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Microsoft buys Activision Blizzard

abija

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How much of that is slot machines branded as video games?
 

Lucumo

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[...]while glossing over the rather obvious fact Activision's shooter has had over 20 years...
I guess the person at Eurogamer is too stupid for math.
 

lycanwarrior

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The onset of soy woke faggots has made us all forget about a cancer that is still very prevalent, the retarded douchebag dudebros. We may not think much about those people anymore but they are still out there and they are still a significant source of decline.
I love looking down on those folks as my intellectual inferiors!
 

Infinitron

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https://www.eurogamer.net/microsoft...substantial-lessening-of-competition-says-cma

Microsoft's Activision Blizzard takeover "will not result in a substantial lessening of competition", says provisional CMA findings​

UPDATE: "Pendulum swings back in favour of deal completing", says analyst.

ORIGINAL STORY:
The UK's Competition & Markets Authority has reached a provisional conclusion that Microsoft's bid to takeover Activision Blizzard "will not result in a substantial lessening of competition in relation to console gaming in the UK".

The CMA has today updated its provisional findings on the basis of new evidence in response to those findings, the most significant of which relates to Microsoft's financial incentives to make Activision's games (including Call of Duty) exclusive.

"While the CMA's original analysis indicated that this strategy would be profitable under most scenarios, new data (which provides better insight into the actual purchasing behaviour of CoD gamers) indicates that this strategy would be significantly loss-making under any plausible scenario," reads a new statement from the CMA.

"On this basis, the updated analysis now shows that it would not be commercially beneficial to Microsoft to make CoD exclusive to Xbox following the deal, but that Microsoft will instead still have the incentive to continue to make the game available on PlayStation."

The CMA's addendum to its provisional findings relates only to console competition and not cloud gaming services, while it continues to "carefully consider the responses provided".

"Having considered the additional evidence provided, we have now provisionally concluded that the merger will not result in a substantial lessening of competition in console gaming services because the cost to Microsoft of withholding Call of Duty from PlayStation would outweigh any gains from taking such action," said Martin Coleman, chair of the independent panel of experts conducting this investigation.

The CMA is set to announce its final decision on the takeover on 26th April.

However, this advancement is a major step forward in the investigation and a positive conclusion for Microsoft.

UPDATE 1: Microsoft has issued a statement in response to the CMA's provisional conclusion.

"We appreciate the CMA's rigorous and thorough evaluation of the evidence and welcome its updated provisional findings," a Microsoft spokesperson told Eurogamer. "This deal will provide more players with more choice in how they play Call of Duty and their favourite games. We look forward to working with the CMA to resolve any outstanding concerns."

Activision Blizzard has also issued a statement, obviously in support of the CMA's decision:

"The CMA's updated provisional findings show an improved understanding of the console gaming market and demonstrate a commitment to supporting players and competition," an Activision Blizzard spokesperson told Eurogamer.

"Sony's campaign to protect its dominance by blocking our merger can't overcome the facts, and Microsoft has already presented effective and enforceable remedies to address each of the CMA's remaining concerns. We know this deal will benefit competition, innovation, and consumers in the UK."

UPDATE 2: The CMA's provisional conclusion "swings the pendulum back in favour of the deal completing", a leading game industry analyst has told Eurogamer.

"My long-term view of this deal has always been that it would complete but with further concessions from Microsoft to smooth the process," Ampere Analysis' Piers Harding-Rolls said.

"However, the provisional Phase 2 findings of the CMA did give me pause for thought considering the structural remedies proposed. Today's updated findings swings the pendulum back in favour of the deal completing.

"Importantly, the change in stance on lessening of competition in the UK console market means that the requirement for structural remedies are substantially less relevant in my view. It now just remains to be seen how Microsoft and the CMA deal with the concern around cloud gaming services.

"The recent deals that Microsoft has signed are partially relevant, but I don't think these completely satisfy concerns around the inherent advantages that Microsoft holds when it comes to its cloud infrastructure. Overall though, this is clearly positive news for Microsoft and Activision Blizzard."
 

anvi

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Fuck Microsoft and Eurogamer! And all those competition watchdogs are corrupt shitlords.
 
