Support NeoGAF

[ChuckeRearmed]

But a publicly traded company, it's all about what kind of payout they get. What creatives want doesn't play a role (unless they hold a majority of shares)

The problem is that CMA's decision essentially prevents Microsoft from acquiring anybody as anything can be arbitrary decided to be too important due to "Microsoft having too big advantage in cloud". It is not about COD anymore.

I do expect Microsoft to fight it. Especially if EC approves. Remains to be seen, but this deal has become too political to abandoned at this point.

 

[Heisenberg007]

Hypothetically, the deal goes through. I buy CoD through steam, I then stream it through GeForce Now. Buy a skin. In this scenario... what should the revenue split be of that Microtransaction?

Depends on a lot of other (currently unknown) variables, e.g., the cost/price of allowing GeForce to stream Steam games, etc. But ignoring all that, I'd say 50:50 sounds fair enough in that case.

 

[Topher]

The problem is that CMA's decision essentially prevents Microsoft from acquiring anybody as anything can be arbitrary decided to be too important due to "Microsoft having too big advantage in cloud". It is not about COD anymore.

That's not what CMA said though. They reference Activision Blizzard's massive portfolio and presence in gaming specifically. That in combination with Microsoft's lead in cloud are the main pillars behind the decision. Buying a studio such as Asobo wouldn't get near the scrutiny as Activision Blizzard.

 

[XesqueVara]

That's not what CMA said though. They reference Activision Blizzard's massive portfolio and presence in gaming specifically. That in combination with Microsoft's lead in cloud are the main pillars behind the decision. Buying a studio such as Asobo wouldn't get near the scrutiny as Activision Blizzard.

Well they say than even a moderately increase in Xbox portfolio could be a SLC, but what does It means is yet to be seen.

 

[HeisenbergFX4]

That's not what CMA said though. They reference Activision Blizzard's massive portfolio and presence in gaming specifically. That in combination with Microsoft's lead in cloud are the main pillars behind the decision. Buying a studio such as Asobo wouldn't get near the scrutiny as Activision Blizzard.

The Pandoras Box of this whole thing is where do you draw this imaginary line in what's acceptable and what's not?

 

[PaintTinJr]

The problem is that CMA's decision essentially prevents Microsoft from acquiring anybody as anything can be arbitrary decided to be too important due to "Microsoft having too big advantage in cloud". It is not about COD anymore.

I do expect Microsoft to fight it. Especially if EC approves. Remains to be seen, but this deal has become too political to abandoned at this point.

How do they fight it? The CMA decision for the appeal attempt is likely 9-12months away going by previous blocked mergers on the cma website, By then, ATVI will be due their money, and Bobby will have zero chance to get shareholders to vote on a second deal to keep this going, and the FTC in the meantime can drag Microsoft to federal court using the CMA decision - based on a full market analysis - as important evidence of anti-trust by Microsoft, all while tying up $70b of depreciating cash for Microsoft.

 

[Topher]

Well they say than even a moderately increase in Xbox portfolio could be a SLC, but what does It means is yet to be seen.

Yes, but more than likely lesser SLCs could be compensated with remedies. CMA felt the SLC in this case could not be.

The Pandoras Box of this whole thing is where do you draw this imaginary line in what's acceptable and what's not?

The regulators draw that line. I can certainly see how regulators could put a studio like Asobo on one side of that line and Activision Blizzard be on the other.

 

[Unknown Soldier]

The problem is that CMA's decision essentially prevents Microsoft from acquiring anybody as anything can be arbitrary decided to be too important due to "Microsoft having too big advantage in cloud". It is not about COD anymore.

I do expect Microsoft to fight it. Especially if EC approves. Remains to be seen, but this deal has become too political to abandoned at this point.

Microsoft shouldn't be allowed to acquire anybody based on their prior history with Bethesda. They literally bought Bethesda with the purpose of taking away previously multi plat games from PS. That alone is evidence enough of bad behavior from a company with a long history of coercive monopolist actions and is enough to disqualify them from another acquisition in the games industry ever again.

 

[PaintTinJr]

The Pandoras Box of this whole thing is where do you draw this imaginary line in what's acceptable and what's not?

