn by 2027 (3.5% of their total gaming revenue projection for that year). That is roughly consistent with the S&P which projects Microsoft to enjoy 35% of cloud-gaming subscribers while Playstation amounts to roughly 15%. Pretending this is their direct shares of the market itself, that means within 5 years Microsoft will make $6.5bn to Sony's $2.8bn, when the total global gaming revenue is projected to be $533bn.

This the hill you want to die on, LOL?

My guy, it's its own separate market. I don't know why you keep lumping it in with overall gaming. Markets are determined by distinction and substitutes or lack thereof, not by revenue.

Do you even read shit, dude. I said multi-game subscriptions. That's what the FTC and CMA care about. Hence the base tier of PS Plus and Xbox Live are not included in this market.

In the FTC's words: "The Proposed Acquisition is reasonably likely to substantially lessen competition and/or tend to create a monopoly in both well-developed and new, burgeoning markets, including high-performance consoles, multi-game content library subscription services, and cloud gaming subscription services. "

I love how you recognize that Game Pass is a loss leader, but don't understand the anti-competitive implications of predatory pricing and how that suggests an attempt to monopolize a market through foreclosures or the threat of them. Would you pay $30 a month for Xbox Game Pass?

I read what you wrote. I ignored it because your (and the FTC's) attempt to tunnel on this highly specific parameter is misleading to a meaningful comparison of subscription-based revenue. Why should the bounty of Playstation's subscription-based revenue be ignored because they choose to pursue a different gaming subscription strategy as their foundation of their subscription-based business? Revenue is revenue. Subscriptions are software services, whether "multi-game" or not, after all, and software is directly tied to the hardware pool driving it. Even moreso than in the past, the previous generation's hardware is relevant as almost all titles being released are simultaneously released to the older consoles.

Sony has over 145m PS4 & PS5 units in circulation compared to Microsoft's 73m Xbox One and Xbox Series devices. Why isn't the FTC or CMA concerned with that? This has a far greater impact on who holds a "anti-competitive" "monpoly" (LOL) of ongoing subscriptions sold. That's evident in the Playstation's vastly superior subscription base.

You appear to be becoming increasingly agitated as I make it plain for all to see that your own arguments undermine your anti-Microsoft stance in this case.

 

[avenue94]

I ignored it because your (and the FTC's) attempt to tunnel on this highly specific parameter is misleading to a meaningful comparison of subscription-based revenue.

Why is it misleading? Define for me in American legal terms, what is a "market." You seem to have no idea what that is.

That is roughly consistent with the S&P which projects Microsoft to enjoy 35% of cloud-gaming subscribers while Playstation amounts to roughly 15%.

Read the chart title. It has Microsoft with 50% global market share with Sony at about 18-20% (assuming subscription costs are all equal). 50% market share is extremely high concentration for a market.

Why should the bounty of Playstation's subscription-based revenue be ignored because they choose to pursue a different gaming subscription strategy as their foundation of their subscription-based business?

Because it's not substitutable for the specific market of multi-game subscriptions. I don't know why you seem incapable of grasping how markets are defined.

Subscriptions are software services, whether "multi-game" or not, after all, and software is directly tied to the hardware pool driving it

Once again, the FTC, CMA, and Microsoft itself strongly disagree with you.

Sony has over 145m PS4 & PS5 units in circulation compared to Microsoft's 73m Xbox One and Xbox Series devices. Why isn't the FTC or CMA concerned with that? This has a far greater impact on who holds a "anti-competitive" "monpoly" (LOL) of ongoing subscriptions sold. That's evident in the Playstation's vastly superior subscription base.

Monopolies are legal. What matters is how they are acquired. Sony dominates currently in raw console counts because Microsoft shit the bed so bad with the Xbox One and never adequately invested in exclusives after that. There are anticompetitive issues with how Sony operates, but they're separate from this case.

You appear to be becoming increasingly agitated as I make it plain for all to see that your own arguments undermine your anti-Microsoft stance in this case.

I'm more amused that you seem so incapable of grasping basic economic principles and what a monopoly is and what antitrust regulators care about. Also your chart reading skills are a laugh and good entertainment.

 

[Madmick]

Why is it misleading? Define for me in American legal terms, what is a "market." You seem to have no idea what that is.

Read the chart title. It has Microsoft with 50% global market share with Sony at about 18-20% (assuming subscription costs are all equal). 50% market share is extremely high concentration for a market.