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It's sad that Call of Doody is still relevant enough to sway the tides of a console war. I haven't played one in forever. Couldn't tell you the name of the one that came out last year, or the year before, or the year before that, etc. How fucking retarded do you have to be to still buy it year after year? I had a lot of fun with Black Ops 1 and that was enough for me.

Sony is just trying to undermine the sale.

And Microsoft isn’t trying to buy Activision Blizzard so they can make Call of Duty a Xbox exclusive anyways. Some stuff makes sense as an exclusive, some stuff doesn’t. Call of Duty being exclusive post Warzone to anything makes no sense; it makes way too much money, and it wouldn’t be pulling in the same kind of money if it was exclusive. It would be like a someone buying Take-Two and killing the revenue stream of GTA Online by only putting it on one thing. Microsoft doesn’t even want Xbox Game Pass to be exclusive.
 

Higher Animal

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It’s almost certainly the case that Microsoft is hastening a collapse of Sony’s viability as a games company, and it’s not about CoD, but privilege/perks/games being signed to their Netflix model.

In any case, just like with global warming, the time to intervene in the game industry was 15 years ago. Needed more socialist-libertarian structure with a focus on preserving mid tier development networks. But that’s gone, and gaming is geriatric. The industry is triple A and D tier exclusively. I had hope for augmented reality, but that appears to be more of a nice fiction than anything possible. It’s better to adapt to this reality than mount pyrrhic campaigns about capturing something that’s been done with.
 

IDtenT

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Divinity: Original Sin
11 members of Congress argue Sony is unfairly hurting Xbox in Japan

Members of Congress from both sides of the aisle are pressing the Biden administration to take action on PlayStation-Xbox console competition in Japan.

Driving the news: Policymakers raised concerns last week to Biden officials, saying Sony’s business practices in its native Japan are blocking U.S. companies from competing in that country’s gaming market and could be running afoul of U.S.-Japan trade deals.
  • The unexpected pressure became public on Thursday when Sen. Maria Cantwell (D-Wash.) pressed U.S. Trade Representative Katherine Tai on it during a trade hearing.
  • Ten members of the House also sent two letters on Thursday to Tai and Commerce Secretary Gina Raimondo urging action.
What they’re saying: “Today, we write to bring to your attention the imbalanced Japanese video game market, which we are concerned may be a result of a discriminatory trade practice that could violate the spirit of the U.S.-Japan Digital Trade Agreement,” states one of the letters, signed by four Republicans from the House, including Carol Miller (R-W.Va.) and Mike Carey (R-Ohio).
  • The Republican letter alleges that Sony PlayStation has 98% of the “high-end console market in Japan,” signs deals designed to keep hit Japanese games from Microsoft’s Xbox, and says such moves “may violate Japan’s antitrust laws.”
  • “The Japanese government’s effective policy of non-prosecution when it comes to Sony appears to be a serious barrier to U.S. exports, with real impacts for Microsoft and the many U.S. game developers and publishers that sell globally but see their earnings in Japan depressed by these practices,” the letter continues.
  • A letter to Tai and Raimondo from six Democratic lawmakers from Washington state — where Microsoft is based — covers similar ground.
Between the lines: Article 8 of the 2019 U.S.-Japan Digital Trade Agreement calls for the countries to enable “non-discriminatory treatment of digital products” which would include games. It’s less clear if it would also pertain to game consoles.

