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UK Blocks Microsoft’s $69B Activision Deal
- GalenErso 4y agoIANAL, but why would it be within the UK's authority to block a merger between two US-based entities? Could, I don't know, Angola or India block similar mergers? Does every country have to approve, or at least not disapprove?
- skrebbel 4y agoI think the logic is that they can’t stop the merger, but they can stop the resulting company from doing business in the UK. Angola can do the same but possibly the resulting company will just ¯\_(ツ)_/¯ and move on. And possibly not so much with India or the UK, which are much bigger markets for these companies.
- GalenErso 4y agoGiven Microsoft's and Activision's respective dominance in their markets, Microsoft could ignore the regulators and keep doing business in the country. The British economy cannot work without Windows PCs, the Office suite, and Azure and OneDrive. And banning Microsoft and Activision's games would piss off half of the under 30 crowd, and by proxy, their parents. It would also be unprecedented for any country to do that.
- qwytw 4y agoI guess they could just impose huge fines instead of banning MS products outright.
- GalenErso 4y agoSure, but if the fine is non trivial, Microsoft could file a lawsuit. It would also be a bad look for Britain to effectively extortionate foreign firms to keep doing business in the country. Whether it's called a "legally approved levy under xyz law" or a bribe to the government is beyond the point. It's the kind of thing you see in corrupt third world countries.
- klelatti 4y agoSorry file a lawsuit on what grounds? You seem to be under the impression that large firms can just ignore the laws of the countries they do business in. That’s not how it works.
- ben_w 4y ago> The British economy cannot work without Windows PCs, the Office suite, and Azure and OneDrive. You're not wrong, but that's almost not a sufficient consideration for the British administration in recent years.
- Mindwipe 4y agoAnd the UK would fine them in excess of any profit generated, and there is the potential for senior MS executives to go to prison, and even possible extradition. There is absolutely no prospect of Microsoft deciding to try and do that. Nil. None.
- GalenErso 4y agoBecause the UK is going to impose extortionary penalties on one of the largest corporations of its no. 1 geopolitical ally at a time when it needs the US more than ever (trade, AUKUS, Ukraine/NATO, F-35s, etc.) and jail their execs. Rishi Sunak would never allow that to happen.
- gbear605 4y agoThe US government is also suing to prevent the deal. They would support the penalties.
- tolien 4y ago> a time when it needs the US more than ever (trade, AUKUS, Ukraine/NATO, F-35s, etc.) Putting aside that there’s technology from UK companies in the F-35 (Rolls contributed to the lift fan in the B model, Martin-Baker ejection seats etc), the US needs AUKUS (as a bulwark to China) and the UK’s contribution to NATO (cf AUKUS and add Russia to the mix) more than the UK does, especially in a post-Brexit world where the UK’s influence is significantly diminished. The EU are also still looking at the deal, with the potential of imposing licensing requirements [1]. 1: https://www.reuters.com/markets/deals/eu-unlikely-demand-asset-sales-microsoft-activision-deal-sources-say-2023-03-02/ https://www.reuters.com/markets/deals/eu-unlikely-demand-ass...
- ThisIsNotNew 4y agoThe US certainly needs UK help on Diego Garcia, which the UK is negotiating to hand over back to Mauritius.
- pmontra 4y ago> The British economy cannot work without Windows PCs, the Office suite, and Azure and OneDrive. It would be a pain but they and everybody else would find ways to cope with that.
