Microsoft Tries to Buy Activision Blizzard

[nonny]

So the FTC has appealed but it also looks like Activision will be formally removing themselves from the share market as early as next week.

It sounds like MS is confident the appeal will be denied and they're planning to close the deal imminently?

Not sure what that means for the CMA discussions but if the appeal is unsuccessful then it seems MS is willing to close everywhere but the UK?

[Neon Ignition]

The appeal isn't a shock but it feels like the FTC going through the motions given how utterly wiped out their argument was. There's speculation that MS might bar Acti-content from Game Pass in the UK as a temporary measure to appease the CMA until their talks are settled but such a move feels like it would be under the impression that the CMA will ultimately allow the deal as the CMA is now in a very difficult position for itself. If the deal moves forward at all in a way where the UK is made an exception then it means that the CMA will have ensured that UK consumers have less choice and availability, the opposite of their aims and they'll be made out as the villains for causing it too. Given the scale of argument defeat they'd be best to get it wrapped up asap.

[nonny]

The whole argument from the CMA circles around cloud though so I don't think MS has to keep Activision content from all of Game Pass, just cloud?

I think you're right though it seems like they will close and take that step locally just until they have an agreement with the CMA as to what the concrete plans are for the future.

As for the FTC it does feel like they are just throwing in their last chip to show they tried everything. It doesn't help their case that they wanted Judge Corley in the first place and left their injunction push so late in the day... I have a feeling that on top of their overall weak case and Corley's final findings might be what gets the appeal thrown out.

That then makes the CMA the last person in the ring looking a bit silly to be honest.

[nonny]

Ok so the FTC lost its appeal last night so it is now very likely that Microsoft closes the deal even with the UK still outstanding.

The CMA has extended into August which shows they're willing to negotiate.

I wouldn't be surprised if Microsoft closes now before Monday when Activision is removed from the stock market.

[Neon Ignition]

Old news but I'd forgotten it, new COD's could hit Day One on GP from 2025

[Cassius_Smoke]

I do wonder if Microsoft will question the validity of Xbox next generation. They've spent a crazy amount of money this gen, and unless some miracle happens they'll be landing in 3rd place again.
Actibliz will bring in bacon, but its cost a **** load, and the expense to keep that machine going will be a chunk too. It feels to me like a break even kind of situation.

[nonny]

I don't think they mind being 3rd for the foreseeable as long as market share shifts and they gain in other markets.

This was about mobile and cloud as much as it was about consoles. Now they have King I think it's going to be mobile where they push most. I think they'll leave Activision to do what they do now on console / pc.

I'm also really interested to see what they do in Switch.

[Cassius_Smoke]

I don't think they mind being 3rd for the foreseeable as long as market share shifts and they gain in other markets.

This was about mobile and cloud as much as it was about consoles. Now they have King I think it's going to be mobile where they push most. I think they'll leave Activision to do what they do now on console / pc.

I'm also really interested to see what they do in Switch.

I think you might be right in that MS are probably going to transition xbox completely to a service, rather than a console gaming company. I think King will give that constant bank of cash because phones and mobile games aren't going anywhere.

[nonny]

I still think they'll be in the console business and I actually think next generation they'll use the same dual level hardware approach we've seen with the Series S/X... but it's more about putting game pass everywhere and supporting devices outside of the standard console/pc space.

I'm sure we will see mobile, tv, cloud support expand so even if they do remain 3rd in consoles sales I'm not sure that matters so much in their overall strategy.

[MartyG]

I wouldn't be surprised if Microsoft closes now before Monday when Activision is removed from the stock market.

They need to close the deal by 18th July, otherwise there's a break fee of $3 billion payable to Activision.

[nonny]

Yeah but that's a break free isn't it? i.e. it only applies if Activision want to walk away from the deal at that point. Surely with the position they'll be happy to extend into August with the new date the CMA has agreed and it won't cost MS anything?

Guess we will see... The CMA is the last card either way.

[MartyG]

It applies if Microsoft doesn't complete the deal: https://www.theguardian.com/technolo...ision-blizzard

Under the terms of the deal, Microsoft must pay Activision a $3bn break fee if the transaction fails to compete by 18 July

[nonny]

https://www.theverge.com/2023/7/16/23792215/sony-microsoft-call-of-duty-cod-deal-signed

Well you'd have to say this will surely have the CMA agreeing now Sony have signed an agreement to keep COD on PlayStation... I'm sure there'll be more cloud concessions for the UK as it seems MS might spin off the cloud stuff to EE (current rumour)... but your main competitor signing up a deal is a real clincher.

[Neon Ignition]

Bet that's the fastest Sony has signed a deal. They'd have been cruciied for sticking to their guns and leaving PS open to zero COD out of choice

[nonny]

It's basically the same deal for COD they got offered earlier... what is interesting is it's not for anything other than COD so other new releases could be exclusive.