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Microsoft / Activision Deal Approval Watch |OT| (MS/ABK close)
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Ehh. Microsoft is not charity. If they feel the need to reconsider investments in the UK because of hostile regulatory environment it is in their full right. It's their money after all.
Same as CMA had right to block the deal.
It's not like Microsoft threatened to kill somebody over this deal.
Yeah.. I'm sure Microsoft is afraid of reckoning by other regulatory bodies that...
...already approved the deal
LordCBH
Member
Yeah. Spun off Call of Duty and loose Call of Duty Mobile...
... While trying to break into mobile games business...
... Sounds really smart tbh
If it’s about breaking into the mobile industry then they should be ecstatic to have King even without COD.
Dick Jones
Gold Member
I never said they were a charity, I said Brad Smith was rightfully mocked for threatening the UK. You should listen to it sometimes, it's the ramblings of someone who broke out of a nursing home.
Heisenberg007
Gold Journalism
There is none. Why do people get sucked into these bullshit reports?
Let's review the facts:
- Microsoft and ABK made CMA's approval a condition of their merger.
- The CMA blocked the acquisition, so MS and ABK cannot close (as per their own contract). Any such merger attempt would be void-ab-initio.
- MS and ABK cannot change the contract (it'd require another approval from their shareholders).
- And MS and ABK cannot close after July 18 once the contract expires, because there would not be any active contract at that point.
feynoob
Member
This post is like politics for video games
Ogbert
Member
It’s the video game version of Brexit.This post is like politics for video games
Although, I think, this time the liberals like the UK.
DeepEnigma
Gold Member
MS needs Xboxes to sell in order to grow subs. They are at a stalemate at the moment, thus they needed the largest publisher in the world, CoD, etc., to grow those subs and produce enough revenue to not loss lead a sub service that was already promised AAA games that come along with AAA budgets, all while making their competition smaller in hopes to comer the gaming industry like they have attempted and sometimes succeeded in other markets.DeepEnigma
Gamepass is not an xbox. It surpasses Xbox, and it is its own league. MS sidelined Xbox to focus on gamepass.
feynoob
Member
Unless they remove that, they wont close the deal at all.
Neither party will risk trouble with regulation, as that impacts their future business.
This is just karma/views farming season with this deal. All stupid reports and dumb people who will swallow them, without any thinking.
DeepEnigma
Gold Member
Their home country and largest market have not approved it. The second largest market has not approved it. They are virtually irrelevant outside of those two markets and some approvals they don't even sell the Xbox brand in.
This.
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zapper
Member
but it would become a precedent that regulators will take into consideration in the future
Yeah. Smith is soooo bad at his job.
Thank you for your professional evaluation.
Also. I haven't seen that mockery that you talking about outside this forum. Shocker
feynoob
Member
MS can literally do that by paying 3rd party deals like EA.
Why do you think they have EA games on their service?
The intention is clear for MS. Build gamepass and switch to Xcloud in the future. This way, Xbox becomes a defacto gamepass/Xcloud tool.
But for this deal, they need other markets too, which activision has. From Activision with live service games, Blizzard with PC presence(can build a large base for PC gamepass), King for Mobile market.
devilNprada
Member
It's not about Xbox subscriber accounts?
IllegalLemon
Member
Not only that, that information was used as a reference point in the CMA'S analysis of the cloud market, before arriving at their final decision. It sure as hell wasn't done in a hurry.
I though we already established that FTC is a joke. I mean. If CMA did not blocked, Microsoft would already close the deal over FTC's corpse.
More funny is fact that Microsoft is trying to find a way to close over CMA.. As if FTC does not exist
feynoob
Member
I think they have that with minecraft.
graywolf323
Member
I honestly wouldn’t be shocked if we do see some big tech antitrust breakups happen over the next 10 years sorta like what happened to AT&T back in the day
Heisenberg007
Gold Journalism
As I said, they can't just 'remove' it. It'll have to be a new contract, which shareholders will have to approve first. They can just choose to not approve and instead take the $3 billion.
Moreover, there is also the CMA's restriction that Microsoft cannot invest in ABK for 10 years. So a new contract -- after CMA's judgment -- may very well be void-ab-initio.
Who would I trust more?
Reputable source with info from inside of this deal?
Random GAFer?
Yeah. I know what I would pick
DeepEnigma
Gold Member
And before anyone says, "they can just remove the CMA from the contract and they don't need their approval," that is wrong as well.
Even without CMA or any regulatory bodies in the contract, they would still be facing regulation approval by these very bodies. That stipulation in the contract was for investor confidence along with a $3b escrow.
feynoob
Member
If MS does that, I will eat a crow.More funny is fact that Microsoft is trying to find a way to close over CMA.. As if FTC does not exist
Heisenberg007
Gold Journalism
Neither.
Read what I wrote and tell me if (1) anything is factually incorrect, and (2) if not, how will Microsoft close this without CMA's approval?
Dick Jones
Gold Member
Listen to the BBC show and the comments. He was pathetic and lambasted for it.Yeah. Smith is soooo bad at his job.
