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Microsoft / Activision Deal Approval Watch |OT| (MS/ABK close)

Do you believe the deal will be approved?


  • Total voters
    886
  • Poll closed .
Status
Not open for further replies.

reksveks

Member
I suppose this would only be true if you ignore underlying xbox and windows compatibility advantages like DirectX. Maybe legally this cannot be defined as a "compatibility advantage" simply because they are different products being sold.
are we talking companies choosing between linux vs windows or windows client vs windows server?.

If we are talking the former, I do think that there will be some concessions to ensure that windows server is licensed at a fair rate, think it fits into the wider concerns about cloud services.
If the latter, my point is the distinction is between windows client and server is kinda null in terms of giving MS an advantage over people using windows server.

I generally do like the idea of more FRAND licensing like systems in the world.
 

PaintTinJr

Member
You've seen the revenue figures of 2021, right? Unless you want to add all of XGS to the cost I can't see how it's not making a profit.
Page 57 of the CMA phase 1 document says it is losing money - still being invested in.

a) One ABK internal document states that multi-game subscription services gained traction as Microsoft continues to invest in XGP. The document added that multi-game subscription services are increasing on console and mobile.237 Additionally, a third-party report held by ABK and shared with the CMA states that the expansion of new business models has boosted monetisation in the gaming industry, one of those models being multi-game subscription services.238
 

GHG

Gold Member
You've seen the revenue figures of 2021, right? Unless you want to add all of XGS to the cost I can't see how it's not making a profit.

Based on the limited data we have you can calculate how much content acquisition is costing them.

I don't know why some people want to be delusional about this, they have admitted themselves that it isn't profitable and isn't positioned to be as such for now:


Greenberg said, "With Xbox Game Pass, Microsoft is focusing on over-delivering on value, even if it comes at the cost of profits in the short term." He followed this up by reassuring Xbox fans that the company is doing okay. Microsoft isn't going under and those with an active subscription don't need to worry about the service getting shuttered.

"The most powerful marketing is word-of-mouth marketing," Greenberg stated. "We can't create as many advertisements, as many assets as we want, but if both of you go tell one of your closest friends, 'You have to get Game Pass!' that's way more effective than any marketing I can do."

People are quick to ignore downplay that point while at the same time they are more than happy to do the latter part of what Greenberg states there. It's conveniently selective.

This isn't some isolated phenomenon either. Across TV and music it's the same story with these types of subscription services from a business perspective. They are all eating losses with a view to one day having enough subscribers to break even and then become profitable. The problem is that in a lot of these cases the number of subscribers required is very much pie in the sky and therefore when subscriber growth slows alternate strategies need to be looked at along with price increases for all existing subscribers (as we've seen with Netflix).

As it stands it's all starting to come to a head in the TV/movie industry, a lot of less well financed companies who have gone down the subscription route are not very well positioned to be able to survive the current resession and debt crisis that's taking hold of the global economy:


“Understand that a good share of [original series] programming is being produced at a loss, in the belief that it will drive a massive shift in the share of consumption” that will swamp competitors,”

Based on 10Q SEC reports filed by Hulu’s parents, which include FX parent 21st Century Fox, Hulu lost $353 million in the first half of 2017.

The competition from companies that operate by such different metrics “is a stiff headwind for anybody,” Landgraf added.

What Microsoft are doing is putting Sony and Nintendo (along with some of the larger 3rd party industry players) in a position where they have no choice but to follow them down this path of "overdelivering on value" which essentially means subsidising your user base via an all you can eat subscription service. Phase one is pretty much done - customers now expect this kind of subscription service to be available.

The next step is to see who can go the distance a survive this kind of loss leader strategy in the long run - content acquisition is costly, regardless of whether you're doing deals or whether you're outright acquiring companies who can make content for your subscription service. There is also the additional impact of the perceived value in purchasing games being reduced which increases the leverage you have when seeking to acquire content for your subscription (we've seen this play out to its full extent in the music industry). Overall it won't end well for those who don't have highly profitable areas of business elsewhere.

For Microsoft this is not a problem for obvious reasons but there will be a significant impact on the industry overall as a result and that's why large acquisitions like Activision get investigated by regulators.
 
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onesvenus

Member
Do you think the economies of scale for somebody who has data centres and is paying for massive bandwidth is not reduced? Especially for a third party buying that bandwidth from you with a markup?
Is that only a problem with data centers or does that also apply to exclusives? Because Sony is using their market scale to get better deals than what the other players can get
 

onesvenus

Member
I don't know why some people want to be delusional about this, they have admitted themselves that it isn't profitable and isn't positioned to be as such for now:
Have you read that link? It's from mid 2020 when Gamepass was like 10 million. Now the subscription numbers are supposedly more than 25 million. Why are you assuming that what happened then is still happening now with more than twice the paying members?
 

GHG

Gold Member
Have you read that link? It's from mid 2020 when Gamepass was like 10 million. Now the subscription numbers are supposedly more than 25 million. Why are you assuming that what happened then is still happening now with more than twice the paying members?