All mergers above £70m in the UK market get referred to the CMA AFAIK, but as the Zenimax deal passed either the cost or lack of essential IP - in addition to what they already had - meant it wasn't an issue.

 

[XesqueVara]

How do they fight it? The CMA decision for the appeal attempt is likely 9-12months away going by previous blocked mergers on the cma website, By then, ATVI will be due their money, and Bobby will have zero chance to get shareholders to vote on a second deal to keep this going, and the FTC in the meantime can drag Microsoft to federal court using the CMA decision - based on a full market analysis - as important evidence of anti-trust by Microsoft, all while tying up $70b of depreciating cash for Microsoft.

This don't matters in the US because the line for blocking a Deal here is much much higher that in EU/UK.
Like FTC can't even stop Ilumina/Grail of merging in their own administrial court.

 

[Heisenberg007]

The Pandoras Box of this whole thing is where do you draw this imaginary line in what's acceptable and what's not?

It's nothing new. Every acquisition/company is evaluated on its own merit, as a separate case.

If/When Microsoft acquires another studio/publisher, the regulators will look at it separately and whether that acquisition creates an anti-competitive environment or not.

If it doesn't (e.g., Asobo), they would allow it. If it does (e.g., EA), they would block it.

 

[POKEYCLYDE]

Depends on a lot of other (currently unknown) variables, e.g., the cost/price of allowing GeForce to stream Steam games, etc. But ignoring all that, I'd say 50:50 sounds fair enough in that case.

50/50 between who? Steam and Nvidia? No MTX to the game creator? Or 70% to the game creator, 15% to the platform holder and 15% to the streaming service?

 

[PaintTinJr]

This don't matters in the US because the line for blocking a Deal here is much much higher that in EU/UK.
Like FTC can't even stop Ilumina/Grail of merging lmao.

You are missing the point that the CMA decision means it is no longer a theoretical argument the FTC would be making in court, and a judge at a lower court is unlikely to dismiss that - especially from the DoJ/FTC - when it will likely end up at your supreme court and them overruling that judge's decision - damaging that Judges career path.

So the safe money is that the CMA market analysis decision caries lots of weight - even in the US - for the FTC in court, and presents this acquisition and Microsoft with a much bigger problem in the 9-12months before a decision about their appeal attempt is likely rendered (IMO).

 

[XesqueVara]

You are missing the point that the CMA decision means it is no longer a theoretical argument the FTC would be making in court, and a judge at a lower court is unlikely to dismiss that - especially from the DoJ/FTC - when it will likely end up at your supreme court and them overruling that judge's decision - damaging that Judges career path.

So the safe money is that the CMA market analysis decision caries lots of weight - even in the US - for the FTC in court, and presents this acquisition and Microsoft with a much bigger problem in the 9-12months before a decision about their appeal attempt is likely rendered (IMO).

And yet is won't mean that the Federal Court wouldn't accept this case, again the Threeshold for blocking a Deal in the US is much more higher than in UK/EU, just because the CMA found a Problem with this deal, it don´t mean that a Federal Court in US would find it.
Of course at this is stage it's all Theoretical, because they won't need to drag this to a Federal Court with the CMA blocking.

 

[Astray]

That's not what CMA said though. They reference Activision Blizzard's massive portfolio and presence in gaming specifically. That in combination with Microsoft's lead in cloud are the main pillars behind the decision. Buying a studio such as Asobo wouldn't get near the scrutiny as Activision Blizzard.

Also there's a threshold for CMA reviews based on the cost of the deal.

A 69bn acquisition was always likely to face severe scrutiny..

 

[Neo_game]

I think everyone wins if this deal fails. Activision is a huge company in itself, let them do their own thing. Their games will be on every platform, nobody wins or lose

Microsoft I think have more studious than any gaming company or enough anyways to have impact if they make good games

 

[The Pleasure]

 

[Topher]

Been seeing references to the CMA vs JD Sports merger. Found the case details on gov.uk. Just skimmed through a bit, but noted the major milestones.

In this case, JD Sports won an appeal against CMA, but the merger was still blocked.