Thank you for your professional evaluation.
Also. I haven't seen that mockery that you talking about outside this forum. Shocker
Topher
Gold Member
I though we already established that FTC is a joke. I mean. If CMA did not blocked, Microsoft would already close the deal over FTC's corpse.
More funny is fact that Microsoft is trying to find a way to close over CMA.. As if FTC does not exist
FTC hasn't sought an injunction preventing the close. If FTC were to win in its lawsuit then Microsoft would be forced to divest. Just like Facebook had to do with Giphy as ordered by the CMA. So really isn't anything funny about it. Just how it works.
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feynoob
Member
Financial Times Claims CMA Will Approve Microsoft-Activision Deal - Gameranx
The Financial Times claims that the UK CMA will approve the Microsoft-Activision deal at or before their deadline decision this week.
gameranx.com
I remember this very well. We were throwing parties and drinking champaign nonstop.
Yeah. And I'm sure FTC has such a belief that they have chance in this case that they are staling everything in their administrative court.
That FTC that is 0:7 in those type of cases in front of federal court
Yeah. FTC does not matter. It was always about EU and CMA.
DeepEnigma
Gold Member
All government agencies are a joke. The FTC should have always been independent like the CMA, instead it has been weakened and used as a tool by pocket lined politicians over the decades.I though we already established that FTC is a joke. I mean. If CMA did not blocked, Microsoft would already close the deal over FTC's corpse.
More funny is fact that Microsoft is trying to find a way to close over CMA.. As if FTC does not exist
As for your last sentence, that's not what's happening. They have yet to even go to trial with the FTC, so the focus is on the here and now with the CMA.
I was not talking about FT. MLex is reliable source and it always was in this case.Financial Times Claims CMA Will Approve Microsoft-Activision Deal - Gameranx
The Financial Times claims that the UK CMA will approve the Microsoft-Activision deal at or before their deadline decision this week.
I remember this very well. We were throwing parties and drinking champaign nonstop.
I just find it funny how "legal experts" around here were talking for weeks that there is no chance Microsoft would do anything to circumvent CMA and now it looks like Microsoft is exploring exactly this.
Pelta88
Member
Despite the fact that it's been discussed at length, posts like this remind me that people don't grasp the fact that XBOX is a division of Microsoft with a defined budget. Every deal they negotiate, for market rights or putting the game on GP day 1... Is a deal which needs to compensate the Dev/publisher for lost sales on PS.
That cost is gargantuan. Maybe something they can stomach for an ip or two. But the type of money they'd need to spend, makes that route untenable. Because you have to compensate for lost PS sales.
Back in 2017 that strategy became too costly
Xbox boss Phil Spencer says he's "not a fan" of marketing deals with console exclusive content
Unless it's a 12-month timed exclusive. Is what he forgot to say.
www.vg247.com
And this is on the back of a generation where XBOX 360 Dominated marketing deals.
Topher
Gold Member
Yeah. And I'm sure FTC has such a belief that they have chance in this case that they are staling everything in their administrative court.
That FTC that is 0:7 in those type of cases in front of federal court
Yeah. FTC does not matter. It was always about EU and CMA.
Nah, Lina Khan has already said that she cares more about pushing the envelope of M&A law than winning the case. That's a big reason why they lose soo much. Microsoft knows this. So yeah, FTC doesn't really matter as you've said, so why keep bringing them up? This acquisition begins and ends with CMA.
CoreyFlawless
Member
Eh. Not really. If it got big were it something as big as native console are now. Other publisher would be putting their games on them cause that where the ppl are. Publishers didn’t feel like making their game for google cause it be a waste of money. Like no one was buying enough to make up the cost to port it to it. But if cloud ever get big enough they would. They have the content then.
DeepEnigma
Gold Member
Which a good portion of us were saying very early on in Phase 1.
Everyone knew where the wind was going to blow with the others.
GHG
Member
So we're back to Microsoft thinking they are above the law?
These headlines read similar to what was being said about how they would handle the FTC just days before the CMA's decision, and we all know how that turned out.
If they want to go against the ruling of a regulatory body instead of seeing through the appeals process then good luck to them, that's all I have to say.
These headlines read similar to what was being said about how they would handle the FTC just days before the CMA's decision, and we all know how that turned out.
If they want to go against the ruling of a regulatory body instead of seeing through the appeals process then good luck to them, that's all I have to say.
feynoob
Member
Its cheaper to do day1, compared to timed exclusives. As you have to cover the entire cost of removing that platform for 1 year, unlike some lost sales, due to gamepass day1.Despite the fact that it's been discussed at length, posts like this remind me that people don't grasp the fact that XBOX is a division of Microsoft with a defined budget. Every deal they negotiate, for market rights or putting the game on GP day 1... Is a deal which needs to compensate the Dev/publisher for lost sales on PS.
That cost is gargantuan. Maybe something they can stomach for an ip or two. But the type of money they'd need to spend, makes that route untenable. Because you have to compensate for lost PS sales.