They also have a lot more content on the service now than they had then in addition to a number of company acquisitions which have taken place (which wouldn't happen without gamepass being a thing).

I don't understand why this is so difficult for people to admit. Phil Spencer literally dodged a question surrounding this last year and went with the "sustainable" angle. If it wasn't losing money he would have said so. There's no shame in it either, the whole thing is focused on growth, it's normal that they will lose money on it at the moment.
 
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Neofire

Member
Theoretically Microsoft needs zero consoles for GP to be successful. If 100 million subscribe to Game Pass on PC and/or via streaming then same difference. Granted, that is extremely unlikely but it is kind of funny that I'm currently playing Octopath Traveler via Game Pass on my MacBook Pro right now. And I was just thinking, I don't really need Xbox for this. It is what it is.

Speculating on profit is fine, but we are not going to get those numbers. Seems fair to say that net sales are good enough for Microsoft to continue on with Game Pass.
As you pointed out that is highly unlikely. I will agree that we most certainly won't see Microsoft to publish their profit of the service though.

As far as the "net sales being good enough for Microsoft to continue" isn't exactly transparent with them especially looking at their History of bleeding money for all of the original Xbox's existence and parts of the 360 era. They aren't above losing money just to start a trend and fund it until it catches on. We all know they have the capital to do it.
 

onesvenus

Member
They also have a lot more content on the service now than they had then in addition to a number of company acquisitions which have taken place (which wouldn't happen without gamepass being a thing).

I don't understand why this is so difficult for people to admit. Phil Spencer literally dodged a question surrounding this last year and went with the "sustainable" angle. If it wasn't losing money he would have said so. There's no shame in it either, the whole thing is focused on growth, it's normal that they will lose money on it at the moment.
Because you are not guessing less than what people who say they are not do.
If it's all guessing it's not a real argument.
Page 57 of the CMA phase 1 document says it is losing money - still being invested in.
Investing in doesn't mean losing money at all.
 

PaintTinJr

Member
...

Investing in doesn't mean losing money at all.
Only if the said investment has already been confirmed to yield a profit - which it hasn't, and then it would be reinvest - so in the context of the document referenced it is still meaning MSFT are in the investment phase of XGP - no profit.

You, using mental gymnastics to suggest it doesn't mean that is just odd IMO.
 

ReBurn

Gold Member
There's a difference between losing a ton of money due to a series of blunders in manufacturing cost projections and intentionally losing a ton of money because that is the strategy (battle of attrition).
Yes, one is incompetence and the other is strategy. In either case the money is still spent.
 

SlimySnake

Flashless at the Golden Globes
Continuing our discussion here after somehow gettng goaded into discussing this in the pS showcase thread.

phil_t98 phil_t98
did they give a break down of console ? PS vs Xbox?

No, but their revenues show a big gulf between the two especially starting in 2020 after warzone was released.

86045_2_microsoft-may-lose-billions-keeping-call-of-duty-off-playstation_full.png
 

GHG

Gold Member
Because you are not guessing less than what people who say they are not do.
If it's all guessing it's not a real argument.

We've had greenberg straight up say it's not profitable and Phil dodge the question in the last 2 years but yet anyone who comes to the conclusion that it's not profitable is guessing?

Well then, at least we can agree that nothing either of them say can be taken seriously.

Yes, one is incompetence and the other is strategy. In either case the money is still spent.

While true this is incredibly reductive and distant from the basis our discussion started on.
 
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onesvenus

Member
Only if the said investment has already been confirmed to yield a profit - which it hasn't, and then it would be reinvest - so in the context of the document referenced it is still meaning MSFT are in the investment phase of XGP - no profit.

You, using mental gymnastics to suggest it doesn't mean that is just odd IMO.
That's your interpretation of it. That attitude of you having an interpretation and saying everyone else is wrong is pedantic to say the least.
 
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ReBurn

Gold Member
While true this is incredibly reductive and distant from the basis our discussion started on.
I'm happy that you learned a new word but It really isn't reductive. Our conversation started with you stating that somehow it's different when one of these companies spends a ton of cash and takes short term losses to build and store inventory to launch a console in relationship to a company taking losses in the short term to build their subscription gaming service with plans to earn It back in the future. Cash is fungible and it doesn't really matter what you spend it on. When it's gone it's gone, regardless of how you intended to spend it, and it can be replaced with new cash as revenue comes in. There isn't special cash that works differently due to the way it's spent.
 

Panajev2001a

GAF's Pleasant Genius
yeah and they own shares in epic to. my point is that could influence epic with how they do games. I mean if you remember the statement that the demo for unreal engine on PS5 was only possible because of the super speed of the PS5 SSD, that was a statement they said when in fact it can run on other consoles and PC's as other demos have shown. you can't say that statement couldn't of been influnced by the investment into epic and statements like that influence us guys on consoles of choice
I bet Sony paid The Coalition to optimise things and they are holding SFS and Tier 2 VRS back too ;). Sure they did work together as in Sony did get their feedback and did something about it, but we are seeing things there IMHO that are just not.
 

phil_t98

#SonyToo
I bet Sony paid The Coalition to optimise things and they are holding SFS and Tier 2 VRS back too ;). Sure they did work together as in Sony did get their feedback and did something about it, but we are seeing things there IMHO that are just not.


that was months after the initial statement from Tim sweeny. in fact was that after the consoles had launched?
 