State of play: Sony has had a steep advantage over Xbox in Japan for decades, though the secrecy around gaming contracts obscures the underlying causes.
  • Sony does occasionally secure major platform exclusives, as with SquareEnix’s Final Fantasy XVI, a Japanese-made game expected to be big with Japanese (and global) audiences and that’s only slated for PlayStation, no Xbox.
  • But Japan’s console market is also not quite a two-horse race: Nintendo, excluded from the definition of “high-end consoles” cited by the policymakers, crushes Sony and Microsoft.
The big picture: The heat on Sony is unmistakably coinciding with the Japanese company’s own pressure on antitrust regulators to block Microsoft’s $69 billion bid to buy Activision-Blizzard.
  • “Sony’s anti-competitive tactics deserve discussion, and we welcome further investigation to ensure a level playing field in the video game industry,” Microsoft spokesperson David Cuddy told Axios.
  • While Microsoft isn’t saying just how involved it was in orchestrating this push, its government affairs team has discussed these issues with members of Congress, Axios understands.
  • Sony reps did not reply to a request for comment.
What’s next: In their letters, House members ask that the Sony issue be raised with the Japanese government and identify “additional barriers” to American companies in accessing the Japanese gaming market.
  • At Thursday’s Senate hearing, trade rep Tai promised Sen. Cantwell to look into things. “This one is new for me,” she said
https://www.axios.com/2023/03/27/congress-xbox-playstation-japan

Lol. Lmao.
 
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Higher Animal

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if you don’t understand that you have a soul, I fully understand the appeal of being a corporate government henchman.
 

Infinitron

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https://activisionblizzard.substack.com/p/microsoft-deal-update-march

A March Update on the Microsoft Deal​

From Activision Blizzard CEO Bobby Kotick.​


Activision Blizzard CEO Bobby Kotick sent the following email to staff on Tuesday:

Team,

As you know, our proposed merger with Microsoft is under review by regulatory agencies around the world—some coverage of which you may have seen recently in the press. I will continue to provide updates regarding the deal.

We remain confident that the transaction will ultimately be approved. Last month, our team traveled to Brussels and London, with the team from Microsoft, to speak at closed door hearings with the European Commission (EC) and the Competition and Markets Authority (CMA) in the UK. During these hearings, Microsoft proposed thoughtful, generous remedies to address regulators’ concerns, and made additional announcements reinforcing their pledge to bring more games to more players around the world. These included contractual commitments to bring Call of Duty to Nintendo, and games to Nvidia, for 10 years. They recently announced similar cloud services agreements with Boosteroid and Ubitus.

Our proposed merger will help us compete in the increasingly competitive marketplace that includes rapidly growing foreign, powerful companies that enjoy protection in their home markets and access to strong talent pools. The partnership with Microsoft will enable us to more effectively compete against these market-leading competitors.

The good news is, regulators who initially had concerns about console competition are starting to better understand our industry. The data and evidence Microsoft has been presenting are tilting the scale. You may have seen statements from Sony, including an argument that if this deal goes through, Microsoft could release deliberately “buggy” versions of our games on PlayStation. We all know our passionate players would be the first to hold Microsoft accountable for keeping its promises of content and quality parity. And, all of us who work so hard to deliver the best games in our industry care too deeply about our players to ever launch sub-par versions of our games. Sony has even admitted that they aren’t actually concerned about a Call of Duty agreement—they would just like to prevent our merger from happening. This is obviously disappointing behavior from a partner for almost thirty years, but we will not allow Sony’s behavior to affect our long term relationship. PlayStation players know we will continue to deliver the best games possible on Sony platforms as we have since the launch of PlayStation.

We will continue to have discussions with European and UK regulators until the decision dates, which we expect in the coming months. You may have also seen today that the Japan Fair Trade Commission found that the deal wouldn’t harm competition and unconditionally cleared our transaction. We will update you again when we have more information to share.

Our team is working collaboratively with Microsoft to make sure we have answers to the many questions you have about the progress of the merger. We will continue to be helpful, supportive, and transparent as we progress through the regulatory process.

Thank you for staying focused on ensuring our players continue to have the very best games and on maintaining the best workplace for our colleagues.

With appreciation,

Bobby
 

Infinitron

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Countdown to Harvey Smith firing initiated? https://www.eurogamer.net/sony-poun...response-to-microsofts-activision-acquisition

Sony pounces on Redfall exclusivity drama in latest response to Microsoft's Activision acquisition​

Slams CMA's recently softened stance as "surprising, unprecedented, and irrational".