Because it's not substitutable for the specific market of multi-game subscriptions. I don't know why you seem incapable of grasping how markets are defined.

This projection is devoid of Activision-Blizzard. Ergo, Microsoft is projected to enjoy this share regardless. Regulators have done nothing to substantiate that the acquisition will meaningfully change it in any way. Activision-Blizzard's library is currently consumed wholly outside the cloud. It has zero cloud presence. So how is does their acquisition immediately bolster Microsoft's cloud dominance? It doesn't change it at all.

Also, yes, I glossed over the chart, it's not percentages, but this only impacts a projection of revenue splits, it doesn't change the relative nature of the split between Microsoft & Sony-- currently around 15m to 7m, growing to 37m to 14m by 2026, if you want to estimate as specifically as possible from the chart, meaning the split is unchanged, and as any gamer knows, the predominant form of consumption by these "paid subscribers only" holding these subscriptions (Game Pass Ultiamte or Playstation Plus Premium) is overwhelmingly not via cloud gaming. It isn't what drives those service's subscription sales. On top of all of this, for the entire cloud market, you're still talking about 3.5% of global revenue by 2027. So adjust it to $9.35bn vs. $3.74bn in 2026 when global gaming revenue will be $504bn.

You still want to die on this hill?

 

[avenue94]

This projection is devoid of Activision-Blizzard. Ergo, Microsoft is projected to enjoy this share regardless.

Right, and we can assume that Microsoft would leverage AB to its advantage for cloud gaming when it comes to Sony. You're proving the FTC's concerns here.

So how is does their acquisition immediately bolster Microsoft's cloud dominance?

Because multiple depositions and internal correspondences confirm that Microsoft wants to make acquired IP cloud service exclusive? This is straight forward.

On top of all of this, for the entire cloud market, you're still talking about 3.5% of global revenue by 2027. So adjust it to $9.35bn vs. $3.74bn in 2026 when global gaming revenue will be $504bn.

Again, cloud gaming is its own market.

You still want to die on this hill?

Please explain to me what the legal definition of a "market" is when it comes to antitrust. If you can't, you have no business trying to argue what is and isn't a market here.

 

[Madmick]

Right, and we can assume that Microsoft would leverage AB to its advantage for cloud gaming when it comes to Sony. You're proving the FTC's concerns here.

Because multiple depositions and internal correspondences confirm that Microsoft wants to make acquired IP cloud service exclusive? This is straight forward.

Again, cloud gaming is its own market.

Please explain to me what the legal definition of a "market" is when it comes to antitrust. If you can't, you have no business trying to argue what is and isn't a market here.

Still dying on the "cloud gaming" hill, eh?

Where's the analysis that Microsoft will be able to "leverage" a company with zero presence in that market-- "its own market", LOL? If you treat cloud gaming as entirely separate from the rest of gaming, which is asinine, then Activision-Blizzard currently makes up 0% of that market. So where is the material justification to block an acquisition that adds 0% market share to Microsoft?

 

[avenue94]

Still dying on the "cloud gaming" hill, eh?

Where's the analysis that Microsoft will be able to "leverage" a company with zero presence in that market-- "its own market", LOL? If you treat cloud gaming as entirely separate from the rest of gaming, which is asinine, then Activision-Blizzard currently makes up 0% of that market. So where is the material justification to block an acquisition that adds 0% market share to Microsoft?

1. You still apparently don't know what constitutes market.
2. Microsoft has promised it will take AB into cloud gaming. We know from its interest in Sega that they want IP purchased to be cloud gaming exclusive or favored toward Xcloud.

3. If you don't understand how acquiring IP would advantage a game platform, I don't know what to tell you other than you don't know shit about gaming.

For someone with such strong views on the case, you clearly have little to no familiarity with its actual details.

 

[rob mafia]

Who cares?
Microsoft CEO: Sony Has Defined Market Competition Using Exclusives

Sony acquired Insomniac Games in 2019 and Bungie in 2022, and in neither case was there a inquisition by regulators demanding to know whether they intended to keep IPs from those studios exclusive. The Xbox doesn't even maintain full exclusives, anymore. Only Sony does that.

again, size/scope. this isn't even msft vs sony, it's msft vs ftc.

sony isn't nearly as big as msft and they didn't acquire anyone anywhere near as big as atvi

this is akin to the hellaciously bad poker trope of 'i have more money, you can't call' and the richest de facto winning any (and therefore, every) hand. if msft can buy atvi, they can feasibly buy ~any studio. or every. and then what's sony/etc to do - buy/merge with ea and ttwo before msft gobbles them up? atvi at $69B is more than those 2 combined... and more than half of sony, itself.