Three

Member
Is that only a problem with data centers or does that also apply to exclusives? Because Sony is using their market scale to get better deals than what the other players can get
I don't see the relevance of exclusives. If Sony were buying Activision though and saying we don't actually have a console sales advantage like MS is pretending to with cloud that would be funny no? Ignoring your whataboutism that is.
 
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onesvenus

Member
I don't see the relevance of exclusives. If Sony were buying Activision though and saying we don't actually have a console sales advantage like MS is pretending to with cloud that would be funny no? Ignoring your whataboutism that is.
Long time exclusives have the same benefits and problems than first-party games. They both bring more people to your platform and devaluate the other.
How it's being done: via buying the publisher or just having a deal with them is just a detail that doesn't have any importance on the impact that exclusivity has.
One being a problem and not the others is just console warriors defending their plastic boxes.
 

Helghan

Member
Page 57 of the CMA phase 1 document says it is losing money - still being invested in.
Investing doesn't mean losing money...

Based on the limited data we have you can calculate how much content acquisition is costing them.

I don't know why some people want to be delusional about this, they have admitted themselves that it isn't profitable and isn't positioned to be as such for now:

That's more than 2 years ago... We already know how much some games cost them, how would they ever get to 3 billion in a year? Some of the better games only costed them 5 million for 3-6 months.
 
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GHG

Gold Member
That's more than 2 years ago... We already know how much some games cost them, how would they ever get to 3 billion in a year? Some of the better games only costed them 5 million for 3-6 months.

The gamepass catalogue then was around 250 games, it's now 500. In addition to that Bethesda alone cost 7.5 billion. A further 70 billion is pending.

I'm happy that you learned a new word but It really isn't reductive. Our conversation started with you stating that somehow it's different when one of these companies spends a ton of cash and takes short term losses to build and store inventory to launch a console in relationship to a company taking losses in the short term to build their subscription gaming service with plans to earn It back in the future. Cash is fungible and it doesn't really matter what you spend it on. When it's gone it's gone, regardless of how you intended to spend it, and it can be replaced with new cash as revenue comes in. There isn't special cash that works differently due to the way it's spent.

Yeh, money is money but the amount of money and the intentions behind said money being spent matter, hence the existence of this thread.

If you want to argue taking a hit financially in order to keep your business going (which is actually similar to what Xbox had to do in order to deal with the 360 RROD) is the same as throwing money at a loss leader strategy that also involves a series of acquisitions which have the potential to change the landscape of a whole industry then this discussion is pointless.

On that basis I don't even know why regulators are investigating. Nothing to see here, just your regular old business investing in themselves.
 
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Topher

Gold Member
As you pointed out that is highly unlikely. I will agree that we most certainly won't see Microsoft to publish their profit of the service though.

As far as the "net sales being good enough for Microsoft to continue" isn't exactly transparent with them especially looking at their History of bleeding money for all of the original Xbox's existence and parts of the 360 era. They aren't above losing money just to start a trend and fund it until it catches on. We all know they have the capital to do it.

I'm not certain corporations report net sales of specific products. Does Sony report net sales of PS+?
 

PaintTinJr

Member
Investing doesn't mean losing money...


That's more than 2 years ago... We already know how much some games cost them, how would they ever get to 3 billion in a year? Some of the better games only costed them 5 million for 3-6 months.
"as Microsoft continues to invest in XGP"

You've even quoted that it was losing money 2 years ago from the other reply, so in this sentence what does the "continues" refer to a continuation of? Do you have any alternative thing that continues - other than losing money from investing in XGP?
 
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Based on the limited data we have you can calculate how much content acquisition is costing them.

I don't know why some people want to be delusional about this, they have admitted themselves that it isn't profitable and isn't positioned to be as such for now:




People are quick to ignore downplay that point while at the same time they are more than happy to do the latter part of what Greenberg states there. It's conveniently selective.

This isn't some isolated phenomenon either. Across TV and music it's the same story with these types of subscription services from a business perspective. They are all eating losses with a view to one day having enough subscribers to break even and then become profitable. The problem is that in a lot of these cases the number of subscribers required is very much pie in the sky and therefore when subscriber growth slows alternate strategies need to be looked at along with price increases for all existing subscribers (as we've seen with Netflix).

As it stands it's all starting to come to a head in the TV/movie industry, a lot of less well financed companies who have gone down the subscription route are not very well positioned to be able to survive the current resession and debt crisis that's taking hold of the global economy:






What Microsoft are doing is putting Sony and Nintendo (along with some of the larger 3rd party industry players) in a position where they have no choice but to follow them down this path of "overdelivering on value" which essentially means subsidising your user base via an all you can eat subscription service. Phase one is pretty much done - customers now expect this kind of subscription service to be available.