Sony has issued a fresh response to the ongoing drama surrounding Microsoft's $68.7bn Activision Blizzard acquisition, and criticised the UK regulator currently probing the deal for recently softening its stance. Sony's statement also highlights the recent comments made by Redfall creative director Harvey Smith as fresh evidence of how Microsoft might mistreat Call of Duty on PlayStation if it were to own the first-person shooter series itself.

Last month, the UK's Competition and Markets Authority softened its stance on a key area of its concern over the deal passing, as it concluded that Microsoft owning Call of Duty would not "result in a substantial lessening of competition" in the console market. Sony's response to this decision, published publicly today, is unsurprisingly critical of this latest development, which it slams "surprising, unprecedented, and irrational".

The response also leaps upon last month's drama which erupted from comments made by creative director Harvey Smith, who revealed that Microsoft had canned plans for a PlayStation 5 version of Redfall after buying Bethesda. These comments, Sony has now said, were an indication of how Microsoft could also treat Call of Duty, if and when the deal goes through.

"Just last week, two days before the Addendum was published, on 22nd March, video game trade publication IGN published fresh evidence in the form of an interview with Redfall's creative director, Harvey Smith, that provides additional insight into Microsoft's strategy," Sony wrote.

"Like Call of Duty, Redfall is a first-person shooter game that features both single player and cooperative multiplayer modes. In his interview with IGN, Mr. Smith explained that Redfall was originally planned to be released on all platforms, including PlayStation, but once Microsoft acquired Bethesda, there was a 'huge sea change ... [Microsoft] said, "No PlayStation 5. Now we're gonna do Game Pass, Xbox, and PC".'"

Smith's comments revealed "compelling evidence of Microsoft’s ability and incentives to foreclose rivals to acquired games, together with its likely conduct post-transaction with respect to Call of Duty," Sony argued.

Microsoft's own carefully-worded response to these comments was that it had not "pulled any games from PlayStation" and that it had in fact "expanded our footprint of games" after releasing PS5 exclusives Deathloop and Ghostwire: Tokyo on Xbox.

Elsewhere in Sony's response, the PlayStation maker highlighted a list of so-called "errors" in the CMA's latest modelling on the deal's potential effects. Sony claims the CMA's model understates the amount of money to be made from highly-engaged Call of Duty fans who would make the switch from PlayStation to Xbox if Microsoft limited access to the game, and that the CMA's study does not take into consideration the fact that once Microsoft owns Activision, it will no longer lose the typical cut of Call of Duty player revenues taken by a game's publisher.

Sony takes issue with the CMA's expectation that no users with less than 10 hours of gameplay or less than $100 of spending in Call of Duty would likely switch from PlayStation to Xbox if Microsoft limited Sony's access to the game. This, Sony states, is simply "pure conjecture".

Ultimately, Sony concludes that the CMA has understated Microsoft's gains from the deal - as well as the gains to be made from having Call of Duty in Game Pass.

Indeed, Sony says the CMA has not fully considered the "ability and incentive" for Microsoft to partially degrade access to Call of Duty, something which it says "may in the short-term be more profitable and easier to implement (including because they trigger fewer gamer complaints) than total foreclosure (because Microsoft would still secure revenues from sales of Call of Duty on PlayStation for a transitional period while it degraded quality or access)".

Sony argues the CMA had not proven Microsoft could still pull from Call of Duty from PlayStation if it wanted to, and that the CMA had not questioned some of the other reasons - beyond the financial - why Microsoft might profit if it did. For instance, limiting access to Call of Duty on PlayStation could help "expanding Game Pass", Sony believes.

In another section of its response, Sony takes aim at Microsoft's example of Minecraft as a game it has continued to support on all platforms after snapping it up.

"Minecraft does not drive anything like the level of gameplay, engagement, or purchasing decisions as Call of Duty," Sony states, "it has substantially lower user engagement compared to Call of Duty; and it has limited impact on console purchasing decisions."