July 2019 Launch of merger inquiry by CMA

October 2019 CMA begins Phase 2 investigation

February 2020 CMA provisionally found competition concerns

June 2020 CMA blocks merger <-- In MS-ABK case, we are here

July 2020 CMA orders JD Sports to find a buyer for Footasylum

November 2020 CAT appeal finds in favor of JD sports saying the CMA "acted irrationally" in two areas of their findings.

December 2020 CMA appeals decision, but the appeal is denied

March 2021 CMA begins reconsideration of the merger

September 2021 CMA provisionally found competition concerns

December 2021 CMA blocks merger

January 2022 CMA orders JD Sports to find a buyer for Footasylum

August 2022 JD Sports sells Footasylum to Aurelius Group

August 2022 Case closure

JD Sports Fashion plc / Footasylum plc merger inquiry

The CMA is investigating the completed acquisition by JD Sports Fashion plc of Footasylum plc.

www.gov.uk

 

[Topher]

Also there's a threshold for CMA reviews based on the cost of the deal.

A 69bn acquisition was always likely to face severe scrutiny..

Good point. Not every acquisition is even reviewed.

 

[Heisenberg007]

50/50 between who? Steam and Nvidia? No MTX to the game creator? Or 70% to the game creator, 15% to the platform holder and 15% to the streaming service?

The 2nd scenario. 50/50 split of the 30% cut.

 

[PaintTinJr]

And yet is won't mean that the Federal Court wouldn't accept this case, again the Threeshold for blocking a Deal in the US is much more higher than in UK/EU, just because the CMA found a Problem with this deal, it don´t mean that a Federal Court in US would find it.
Of course at this is stage it's all Theoretical, because they won't need to drag this to a Federal Court with the CMA blocking.

I think you are missing the point of how deals get blocked in the US. The DoJ/FTC rule a deal an illegal merger, and then if required need to prove that in court -now federal court going by what others have said about supreme court rulings in recent times.

The CMA decision is a final decision that evidences anti-trust from the merging entities, and evidence not easily waved away as a theoretical argument.

Someone else can probably tells us, but I'm pretty sure the FTC can still sue Microsoft over this attempt, even if they cancel the deal, and seek large damages in fines - for the work the FTC have had to do.

 

[Heisenberg007]

Been seeing references to the CMA vs JD Sports merger. Found the case details on gov.uk. Just skimmed through a bit, but noted the major milestones.

In this case, JD Sports won an appeal against CMA, but the merger was still blocked.

July 2019 Launch of merger inquiry by CMA

October 2019 CMA begins Phase 2 investigation

February 2020 CMA provisionally found competition concerns

June 2020 CMA blocks merger <-- In MS-ABK case, we are here

July 2020 CMA orders JD Sports to find a buyer for Footasylum

November 2020 CAT appeal finds in favor of JD sports saying the CMA "acted irrationally" in two areas of their findings.

December 2020 CMA appeals decision, but the appeal is denied

March 2021 CMA begins reconsideration of the merger

September 2021 CMA provisionally found competition concerns

December 2021 CMA blocks merger

January 2022 CMA orders JD Sports to find a buyer for Footasylum

August 2022 JD Sports sells Footasylum to Aurelius Group

August 2022 Case closure

JD Sports Fashion plc / Footasylum plc merger inquiry

The CMA is investigating the completed acquisition by JD Sports Fashion plc of Footasylum plc.

www.gov.uk

This is very encouraging.

Not for Microsoft though lol.

 

[Bernoulli]

who did this

 

[Topher]

This is very encouraging.

Not for Microsoft though lol.

Yep. Idas posted on era that some are saying Microsoft's appeal is pointless. I can see why they think that after reviewing the JD Sports case.

 

[Unknown Soldier]

I think you are missing the point of how deals get blocked in the US. The DoJ/FTC rule a deal an illegal merger, and then if required need to prove that in court -now federal court going by what others have said about supreme court rulings in recent times.

The CMA decision is a final decision that evidences anti-trust from the merging entities, and evidence not easily waved away as a theoretical argument.

Someone else can probably tells us, but I'm pretty sure the FTC can still sue Microsoft over this attempt, even if they cancel the deal, and seek large damages in fines - for the work the FTC have had to do.

The FTC is welcome to sue anyone they like but it's at best a delaying tactic for most mergers.