The next step is to see who can go the distance a survive this kind of loss leader strategy in the long run - content acquisition is costly, regardless of whether you're doing deals or whether you're outright acquiring companies who can make content for your subscription service. There is also the additional impact of the perceived value in purchasing games being reduced which increases the leverage you have when seeking to acquire content for your subscription (we've seen this play out to its full extent in the music industry). Overall it won't end well for those who don't have highly profitable areas of business elsewhere.

For Microsoft this is not a problem for obvious reasons but there will be a significant impact on the industry overall as a result and that's why large acquisitions like Activision get investigated by regulators.

Just re-quoting so others can see this strong post that speaks truth to the model these subscription services are built off of. We already have enough proof of it, too, just look at the mass cancellations and downsizing with Warner Bros. following the Discovery merger. Netflix might be profitable now (I think), but that was after almost a decade of losses and having a debt-based model for funding. Several Disney+ shows have had obvious cuts in budget (namely She-Hulk as a recent example) due at least somewhat to lack of profits off the subscription base to keep funding high CG production quality for the amount of shows they keep pushing out.

The only way smaller companies can compete in an industry where the dam holding off rampant mass acquisitions/consolidation busts (which, depending on if or how this MS-ABK acquisition gets approved, could be the thing that breaks the proverbial dam and opens the floodgates) is by making rampant acquisitions and mergers themselves, putting themselves into debt along the way and the ones with shallower pockets having to fold so only the biggest cash-supplied players remain (because they are also able to borrow bigger loans, if they even need to do this).

The wildest part is: there is very little organic demand for a subscription-based future from the majority of gamers. Even on devices where you'd think something like cloud gaming or subscription gaming would absolutely dominate, the former is still niche and the latter is only a thing depending on very specific games or services like Apple+. The dominant model on that platform by far is the F2P & MTX combo....which many console games have already been doing for years. This push for a subscription & cloud streaming future is vastly dominated by the corporations themselves, such as Microsoft, who want to lock in even more vertical control of the content provided to users in their ecosystem and doing so at what they feel would ultimately be the cheapest way possible with the largest profit margins, IF the traditional model currently in place were to fall through.

Problem (in their eyes), is that it hasn't and there are so many roadblocks to keep it from doing so for years if not decades IMO. Sony, Nintendo, Steam...none of these companies are prioritizing cloud streaming or a subscription-based future, because there is very little demand for it by actual customers and that's reflected when looking at the percentage of the annual console gaming revenue market subscription services in general account for, which is like 4% at best. 4%, despite having XB Live since 2004, PS+ since 2013, PS Now since 2015, and GamePass and NSO since 2017. Don't forget other entrants like Stadia, which is defunct, and Luna which is seemingly on life support.

Until there is organic demand from a growing majority of customers for a subscription-based and/or cloud gaming-based future, those things will always only remain nice-to-haves to add value to an ecosystem, but never a replacement for the traditional model. This doesn't gel well with Microsoft I feel because despite them saying for now they are okay with GamePass & xCloud being complementary to their current ecosystem, they obviously want to shift the model from where it is to where GamePass & xCloud are THE foundation of their gaming model going forward, but they're seemingly in need to wait for way longer than I think they realize. The actual demand just isn't really there.

So I think that's why they are pushing ahead with these acquisitions (well, one of a few reasons): to create a perception of value with their product and subscription services and condition expectations among customers going forward, making them more receptive to sub services due to the perceived value they bring relative to buying games at $60 a pop. And as we're seeing, that is having an adverse effect on competitors who are NOT doing this, but it's being pushed by particular fanboys/fangirls and journalists who can't see the forest from the trees. That's probably what they are hoping creates a growing pressure to get Sony (and to a lesser extent, Nintendo) to "buy in" to the idea of competing on their terms, buying publishers wholesales, pivoting their business models towards subscriptions, cloud gaming, or anything that can potentially lessen the perception or impact of the traditional console model like supporting PC more fervently (something Sony has been pushing into in ways I don't 100% agree with, but it is what it is).

I think that's how Microsoft is looking at it and maybe if/when this ABK acquisition is improved, they're HOPING some of the other mega corps like Apple, Amazon, etc. and groups like Sazzy and Embracer, have the confidence to go buying out other big 3P publishers and that will force Sony (and Nintendo) to try buying some to stay competitive in that aspect. But if that comes at high costs for such smaller (financially) companies, eventually they have to fold their hand, and only the biggest companies like Microsoft and Apple would be around to pick up the pieces, amassing even more content to drive even more perception of value, and getting more customers, more revenue, more profit.

But it would be the combination of that alongside other competitors folding (thus reducing options for customers, automatically making companies like Microsoft look more appealing by default) that finally gets something like GamePass, and initiatives like cloud gaming (if the other two platform holders who benefit much more from the traditional console market end up falling off, that gives a company like Microsoft, who want to push cloud gaming hard anyway and move from making/selling hardware that brings them no profit on its own, a reason to phase out making local consoles aside from maybe streaming boxes) serious room to not only grow, but thrive.

....yet at what price?
 

PaintTinJr

Member
Sound like it with Goldman Sachs putting their money behind where they think it will go.
Do we know how much of the stock they already owned? and at what price they bought?