Intriguingly, Sony uses the example of Microsoft limiting the ChromeOS version of Minecraft to its Education Edition as evidence of it blocking the game from a "rival platform". (In what I'm sure is absolutely a complete coincidence, Microsoft last month suddenly announced the full version of Minecraft was now coming to ChromeOS. Huh!)

As you might expect, Microsoft has issued its own statement today which, by contrast, welcomes the CMA's revised position.

"The Provisional Findings Addendum correctly confirms that Microsoft has no incentive to withhold or degrade access to Call of Duty," Microsoft wrote. "As Microsoft has explained throughout the course of the CMA's investigation, such a strategy makes no commercial sense and would result in Microsoft writing off billions from the deal value."

The CMA is due to give its final decision on Microsoft's Activision Blizzard acquisition later this month, on 26th April.
 

Tehdagah

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Countdown to Harvey Smith firing initiated? https://www.eurogamer.net/sony-poun...response-to-microsofts-activision-acquisition

Sony pounces on Redfall exclusivity drama in latest response to Microsoft's Activision acquisition​

Slams CMA's recently softened stance as "surprising, unprecedented, and irrational".

Sony has issued a fresh response to the ongoing drama surrounding Microsoft's $68.7bn Activision Blizzard acquisition, and criticised the UK regulator currently probing the deal for recently softening its stance. Sony's statement also highlights the recent comments made by Redfall creative director Harvey Smith as fresh evidence of how Microsoft might mistreat Call of Duty on PlayStation if it were to own the first-person shooter series itself.

Last month, the UK's Competition and Markets Authority softened its stance on a key area of its concern over the deal passing, as it concluded that Microsoft owning Call of Duty would not "result in a substantial lessening of competition" in the console market. Sony's response to this decision, published publicly today, is unsurprisingly critical of this latest development, which it slams "surprising, unprecedented, and irrational".

The response also leaps upon last month's drama which erupted from comments made by creative director Harvey Smith, who revealed that Microsoft had canned plans for a PlayStation 5 version of Redfall after buying Bethesda. These comments, Sony has now said, were an indication of how Microsoft could also treat Call of Duty, if and when the deal goes through.

"Just last week, two days before the Addendum was published, on 22nd March, video game trade publication IGN published fresh evidence in the form of an interview with Redfall's creative director, Harvey Smith, that provides additional insight into Microsoft's strategy," Sony wrote.

"Like Call of Duty, Redfall is a first-person shooter game that features both single player and cooperative multiplayer modes. In his interview with IGN, Mr. Smith explained that Redfall was originally planned to be released on all platforms, including PlayStation, but once Microsoft acquired Bethesda, there was a 'huge sea change ... [Microsoft] said, "No PlayStation 5. Now we're gonna do Game Pass, Xbox, and PC".'"

Smith's comments revealed "compelling evidence of Microsoft’s ability and incentives to foreclose rivals to acquired games, together with its likely conduct post-transaction with respect to Call of Duty," Sony argued.

Microsoft's own carefully-worded response to these comments was that it had not "pulled any games from PlayStation" and that it had in fact "expanded our footprint of games" after releasing PS5 exclusives Deathloop and Ghostwire: Tokyo on Xbox.

Elsewhere in Sony's response, the PlayStation maker highlighted a list of so-called "errors" in the CMA's latest modelling on the deal's potential effects. Sony claims the CMA's model understates the amount of money to be made from highly-engaged Call of Duty fans who would make the switch from PlayStation to Xbox if Microsoft limited access to the game, and that the CMA's study does not take into consideration the fact that once Microsoft owns Activision, it will no longer lose the typical cut of Call of Duty player revenues taken by a game's publisher.

Sony takes issue with the CMA's expectation that no users with less than 10 hours of gameplay or less than $100 of spending in Call of Duty would likely switch from PlayStation to Xbox if Microsoft limited Sony's access to the game. This, Sony states, is simply "pure conjecture".

Ultimately, Sony concludes that the CMA has understated Microsoft's gains from the deal - as well as the gains to be made from having Call of Duty in Game Pass.