That said, MS has a long history of antitrust actions against it including the legendary antitrust case at the turn of the century. If there's anyone that a court will take seriously, it's Microsoft when it comes to antitrust. No judge wants to be the guy who let a potentially market destroying acquisition go through when it's Microsoft after what they pulled in the 1990's.

 

[NickFire]

So the safe money is that the CMA market analysis decision caries lots of weight - even in the US - for the FTC in court, and presents this acquisition and Microsoft with a much bigger problem in the 9-12months before a decision about their appeal attempt is likely rendered (IMO).

No, if they give it a lot of weight the court would be letting a foreign administrative agency testify through hearsay. FTC needs to prove its own case.

 

[Heisenberg007]

Yep. Idas posted on era that some are saying Microsoft's appeal is pointless. I can see why they think that after reviewing the JD Sports case.

2 more years of this? Absolutely! I don't see ABK sticking with this at all, even if Microsoft wants to.

Sony's marketing would have expired long before that 24-month timeline. And ABK would be without any marketing deal at that point. And if the appeal doesn't work out and their acquisition falls through (again), ABK would look so stupid.

They'd be giving their competitors, such as Battlefield, an open ground.

 

[Unknown Soldier]

2 more years of this? Absolutely! I don't see ABK sticking with this at all, even if Microsoft wants to.

Sony's marketing would have expired long before that 24-month timeline. And ABK would be without any marketing deal at that point. And if the appeal doesn't work out and their acquisition falls through (again), ABK would look so stupid.

They'd be giving their competitors, such as Battlefield, an open ground.

More to the point:

Shareholders of ATVI will not vote yes on a second acquisition agreement after the current one expires. No shareholder will now vote to approve a new agreement knowing it's been denied once already. So what the management of MSFT and ATVI do now is no longer relevant.

 

[Topher]

2 more years of this? Absolutely! I don't see ABK sticking with this at all, even if Microsoft wants to.

Sony's marketing would have expired long before that 24-month timeline. And ABK would be without any marketing deal at that point. And if the appeal doesn't work out and their acquisition falls through (again), ABK would look so stupid.

They'd be giving their competitors, such as Battlefield, an open ground.

This is from the financial times:

Microsoft and Activision said they would fight the decision — but is it really worth it?

One lawyer told DD that the companies face an uphill battle in appealing against the CMA's ruling; its decisions are rarely overturned. Another described it as "pointless" and "time consuming".

If they were to go down this route (while still facing separate probes in Washington and Brussels) they would go past the so-called drop dead date when the parties must close the transaction. Several traders we spoke to said it was likely Activision was going to demand a higher price from Microsoft to extend the deadline to keep the merger agreement from expiring.

But do either of the parties still need, or indeed, want a deal? Activision agreed to sell itself following allegations of widespread gender-based discrimination and harassment, which weighed on its shares and created the perfect opportunity for Microsoft to swoop in.

The company is in a stronger place since then and has the earnings to prove it.

As for Microsoft, which also reported strong first-quarter results on Tuesday, it appears to be more of a want than a need, particularly after its well-timed investment in OpenAI-owned ChatGPT earlier this year.

Shares in the company were up more than 7 per cent following the CMA's announcement, indicating that shareholders are happy to leave the deal on the table.

Whatever happens, the saga suggests the CMA will continue flexing its broad intervention powers going forward, further damping the outlook for cross-border M&A.

"We hear very clearly that acquirers are not announcing deals because they are worried about getting blocked by the unappealable CMA," one merger arb investor told DD.

A clear winner should the deal fall apart is rival Sony, whose PlayStation consoles would no longer be at risk of limited access to Call of Duty and other Activision titles, and whose share price had already begun to feel the pressure of consolidation in the entertainment world.

 

[Heisenberg007]

More to the point:

Shareholders of ATVI will not vote yes on a second acquisition agreement after the current one expires. No shareholder will now vote to approve a new agreement knowing it's been denied once already. So what the management of MSFT and ATVI do now is no longer relevant.

True. I said as much in an earlier comment a few pages ago.

Shareholders will not put themselves in the same position (when it has even lower chance of getting approved now than before) when ABK has lost 20% of its target share price. Especially when the alternative is to just cancel the deal and take $3 billion lol.