This could just as easily be them sure-ing up the price before a bigger sell off, or just defending their existing investment from a much lower buy-in price, and the risk/reward made sense regardless of which way the deal goes.
 
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GHG

Gold Member
You know guys, it's really unfortunate when twitter is used as a "source".


A block of 3.7 million shares of video game maker Activision (OTC:AVTI) was sold for a price of $72.25/share earlier.

Goldman Sachs was said to have shopped the block earlier Monday, according to traders.

The sale may be considered noteworthy to investor as Activision (NASDAQ:ATVI) agreed to sell itself to Microsoft (NASDAQ:MSFT) in January in a $69 billion megadeal. The current deal spread of $23.68 indicates traders are a bit skeptical that regulators will approve the deal around the world, especially in the U.S., U.K. and Europe.

A report earlier this month said that a U.S. Federal Trade Commission's decision on the transaction may come as early as late November. The FTC staff are said to have significant concerns about the transaction, Dealreporter said, citing two sources.

The FTC in late March requested more information about the proposed ATVI/MSFT deal, opening an in-depth antitrust review of the transaction.

On Wednesday Microsoft complained about the influence of videogame console rival Sony (SONY) on UK regulators, as the country's competition watchdog published the full text of its decision to give a phase 2 probe to Microsoft's proposed acquisition of Call of Duty maker Activision Blizzard (ATVI).

They just sold their holding but yet in the opposite land that is twitter we have this guy saying he has a "scoop" where they bought shares? I don't even know where to begin.
 

PaintTinJr

Member
Long time exclusives have the same benefits and problems than first-party games. They both bring more people to your platform and devaluate the other.
How it's being done: via buying the publisher or just having a deal with them is just a detail that doesn't have any importance on the impact that exclusivity has.
One being a problem and not the others is just console warriors defending their plastic boxes.
Your take on this isn't consistent with how things end up, though.

You buy a publisher outright for exclusivity to take it from your competitor, and even if that doesn't translate to taking those sales on your own platform, if you can eat losses it can still just be a method to partially weaken your rival/s.

Long time exclusivity has to be mutually beneficial, so the situation is symbiotic. When the deal starts to trigger damage to the IP the publisher will look to exit the deal. One deal is self-correcting for the IP and the other has no such requirements.
 

Bernkastel

Ask me about my fanboy energy!
Weird as it may seem because it isn't a traditional Embrace, Extend Extinguish Microsoft strategy against a competitor's product
Who the hell uses EEE unironically? What are they extinguishing? These people only played Minecraft because they liked it and Microsoft paid them for some more promotion(like anyone would do).
say like the DirectX one on SGI's Opengl, or the J++ one on Java - Minecraft's Java edition despite being owned by Microsoft is not the Minecraft that they want at all - long term - because it is Opengl based - although recently they upped the graphics requirements massively for the Java version killing of usage by millions of older devices for use with the latest secured servers - and because it is Java based. Recently they tried to push a native launcher for added functionality - over the Java launcher - then they freely upgraded all accounts with a Java copy to have both native and java versions, and then they've opened up cross play for java and native versions on Azure MC servers, which happened at a time when a bug within a java Log2 package used by older MC Java servers pre 1.18 IIRC which can't be fully patched, killing off the means for old device players (using Opengl 2.1) to safely host and play on older MC java server versions, and also at a time when a MC Alpha version Windows server for self-hosting on Windows became available.
Ice Cube Reaction GIF

say like the DirectX one on SGI's Opengl
Thats like saying all platforms should support Vulkan or its EEE. God forbid Microsoft make its own Graphics library for Windows. Atleast, Windows allows you to use Vulkan, on mac they restricted everything to Metal. I don't even have issue with Apple, but don't pretend Microsoft is at committing sin by creating DirectX instead of relying on OpenGL. Microsoft had been trying since early 90s to get console devs to try Windows, so DirectX made sense.
or the J++ one on Java
Yeah, Apple making Objective-C and later Swift was also bad. And so were Ximian for creating Mono and FSF for trying to make DotGNU.
Google calls Kotlin the preferred language for Android development and used it for their Flutter. And just like Microsoft, Oracle also took Google to court
Oh but Microsoft making its own Java variant is "traditional Embrace, Extend Extinguish Microsoft strategy". If you cared about this shit, you would be a Linux gamer not console warring for another closed source walled garden.
Minecraft's Java edition despite being owned by Microsoft is not the Minecraft that they want at all - long term - because it is Opengl based
Its not going to be the Minecraft you want for console warring either. Its very profitable, gives them a lot of brand exposure, yet you are here trying to pretend Microsoft is disappointed with its existense. OpenGL is not even a competitor, that would be Vulkan. Also Mincraft Java does not use OpenGL, it uses LWJGL and OpenGL through it, otherwise there would have been no mac version after Apple removed OpenGL support.
although recently they upped the graphics requirements massively for the Java version killing of usage by millions of older devices for use with the latest secured servers
Oh, those potato PCs can't play Minecraft anymore


Also, id Software dropped OpenGL support in id Tech 7.