Indeed, Sony says the CMA has not fully considered the "ability and incentive" for Microsoft to partially degrade access to Call of Duty, something which it says "may in the short-term be more profitable and easier to implement (including because they trigger fewer gamer complaints) than total foreclosure (because Microsoft would still secure revenues from sales of Call of Duty on PlayStation for a transitional period while it degraded quality or access)".

Sony argues the CMA had not proven Microsoft could still pull from Call of Duty from PlayStation if it wanted to, and that the CMA had not questioned some of the other reasons - beyond the financial - why Microsoft might profit if it did. For instance, limiting access to Call of Duty on PlayStation could help "expanding Game Pass", Sony believes.

In another section of its response, Sony takes aim at Microsoft's example of Minecraft as a game it has continued to support on all platforms after snapping it up.

"Minecraft does not drive anything like the level of gameplay, engagement, or purchasing decisions as Call of Duty," Sony states, "it has substantially lower user engagement compared to Call of Duty; and it has limited impact on console purchasing decisions."

Intriguingly, Sony uses the example of Microsoft limiting the ChromeOS version of Minecraft to its Education Edition as evidence of it blocking the game from a "rival platform". (In what I'm sure is absolutely a complete coincidence, Microsoft last month suddenly announced the full version of Minecraft was now coming to ChromeOS. Huh!)

As you might expect, Microsoft has issued its own statement today which, by contrast, welcomes the CMA's revised position.

"The Provisional Findings Addendum correctly confirms that Microsoft has no incentive to withhold or degrade access to Call of Duty," Microsoft wrote. "As Microsoft has explained throughout the course of the CMA's investigation, such a strategy makes no commercial sense and would result in Microsoft writing off billions from the deal value."

The CMA is due to give its final decision on Microsoft's Activision Blizzard acquisition later this month, on 26th April.
Hmmm yes? Microsoft has no obligation to release Call of Duty on PlayStation.
 

Infinitron

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https://www.pcgamer.com/its-just-ge...ctivision-games-to-a-uk-mobile-phone-network/

It's just getting silly now: Microsoft inks 10-year deal to bring Activision games to a UK mobile phone network​

I'm not convinced Microsoft itself knows what that means.

Someone needs to wrestle the fountain pen out of Phil Spencer's hand. The Xbox boss just can't stop inking ten-year deals to bring Activision games to different platforms (in the event its acquisition goes through): He's signed them with Nintendo(opens in new tab), Nvidia(opens in new tab), Boosteroid and Ubitus(opens in new tab) (I hadn't heard of them before they made the deal either), and has offered them to Sony(opens in new tab) and Steam(opens in new tab), neither of which were interested.

Well, add another contract to the pile, because while we weren't looking, Phil went out and signed another ten-year commitment to EE, one of the UK's 'Big Four(opens in new tab)' mobile phone networks (and an internet service provider, too). The deal was announced by Spencer in a tweet posted earlier today.

The deal apparently pertains to "cloud gaming," but eagle-eyed readers will spot that the statement is otherwise totally devoid of detail about what it means to bring "PC games built by Activision Blizzard" to the company responsible for my spotty 5G connection.

I imagine the details of the deal are fairly irrelevant to Microsoft, which has been accruing these kinds of agreements mostly in order to wave them in the faces of the various national regulators scrutinising its acquisition of Activision Blizzard. be that this just commits the two companies to keep that going. Or perhaps EE is on the verge of announcing some kind of ill-advised streaming device (it's probably not this).

I've reached out to Microsoft to ask what the actual mechanics of this deal might be, and I'll update this piece if I hear back.

I imagine the actual mechanics of the deal are fairly irrelevant to Microsoft, which has been accruing these kinds of agreements mostly in order to wave them in the faces of the various national regulators scrutinising its acquisition of Activision Blizzard.