Back in 2017 that strategy became too costly
Xbox boss Phil Spencer says he's "not a fan" of marketing deals with console exclusive content
Unless it's a 12-month timed exclusive. Is what he forgot to say.
And this is on the back of a generation where XBOX 360 Dominated marketing deals.
Bernoulli
M2 slut
If Microsoft tries to pull out of the UK before the 18th they will breach the contract and Activision wins the 3 billions
I don't see Activision deciding to extend to leave the UK that's a huge loss for them in revenue
And whatever they do the CMA put that they can't enter an agreement with Microsoft for 10 YEARS
If they try anything shady CMA will pop the champagne and give the huge fines
Topher
Gold Member
Yeah.....that was months ago that we were saying this was going to come down to the EC and CMA.
feynoob
Member
The reason is because of consequences.
MS is risking future business deals for this deal. That is a moronic thing to do as a company.
DeepEnigma
Gold Member
It's still not sustainable for the subscriber numbers the service needs to be at long term, unless you own the products outright. The books are easier to cook, then.
Yeah. And loosing this case probably means "bye bye" to many other acquisitions in future. Including in gaming. Which is probably why they are fighting hard to push this through.
Both actions have consequences. Even trying not to fight CMA with every way possible.
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Dick Jones
Gold Member
Gamepass is sustainable when the development costs aren't factored into the Gamepass expenses so its almost like every first party game has no expense. Looks impressive on the books but the expense is elsewhere.
IllegalLemon
Member
MLex is now selling his own brand of hopium it seems. Let's call it "Lexium". Seems like people have latched onto his claims and wishful thinking and are all over the place saying that Microsoft will try to get the deal passed by spinning Activision to a separate entity in the UK by renting or building a new set of headquarters in the UK for Activision. They even resurrected the "Microsoft will leave the UK for ABK" rhetoric. Some are even saying that CMA will cave and do a 180 on their decision and let it go through because the EC's decision to approve is putting pressure on them and that Rishi Sunak will overturn it. Because politicians in the UK have suddenly became more powerful according to fanboys. Man, the hopium and mental gymnastics. You love to see it.
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feynoob
Member
They wont lose future acquision. If this deal fails, MS can buy other devs. Just not the big 4.
They are accounted in to cost. The caviet is that you only need few sales to bring half of the cost back.
Selling 3m-5m copies is enough for that.
feynoob
Member
MLex are like routers. They do have inside sources.
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Thirty7ven
Banned
Or marketing costs like those 1$ deals or whatever. All revenue baby, and by hiding numbers nobody asks anything. “MS can afford it”, that’s true.
Bernoulli
M2 slut
The full picture is way more interesting: the CMA doesn’t seem to care about behavioural remedies (COD 10 years on PlayStation, for example) but they are isolating themselves (in relation to other regulators) with their views.
Everything, as there from the start
Back in September 2022
The thing is that the original articles (from mid and late September) had way more info that the one reported by Seeking Alpha:
- Most of the key issues had been covered during prenotification with the EC: The parties' impression is that there is not much more to discuss with the case team, this source said. "A lot has been discussed".
- The EC had not singled out major concerns and the EC's review was not expected to mirror the one from the CMA because for example the EC didn’t appeared interested in honing in on cloud gaming.
- The CMA was always destined to go to Phase II with the transaction, according to internal sources.
- Agencies in general were delivering an enormous amount of scrutiny. The CMA was the less flexible one and had become even isolated, the source said. In fact, discussing behavioural remedies with the CMA had become complicated.
- MS believed that the CMA was way too speculative regarding the second theory of harm (MS leveraging its assets in other business areas like Azure and Windows).
- Jim Ryan met with EC officials on September 8th, following his public criticism of the transaction.
- Sony had been working with economic consultants to present evidence to substantiate its foreclosure concerns.
- Agreements for access to publisher content in the sector are usually short-term, often up to a year, and intended for parties to be able to withdraw from quickly. That‘s why MS believed that offering 3 years went beyond the standard.
- Google made a submission to Brazilian agency CADE as part of its review of the deal in which it flagged Call of Duty, World of Warcraft, Overwatch and Diablo as games that do not have any close competitors (unless this was a redacted comment, it contradicts what was shared publicly).
The full picture is way more interesting: the CMA doesn’t seem to care about behavioural remedies (COD 10 years on PlayStation, for example) but they are isolating themselves (in relation to other regulators) with their views.
After reading that, my guess is that MS is expecting to get clearance during Phase 1 with the European Commission. If they do that, that would pressure the CMA quite a bit because the European and UK markets are very similar, so, how would the CMA justify such a different outcome without any obvious horizontal issues in the local market?
However, sources from Reuters said that the EC was expected to go to Phase 2
Well, just a few more days to find out what happens with Europe.
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Yoboman
Member
splattered
Member
Man I've been back and forth on the fence this whole time whether not the deal's going to go through... And after reading that I'm pretty sure Microsoft is just going to do whatever the hell it takes to get their acquisition to go through. It's going to happen. Question is how long it's going to take the wrap us up now I guess
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