and because it is Java based. Recently they tried to push a native launcher for added functionality - over the Java launcher
Do I have to spend a month staring all day at twitter to understand why an application written in Java is such a massive blow to Microsoft's "evil monopolistic to plans to take over the world using Embrace, Extend Extinguish". Why would Microsoft hate something for being Java based.
then they freely upgraded all accounts with a Java copy to have both native and java versions, and then they've opened up cross play for java and native versions on Azure MC servers
thats such a weird way to say they required them to have a Microsoft account.
which happened at a time when a bug within a java Log2 package used by older MC Java servers pre 1.18 IIRC which can't be fully patched, killing off the means for old device players (using Opengl 2.1) to safely host and play on older MC java server versions, and also at a time when a MC Alpha version Windows server for self-hosting on Windows became available.
What were the keywords you were using while googling all that shit? Not that your recent posts gave me any hope
Page 57 of the CMA phase 1 document says it is losing money - still being invested in.
a) One ABK internal document states that multi-game subscription services gained traction as Microsoft continues to invest in XGP. The document added that multi-game subscription services are increasing on console and mobile.237 Additionally, a third-party report held by ABK and shared with the CMA states that the expansion of new business models has boosted monetisation in the gaming industry, one of those models being multi-game subscription services.238
Only if the said investment has already been confirmed to yield a profit - which it hasn't, and then it would be reinvest - so in the context of the document referenced it is still meaning MSFT are in the investment phase of XGP - no profit.

You, using mental gymnastics to suggest it doesn't mean that is just odd IMO.
"as Microsoft continues to invest in XGP"

You've even quoted that it was losing money 2 years ago from the other reply, so in this sentence what does the "continues" refer to a continuation of? Do you have any alternative thing that continues - other than losing money from investing in XGP?
Yeah, they should stop all investments in Game Pass the moment they turn a profit. Sure buddy. I am sure you can do some more word play in more posts to convince us why we should interpret everything and try to reach the same conclusions you did. Is this some elaborate N Nhranaghacon role play.
 
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Ozriel

M$FT
Because people are underestimating the cost, time and work required for such a thing. People here seem to believe that costs are reduced for new entrants. They're not, they are significantly higher for new entrants. It has nothing to do with simply diverting SoCs instead of putting them in consoles.

Let me paste from the actual document because it's clear people aren't reading it:



And this isn't Sony saying this btw.

This is assuming ‘cloud entrant’ as a player that wants to roll out their own datacenters.

All these advantages basically fade if the competition partners with Azure or Amazon or Google.

Again, you’re not listening. There’s no reason for Sony to build their own datacenter network when they can easily leverage on existing infrastructure.
 

Ozriel

M$FT
By your own estimation, it would take ~23 years of them averaging 3 billion in profit to pay itself off. The reality is that with less exposure and individual sales, it would take even longer. With a CoD competitor, as I mentioned, it would make it impossible.

That is the nature of subscription content from premium content, especially when it's a loss leader. If you can't understand that, you've got a problem understanding basic things.

We can see that with streaming tv content right now. Why you think gaming would be immune makes no sense to me.

The irony of it all for you to claim someone else is struggling with ‘understanding basic things’ while you’re pushing the frankly baffling narrative that ABK would essentially have zero value on MS balance sheets as soon as a purchase is made.
 

Menzies

Banned
Just re-quoting so others can see this strong post that speaks truth to the model these subscription services are built off of. We already have enough proof of it, too, just look at the mass cancellations and downsizing with Warner Bros. following the Discovery merger. Netflix might be profitable now (I think), but that was after almost a decade of losses and having a debt-based model for funding. Several Disney+ shows have had obvious cuts in budget (namely She-Hulk as a recent example) due at least somewhat to lack of profits off the subscription base to keep funding high CG production quality for the amount of shows they keep pushing out.

The only way smaller companies can compete in an industry where the dam holding off rampant mass acquisitions/consolidation busts (which, depending on if or how this MS-ABK acquisition gets approved, could be the thing that breaks the proverbial dam and opens the floodgates) is by making rampant acquisitions and mergers themselves, putting themselves into debt along the way and the ones with shallower pockets having to fold so only the biggest cash-supplied players remain (because they are also able to borrow bigger loans, if they even need to do this).

The wildest part is: there is very little organic demand for a subscription-based future from the majority of gamers. Even on devices where you'd think something like cloud gaming or subscription gaming would absolutely dominate, the former is still niche and the latter is only a thing depending on very specific games or services like Apple+. The dominant model on that platform by far is the F2P & MTX combo....which many console games have already been doing for years. This push for a subscription & cloud streaming future is vastly dominated by the corporations themselves, such as Microsoft, who want to lock in even more vertical control of the content provided to users in their ecosystem and doing so at what they feel would ultimately be the cheapest way possible with the largest profit margins, IF the traditional model currently in place were to fall through.