Microsoft's game plan is to prove to institutions like the Federal Trade Commission, Competition and Markets Authority, and European Union that it can be trusted not to exploit its control over Activision to unfairly distort the market. It hopes that deals like these—which compel it to play nice for a full decade—will convince regulators it won't hoard all its newly-acquired Activision valuables to itself. It seems to be working(opens in new tab), but there's still time for Sony's lawyers to pull some tricks from their sleeves.
 
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deuxhero

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If the people running these commissions weren't tech illiterate boomers they could have forced MS to open source a bunch of stuff so they can't shut off support/compatibility for older systems/games to force consumers to buy new ones, which is an actual threat MS gaining more control poses. Instead we get guarantees to obscure mobileshit.

Don't know why Valve didn't accept MS's agreeing to release all Activison games on Steam for at least 10 years. There has been at least one EGS exclusive from Activison (Tony Hawk HD). Poison pill? Hidden cost so they went with gentleman's agreement?
 

Beans00

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anvi: Games are shit, I hate them, therefor, the industry is dead.

Reality: https://www.wepc.com/news/video-game-statistics/


Like 60% of the current revenue from gaming is from mobile games.

https://sea.mashable.com/tech-1/204...is-now-dominated-by-mobile-gaming-study-finds

I guess if you want to say 'it's still growing' you're technically not wrong. If you either don't understand this, or don't care I guess that's ok. Or if you actually like mobile games I guess that's ok but I think they suck ass.


Reality is most gaming companies today are either super small indie groups which are sometimes cool sometimes garbo, and everything above that is being consolidated into a few major corporations.


I'd expect ubisoft,take-two to be acquired next. Maybe EA.
 

Infinitron

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Oh wow. It seems like Microsoft were so busy defending themselves against Sony on the Call of Duty front that they didn't think about this cloud gaming stuff: https://www.pcgamer.com/uk-regulato...quisition-in-potentially-fatal-surprise-blow/

UK regulators block Microsoft's Activision acquisition in potentially fatal surprise blow​

Microsoft says it will appeal the decision.

The UK's Competition and Markets Authority (CMA) has unexpectedly moved to block Microsoft's $69 billion acquisition of Activision Blizzard(opens in new tab) over concerns the merger would "alter the future of the fast-growing cloud gaming market".

In a statement made today(opens in new tab), the CMA said "The final decision to prevent the deal comes after Microsoft’s proposed solution failed to effectively address the concerns in the cloud gaming sector". Those concerns were raised in the regulator's findings last February(opens in new tab), when the CMA provisionally said it would oppose the deal over its concerns regarding cloud gaming.

So, clearly, everyone saw this coming, right? Not quite. Despite the dour prognosis that February's provisional findings seemed to serve up, the CMA underwent something of a U-turn(opens in new tab) last month, announcing that "a significant amount of new evidence" had convinced it that an MS buyout of Activision would "not result in a substantial lessening of competition in relation to console gaming in the UK" insofar as Call of Duty was concerned.

To many onlookers, that announcement appeared to set the stage for an approval this month, which would in turn clear the way for an EU approval in May(opens in new tab). But the CMA's concerns about cloud gaming look to have derailed that potential course of events.

The CMA said that Microsoft, which already "accounts for an estimated 60-70% of global cloud gaming services," would "find it commercially beneficial to make Activision’s games exclusive to its own cloud gaming service" in the event the acquisition went through.

"The deal would reinforce Microsoft’s advantage in the market by giving it control over important gaming content such as Call of Duty, Overwatch, and World of Warcraft," said the CMA. "The evidence available to the CMA indicates that, absent the merger, Activision would start providing games via cloud platforms in the foreseeable future".

The CMA said that the remedies Microsoft had offered to ameliorate its concerns were insufficient. In particular, the regulator was dissatisfied that Microsoft's suggested "behavioural" solutions would require the continued oversight of regulators like itself, "replacing market forces in a growing and dynamic market with mandated regulatory obligations ultimately overseen, and enforced by, the CMA". The regulator summed up its issues with Microsoft's remedies in three key points:
  • "It did not sufficiently cover different cloud gaming service business models, including multigame subscription services".
  • "It was not sufficiently open to providers who might wish to offer versions of games on PC operating systems other than Windows".
  • "It would standardise the terms and conditions on which games are available, as opposed to them being determined by the dynamism and creativity of competition in the market, as would be expected in the absence of the merger".
The CMA also decided that the addition of Activision Blizzard games to Game Pass "would not outweigh the overall harm to competition (and, ultimately, UK gamers)".