 

[method115]

So most likely it's nice going through?

Well the FTC is trying to get a preliminary injunction I think they get denied. You have to prove immediate harm to get one and I don’t think that was shown. Although the judge did say it’s going to be a hard decision.

I think the judge denies it and just tells the ftc to continue taking them to court if they fill so strongly about it.

There is rumors MS will close after that and ignore the CMA who has already blocked it. I don’t believe that but who knows.

 

[rob mafia]

I'm tired of hearing the latest buzzword "vertical integration" to describe a simple acquisition.

lolwut?

if this was a simple acquisition, they wouldn't need this much regulatory approval. it's the biggest acquisition in gaming and done by the 2nd biggest company of all... and involves consoles, subscriptions, mobile... lolz @ calling it simple.

 

[rob mafia]

I'm tired of hearing the latest buzzword "vertical integration" to describe a simple acquisition. Sony acquired Bungie. They all make acquisitions. So let's focus on the bullshit you're slinging.

(1) What percent of gaming revenue in 2023 does cloud gaming represent? What is the projection for cloud gaming revenue by a reliable third party analyst for the next 5 years? The next 10? What does that analysis assert is contributed by the Activision-Blizzard properties?

(2) Per gaming subscriptions, what is the current status of gaming subscriptions? I'll help you with that. Sony has over 47 million PS Plus subscribers. The highest officially confirmed figured we ever saw for Game Pass was over 25 million subscribers. Now, having established the undeniable reality that Sony has a massively greater share of subscribers, perhaps you can establish the relationship between the Call of Duty franchise and subscribers. How many subscribers does that franchise drive? Where is the evidence it will more than double Microsoft's share?

It's laughable that you're trying to sell these nonsense reasons that only confirm Sony as a far more dominant player as reasons to block the acquisition.

your argument would make more sense if msft were to divest xbox. but while they have xbox and pc and mobile... this doesn't make any sense.

 

[rob mafia]

Well the FTC is trying to get a preliminary injunction I think they get denied. You have to prove immediate harm to get one and I don’t think that was shown. Although the judge did say it’s going to be a hard decision.

I think the judge denies it and just tells the ftc to continue taking them to court if they fill so strongly about it.

There is rumors MS will close after that and ignore the CMA who has already blocked it. I don’t believe that but who knows.

the issue is that msft threatened to go ahead with the acquisition without regulatory approval. which, while ballsy, is insane. like i said, they could win the battle (this deal) and lose the war (divestiture).

 

[method115]

the issue is that msft threatened to go ahead with the acquisition without regulatory approval. which, while ballsy, is insane. like i said, they could win the battle (this deal) and lose the war (divestiture).

I actually don’t know if that was brought up in court. So the judge might not know or didn’t allow it to be talked about for some sort of legal reason. There was also a lot of redacted testimony so it might have been there.

 

[Madmick]

1. You still apparently don't know what constitutes market.
2. Microsoft has promised it will take AB into cloud gaming. We know from its interest in Sega that they want IP purchased to be cloud gaming exclusive or favored toward Xcloud.

3. If you don't understand how acquiring IP would advantage a game platform, I don't know what to tell you other than you don't know shit about gaming.

For someone with such strong views on the case, you clearly have little to no familiarity with its actual details.

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 for 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 have said 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.

 

[rob mafia]

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 for 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 both in internal documents and in testimony have said 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.

are these fanboys in the room with you?

avenue said his favorite console was xbox. i don't even like consoles.

 

[avenue94]

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

Wow, congratulations on not addressing any of my or the FTC's points and completely failing to understand antitrust regulation here. I am impressed, all that effort to defeat strawmans no one brought up.

are these fanboys in the room with you?

avenue said his favorite console was xbox. i don't even like consoles.

I don't even know how Madmick is so invested. Like... it's fine if you love of Game Pass but it's hilariously naïve that you think Microsoft won't jack up the price once they corner the market or drastically degrade it if they can't.

He's also convinced the CMA is corrupt because apparently Sony would be willing to pay off regulators but somehow Microsoft would not the do the same I guess?

 

[Kevster]

Fuck me, who threw all the toys in here.