Problem (in their eyes), is that it hasn't and there are so many roadblocks to keep it from doing so for years if not decades IMO. Sony, Nintendo, Steam...none of these companies are prioritizing cloud streaming or a subscription-based future, because there is very little demand for it by actual customers and that's reflected when looking at the percentage of the annual console gaming revenue market subscription services in general account for, which is like 4% at best. 4%, despite having XB Live since 2004, PS+ since 2013, PS Now since 2015, and GamePass and NSO since 2017. Don't forget other entrants like Stadia, which is defunct, and Luna which is seemingly on life support.

Until there is organic demand from a growing majority of customers for a subscription-based and/or cloud gaming-based future, those things will always only remain nice-to-haves to add value to an ecosystem, but never a replacement for the traditional model. This doesn't gel well with Microsoft I feel because despite them saying for now they are okay with GamePass & xCloud being complementary to their current ecosystem, they obviously want to shift the model from where it is to where GamePass & xCloud are THE foundation of their gaming model going forward, but they're seemingly in need to wait for way longer than I think they realize. The actual demand just isn't really there.

So I think that's why they are pushing ahead with these acquisitions (well, one of a few reasons): to create a perception of value with their product and subscription services and condition expectations among customers going forward, making them more receptive to sub services due to the perceived value they bring relative to buying games at $60 a pop. And as we're seeing, that is having an adverse effect on competitors who are NOT doing this, but it's being pushed by particular fanboys/fangirls and journalists who can't see the forest from the trees. That's probably what they are hoping creates a growing pressure to get Sony (and to a lesser extent, Nintendo) to "buy in" to the idea of competing on their terms, buying publishers wholesales, pivoting their business models towards subscriptions, cloud gaming, or anything that can potentially lessen the perception or impact of the traditional console model like supporting PC more fervently (something Sony has been pushing into in ways I don't 100% agree with, but it is what it is).

I think that's how Microsoft is looking at it and maybe if/when this ABK acquisition is improved, they're HOPING some of the other mega corps like Apple, Amazon, etc. and groups like Sazzy and Embracer, have the confidence to go buying out other big 3P publishers and that will force Sony (and Nintendo) to try buying some to stay competitive in that aspect. But if that comes at high costs for such smaller (financially) companies, eventually they have to fold their hand, and only the biggest companies like Microsoft and Apple would be around to pick up the pieces, amassing even more content to drive even more perception of value, and getting more customers, more revenue, more profit.

But it would be the combination of that alongside other competitors folding (thus reducing options for customers, automatically making companies like Microsoft look more appealing by default) that finally gets something like GamePass, and initiatives like cloud gaming (if the other two platform holders who benefit much more from the traditional console market end up falling off, that gives a company like Microsoft, who want to push cloud gaming hard anyway and move from making/selling hardware that brings them no profit on its own, a reason to phase out making local consoles aside from maybe streaming boxes) serious room to not only grow, but thrive.

....yet at what price?
Microsoft will argue much against this because; -

1) Multi-game subscription services and streaming are nascent markets. They currently won't be bigger than FTP and MTX in large part due to the mobile sector.
2) Such services require content to grow; and by denying acquisitions they jeopardize their success before giving them a chance.
3) There is evidence that there is demand for GamePass due to the subscriber count growth YoY.

"And as we're seeing, that is having an adverse effect on competitors who are NOT doing this" - where?

The comparisons with Netflix are exactly not seeing "the forest for the trees" in my view. This is evidenced by Netflix being a loss-leader subscription service as a business siloed i.e. there is no alternative revenue coming in other than subscriptions. GamePass isn't Xbox. Xbox has shown that whilst GamePass might not be profitble, Xbox is.
 
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PaintTinJr

Member
Who the hell uses EEE unironically? What are they extinguishing? These people only played Minecraft because they liked it and Microsoft paid them for some more promotion(like anyone would do).

Ice Cube Reaction GIF


Thats like saying all platforms should support Vulkan or its EEE. God forbid Microsoft make its own Graphics library for Windows. Atleast, Windows allows you to use Vulkan, on mac they restricted everything to Metal. I don't even have issue with Apple, but don't pretend Microsoft is at committing sin by creating DirectX instead of relying on OpenGL. Microsoft had been trying since early 90s to get console devs to try Windows, so DirectX made sense.

Yeah, Apple making Objective-C and later Swift was also bad. And so were Ximian for creating Mono and FSF for trying to make DotGNU.
Google calls Kotlin the preferred language for Android development and used it for their Flutter. And just like Microsoft, Oracle also took Google to court
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Oh but Microsoft making its own Java variant is "traditional Embrace, Extend Extinguish Microsoft strategy". If you cared about this shit, you would be a Linux gamer not console warring for another closed source walled garden.

Its not going to be the Minecraft you want for console warring either. Its very profitable, gives them a lot of brand exposure, yet you are here trying to pretend Microsoft is disappointed with its existense. OpenGL is not even a competitor, that would be Vulkan. Also Mincraft Java does not use OpenGL, it uses LWJGL and OpenGL through it, otherwise there would have been no mac version after Apple removed OpenGL support.

Oh, those potato PCs can't play Minecraft anymore


Also, Valve dropped OpenGL support in id Tech 7.