 

[ChorizoPicozo]

The Pandoras Box of this whole thing is where do you draw this imaginary line in what's acceptable and what's not?

maybe between publishers (especially big ones) and independent developers

 

[jm89]

Been seeing references to the CMA vs JD Sports merger. Found the case details on gov.uk. Just skimmed through a bit, but noted the major milestones.

In this case, JD Sports won an appeal against CMA, but the merger was still blocked.

July 2019 Launch of merger inquiry by CMA

October 2019 CMA begins Phase 2 investigation

February 2020 CMA provisionally found competition concerns

June 2020 CMA blocks merger <-- In MS-ABK case, we are here

July 2020 CMA orders JD Sports to find a buyer for Footasylum

November 2020 CAT appeal finds in favor of JD sports saying the CMA "acted irrationally" in two areas of their findings.

December 2020 CMA appeals decision, but the appeal is denied

March 2021 CMA begins reconsideration of the merger

September 2021 CMA provisionally found competition concerns

December 2021 CMA blocks merger

January 2022 CMA orders JD Sports to find a buyer for Footasylum

August 2022 JD Sports sells Footasylum to Aurelius Group

August 2022 Case closure

http://[URL][URL]https://www.gov.uk...#cma-seeks-permission-to-appeal-cat-judgement

[/URL][/URL]

Yeah bobs gonna wanna take that 3bn and run.

 

[NickFire]

2 more years of this? Absolutely! I don't see ABK sticking with this at all, even if Microsoft wants to.

Sony's marketing would have expired long before that 24-month timeline. And ABK would be without any marketing deal at that point. And if the appeal doesn't work out and their acquisition falls through (again), ABK would look so stupid.

They'd be giving their competitors, such as Battlefield, an open ground.

Can’t see them sticking around longer than required either. There have to be some sort of restrictions on operations while deal is pending I’m guessing. Too much risk if so when they could just take 3 Billion and listen to any future offers from new mansions from bonuses.

 

[Bernoulli]

2 more years of this? Absolutely! I don't see ABK sticking with this at all, even if Microsoft wants to.

Sony's marketing would have expired long before that 24-month timeline. And ABK would be without any marketing deal at that point. And if the appeal doesn't work out and their acquisition falls through (again), ABK would look so stupid.

They'd be giving their competitors, such as Battlefield, an open ground.

i hope if sony makes a new deal they make them lose the reduction on the 30% fee and slowly decreases the marketing
after all the ACTVI people making them look bad and everything

 

[Topher]

Can’t see them sticking around longer than required either. There have to be some sort of restrictions on operations while deal is pending I’m guessing. Too much risk if so when they could just take 3 Billion and listen to any future offers from new mansions from bonuses.

Yeah, the merger agreement specifically says both companies have to go forward in good faith so both ABK and MS have to at least act like they still want the deal done until the conditions for termination are met. Not saying that is what is happening, but I'd certainly bet that are exit stratagems being worked out behind the scenes.

 

[Heisenberg007]

i hope if sony makes a new deal they make them lose the reduction on the 30% fee and slowly decreases the marketing
after all the ACTVI people making them look bad and everything

I doubt we'll ever see those internal details as they're confidential, but I'm very confident that Sony will be able to squeeze a better deal now.

There is no timeline where ABK seeks a marketing deal with Xbox this generation; it's just not happening. Sony is the only viable option left for them. And Sony will get a good deal -- cheaper and with more exclusive content.

Jim Ryan is ruthless.

 

[Heisenberg007]

Yeah, the merger agreement specifically says both companies have to go forward in good faith so both ABK and MS have to at least act like they still want the deal done until the conditions for termination are met. Not saying that is what is happening, but I'd certainly bet that are exit stratagems being worked out behind the scenes.

Absolutely. The veil will fall after July 18. And I can see this as one of the ugly divorces, especially because ABK will try to seek a good marketing deal with Sony.

 

[DrFigs]

I doubt we'll ever see those internal details as they're confidential, but I'm very confident that Sony will be able to squeeze a better deal now.

There is no timeline where ABK seeks a marketing deal with Xbox this generation; it's just not happening. Sony is the only viable option left for them. And Sony will get a good deal -- cheaper and with more exclusive content.

Jim Ryan is ruthless.