Activision shares have fallen 11% off the back of the announcement, the FT reports(opens in new tab).

I've contacted Microsoft and Activision for comment on the decision, and I'll update this piece if I hear back. But the FT reports that Microsoft vice president Brad Smith has said that the corporation "remains fully committed to this acquisition and will appeal" the CMA ruling, and warned that the decision "discourages technology innovation and investment in the United Kingdom". He criticised the UK regulator for "a flawed understanding of this market and the way the relevant cloud technology actually works".

An Activision shareholder spoken to by the FT reportedly told the outlet that, "at the end of the day, this deal is dead already. It’s a zombie-deal now".

It's interesting that the CMA has centred its concerns on cloud gaming in particular, given that so much of the criticism levelled against the deal by Sony—probably the acquisition's chief opponent—has instead revolved around the access to Call of Duty.

It's doubly interesting given that one of Microsoft's own competitors in the cloud gaming space, Nvidia, has appeared to be supportive of the acquisition, and even signed a ten-year deal with Microsoft(opens in new tab) to keep bringing Activision's games to Nvidia platforms.

I've reached out to Nvidia about the CMA decision, too, and will update if I hear back.

It's too early to tell if this is a stake through the heart of the Activision acquisition, particularly in light of Microsoft's commitment to appeal, but it's certainly going to be unwelcome news in both companies' offices. I imagine that, right now, the corporations will be scrambling to prevent a domino effect: The possibility that the UK's refusal might prompt the EU (and US, especially given the FTC's past hostility to the deal(opens in new tab)) to do the same.

https://www.eurogamer.net/cma-decis...oft-deal-insists-activision-boss-bobby-kotick

CMA decision "far from the final word" on Microsoft deal, insists Activision boss Bobby Kotick​

"We're confident in our case."

Activision Blizzard CEO Bobby Kotick has responded to this morning's stunning decision by the UK's Competition and Markets Authority (CMA) to block Microsoft's $69bn acquisition deal.

In an internal email, published publicly, Kotick stated the result "isn't the news we wanted - but it is far from the final word on this deal".

He also confirmed that the decision will be contested, alongside Microsoft. "We're confident in our case because the facts are on our side: this deal is good for competition," he said.

Much of Kotick's response focused on the benefits this merger would bring to the UK's tech market.

"At a time when the fields of machine learning and artificial intelligence are thriving, we know the UK market would benefit from Microsoft's bench strength in both domains, as well as our ability to put those technologies to use immediately," said Kotick.

"By contrast, if the CMA's decision holds, it would stifle investment, competition, and job creation throughout the UK gaming industry."

This mirror's a similar statement on Twitter from the company's EVP of corporate affairs and CCO Lulu Cheng Meservey: "This report is also a disservice to UK citizens, who face increasingly dire economic prospects, and we will need to reassess our growth strategy in the UK."

Kotick continued: "This merger is a complex process, and I know I'm not the only one frustrated by the hurdles and delays. We're accustomed to a company culture that moves quickly to accomplish big goals, so it's tough when we can't close things out at our usual energetic pace. We'll keep pressing our case, because we know that this merger will benefit our employees, the broader UK tech workforce, and players around the world.

"I'm going to do everything I personally can to advocate for us and help regulators understand the competitive dynamics in our industry. What gives me confidence is that, whether on our own or united with another company, we are one of the strongest companies in our industry, poised for continued growth, and building on our incredible IP."

The CMA's decision today comes as a shock, following its recent provisional findings that the merger "will not result in a substantial lessening of competition in relation to console gaming in the UK", though concerns remained about competition in cloud gaming. It's those concerns that form the basis of its rejection.
 

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