Do I have to spend a month staring all day at twitter to understand why an application written in Java is such a massive blow to Microsoft's "evil monopolistic to plans to take over the world using Embrace, Extend Extinguish". Why would Microsoft hate something for being Java based.

thats such a weird way to say they required them to have a Microsoft account.

What were the keywords you were using while googling all that shit? Not that your recent posts gave me any hope

There's way too much in your reply that is incorrect, and no I didn't google any of that. Through covid I had research serving MC for my nephew on a laptop or Raspi, before giving him hardware to serve for him and his friends with potato PCs

Your view about DirectX and J++ are not representative of how they disrupted the natural ubiquity of OpenGL and Java on Windows back at the time, but whatever, the Direct-X-Box means of hijacking all of gaming by a proprietary API is still in full effect, and in the CMA document they even said the following to show how much power Windows - and DirectX by extension - has over PC gaming

Page 66
260. Microsoft owns Windows OS, which is the market leader in the supply of PC OSs. According to the Parties, Microsoft had a share of supply of OSs of approximately [70-80]% worldwide and [60-70]% in the UK in 2022. 315 The CMA has seen evidence that Microsoft’s hypothetical market share of OS software for personal computers used for gaming is even higher than this, upwards of 95%.316 Microsoft’s rivals include Mac OS, Chrome OS, and other Linux OSs.
 
What?

When did Goldman sell their shares? And if that's true it's a really bad sign.

My bad; they bought shares worth $267 million, not sold them. Misread the translation :/

Microsoft will argue much against this because; -

1) Multi-game subscription services and streaming are nascent markets. They currently won't be bigger than FTP and MTX in large part due to the mobile sector.

But Microsoft's goals include to proliferate their subscription model and cloud gaming onto mobile, that's the entire reason for xCloud's existence and why they're offering xCloud on its own now on mobile (in Beta IIRC). And part of the job of these regulators is to make predictive reads on where things could most likely go, using data currently available.

If they were to just wait until the market reaches a point as you describe it before attempting to regulate, well it wouldn't be groups like the FTC or CMA looking into it but other reactive organizations instead.

2) Such services require content to grow; and by denying acquisitions they jeopardize their success before giving them a chance.

This can be counterargued by the fact that Microsoft already have enough teams to provide that content, and can enter partnerships with 3P developers/publishers without needing to buy them outright, like what Sony have done with FromSoft and Square-Enix, or Nintendo with Sega and Platinum Games.

Acquisitions are not the sole means of acquiring content for such services.

3) There is evidence that there is demand for GamePass due to the subscriber count growth YoY.

But that evidence is circumstantial, unless Microsoft can show what methodology they are using to determine that growth. What is the stability of subscribers from month to month? Are the increases in subscribers from the majority getting in at the normal price, or utilizing $1 conversions, MS Reward points, free trails etc.? Because that outright impacts the ARPU.

And the reason that would be important is because it would answer in which ways the service is sustainable: is it completely of its own merit, or is it "sustainable" because of the massive income generated from other larger divisions of the company that can basically absorb any losses and also cover massive publisher acquisitions?

"And as we're seeing, that is having an adverse effect on competitors who are NOT doing this" - where?

Sony lost $20 billion in market cap on the news of Microsoft buying ABK, market value which they never recovered. More and more people have been conjuring narratives to specifically attack Sony for selling their games Day 1 and not providing them on PS+, or releasing remasters for a price, when Nintendo does all of these same things and never gets criticism for them (nor should they, as their audience seem willing to pay for it, but that same fairness by criticizers is not maintained for Sony).

The comparisons with Netflix are exactly not seeing "the forest for the trees" in my view. This is evidenced by Netflix being a loss-leader subscription service as a business siloed i.e. there is no alternative revenue coming in other than subscriptions. GamePass isn't Xbox. Xbox has shown that whilst GamePass might not be profitble, Xbox is.

Actually, that's funny, because Xbox HASN'T shown that it's profitable. We don't get Xbox net income numbers, and neither do shareholders.

So you outright cannot claim that we know Xbox as a division is profitable because Microsoft have not provided net income for the Xbox division in at least a decade. We can assume Xbox as a division is profitable (and I think it is, though whether when weighed up against the losses of the XBO or the RROD expenses of the 360, plus the losses of OG Xbox if that still holds true is uncertain), but we can't factually say it is because Microsoft hasn't factually mentioned if it is to the public or even to their shareholders.
 
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Of all the regulating bodies, only CMA seems to have an issue right now. The others could as well, but it's nowhere near as public.
We do have other regulators that have approved it without concessions.

It'll be interesting to see if they are the only holdouts.
 

PaintTinJr

Member
...
Yeah, they should stop all investments in Game Pass the moment they turn a profit. Sure buddy. I am sure you can do some more word play in more posts to convince us why we should interpret everything and try to reach the same conclusions you did
How would it be investment while making a profit? It would just be a running cost, so would be less profit if costs were less than revenue, no?
 
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The irony of it all for you to claim someone else is struggling with ‘understanding basic things’ while you’re pushing the frankly baffling narrative that ABK would essentially have zero value on MS balance sheets as soon as a purchase is made.

I literally never said that... but go on
 
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