I just wonder how that's gonna play out with Sony having its own multiplayer games it wants to push. Especially since these games will presumably also be shooters. It might be counterproductive for Sony to have a marketing deal with COD while it's trying to push Bungie's game, Haven's game, Firewalk's game, and Deviation's game if they're all first person shooters.

 

[Heisenberg007]

I just wonder how that's gonna play out with Sony having its own multiplayer games it wants to push. Especially since these games will presumably also be shooters. It might be counterproductive for Sony to have a marketing deal with COD while it's trying to push Bungie's game, Haven's game, Firewalk's game, and Deviation's game if they're all first person shooters.

Absolutely. Would be fun/intersting to see.

Just my guess: but I think, apart from Deviation's game, the rest of the games would have some USP that would set them apart from COD. I don't see Sony greenlighting multiple games that are very similar to Call of Duty in gameplay, setting and/or style.

 

[Bernoulli]

I doubt we'll ever see those internal details as they're confidential, but I'm very confident that Sony will be able to squeeze a better deal now.

There is no timeline where ABK seeks a marketing deal with Xbox this generation; it's just not happening. Sony is the only viable option left for them. And Sony will get a good deal -- cheaper and with more exclusive content.

Jim Ryan is ruthless.

and about the switch unless they improve next console it's hard to play with joycons wich is what most people use

 

[Bernoulli]

pack it up guys the CMA is finished, they did the reading

 

[feynoob]

pack it up guys the CMA is finished, they did the reading

Our people needs education

 

[Topher]

pack it up guys the CMA is finished, they did the reading

lol.....sure, Microsoft can appeal the penalty to the court of appeals. And CMA can still force Microsoft to divest ABK.

Read more folks!

 

[Topher]

pack it up guys the CMA is finished, they did the reading

Oh.....I found the problem.....

 

[BattleScar]

Some fans still have hope the deal go through.

If Microsoft fired all their British employees because of a British regulatory decision, they would experience the greatest brain-drain you've ever darn seen for a corporation in the history of corporations.

People would not feel so good about their job security if their entire livelihood can be thrown in the trashcan because their employer disagreed with the nation state in which they reside. And rightly so.
Because any day, you could be next. What an absolute clownshow of a tweet.

 

[Captain Toad]

Wonder if Sony will continue to “not pick up the phone” to Activision now or if their relationship will go back to pre-acquisition status. I feel like some of the way these people conducted themselves toward one of their biggest partners would result in irreparable damage to the whole relationship.

These aren't people who were dating and had a bad break up. They are billion dollar corporations whose only concern is doing what makes them the most money.

There is no room for hurt feelings or grudges.

 

[Bernoulli]

If Microsoft fired all their British employees because of a British regulatory decision, they would experience the greatest brain-drain you've ever darn seen for a corporation in the history of corporations.

People would not feel so good about their job security if their entire livelihood can be thrown in the trashcan because their employer disagreed with the nation state in which they reside. And rightly so.
Because any day, you could be next. What an absolute clownshow of a tweet.

they would lose all their studios in the uk

 

[POKEYCLYDE]

The 2nd scenario. 50/50 split of the 30% cut.

The only problem would be Valve's compliance.

I understand Nvidia or other cloud streaming services not getting a cut of the MTX. But in that case I also believe that Nvidia/cloud streamers shouldn't have to get permission to stream the games.

It's a very nuanced problem.

 

[Mibu no ookami]

Any nominal market share that Firewalk and Deviation can take from CoD would be a significant boon to Sony.

Best CoD sold 31 million copies. If Firewalk and Deviation can collectively take even 20 percent of CoD market share directly to Sony, it’ll greatly diminish the value of CoD.

Sony buying Firewalk is a suggestion that they’re very pleased with the progress Firewalk is making on their title. Suffice to say if your company is entirely reliant on one IP, it’s quite dangerous to your longevity and continuity.

I think there are general concerns for Deviation with them losing one of their founders so early, but we’ll see what they’re able to produce.

These games could bomb or they could be massive hits. It’s really Sony’s first foray into investing heavily into multiplayer and of course we can’t forget about Bungie.

 

[BattleScar]

they would lose all their studios in the uk

They would lose everything everywhere.