- tzs 4y agoI work for a non-UK company that has some online customers in the UK and in the EU. We have to collect each country's VAT on those sales. Before Brexit we used the VAT MOSS system, which allows non-EU companies to register in a single country, collect the appropriate VAT on EU sales, then quarterly send the total VAT collected and a form showing total sales for each country to that single country's tax folks, and that country deals with distributing the VAT to the separate countries. Post Brexit vote we continued to use VAT MOSS (which has since been renamed to something else that I'm failing to remember) although we switched our registration from the UK to Ireland [1] just in case the UK did something stupid and failed to negotiate a Brexit deal in which they remained part of the VAT MOSS system. They in fact did fail to remain in the VAT MOSS system, and so we had to register with the UK for VAT. They told is that the tax office was a bit busy dealing with Brexit so it might take a while to actually issue our VAT registration number, which we need in order to actually pay collected VAT to them. They said that until then we should collect VAT, but not call it VAT, and hold on to it. That was over 4 years ago and we are still waiting. A country that for 4 years and counting has to tell businesses to not remit collected taxes because that country cannot manage to issue the registration numbers that would allow those businesses to file their tax reports is not a country that instills confidence that they could handle something that is actually hard like switching OS/office suite/cloud. [1] In retrospect, we should have used Ireland from the start. Getting registered in the first place for VAT MOSS in the UK had involved a lot of paperwork and time, and the quarterly filings required submitting separate spreadsheets for the UK and the rest of the EU. Ireland registration took a few minutes online. To file we just copy/paste the data from our quarterly VAT report script into a text box on a web form and submit it.
- oneeyedpigeon 4y ago> The British economy cannot work without Windows PCs If that is genuinely true, then the British economy has a BIG problem that it needs to resolve. Alongside all the others, of course.
- georgyo 4y agoYou make it sound like any government should be able to cut ties with any company at a whim. Microsoft and Apple dominate the desktop market, with Microsoft in a commanding lead. Imagine if the UK government said no one could buy SQL Server, use Excel, or buy new windows machines. People and companies would have to spend unimaginable amounts of time learning and migrating to alternative tools while at the same time angry at the government for telling them they can't use the tool of their choice. The same is true for Apple. If the UK government said Apple could no longer do business in the UK, the UK economy would be crushed.
- oneeyedpigeon 4y ago> You make it sound like any government should be able to cut ties with any company at a whim. Well, yes. An individual company should absolutely not be more powerful than an entire state. Yes, migrating away from Microsoft would be painful and expensive, but it must be possible, otherwise Microsoft can get whatever it wants from the UK on pains of pulling its business.
- mr_mitm 4y agoIt's not just the UK. Munich famously tried to get away from Microsoft and failed. The reasons aren't entirely clear to me - rumor has it it's because of some deals behind closed doors - but I think it's obvious that many governments on all levels are fully dependent on Microsoft. I believe China is headed towards independence of Microsoft, though.
- spookie 4y agoI find your argument to be exactly the reason why these acquisitions should be blocked.
- paganel 4y ago> The British economy cannot work without Windows PCs, the Office suite, and Azure and OneDrive I would expect that much of the British Government, including its armed/security forces, rely on those MS products and services. As such, I think that telling a big major US ally "tough luck, you're on your own right now" in the middle of this very tense global political climate is not in the best interests of Microsoft the US company.
- epolanski 4y ago> Microsoft could ignore the regulators and keep doing business in the country No it can't. You are immediately cutoff from payment and transaction systems and you have no legal basis for selling anything in the country. On top of that, there's the obvious factor of being it very simple to completely block you online. Another example, you may not be aware of it, but many companies can't do business in Europe or European countries. E.g. several US media outlets don't want to comply with European privacy laws. If they can't do business in a country they can't, simple as that. Even the rest of your comment is even more ridiculous. A company trying to force its hand against legislation like that is a business-harakiri. You can't possibly think such stuff isn't looked upon by other business actors and governments.
- Zurrrrr 4y agoWhat MS could do, and would make sense, is to just withdraw from the UK Market. I know they won't actually do that, but it would seem they would make more money in the US, Canada, EU and other countries that approve the deal, than they would if they ignore the deal and stay in the UK. Besides which, the UK would relent and ask them to come back anyway.
- diffeomorphism 4y ago> Microsoft could ignore the regulators and keep doing business in the country. Openly breaking the law sounds like a great plan. Do you have a podcast with other great tips like this? E.g. "just don't pay taxes" or "you can steal stuff when nobody is looking".
- CoastalCoder 4y agoTaxes, no. But some examples are Uber (vs. taxi regulations), and marijuana stores in the U.S.
- acallaghan 4y agoIt would allow them to operate but issue heavy financial sanctions and penalties, rather than just disallow them at first - These financial sanctions could swallow up any and all profit from the UK market
- johneth 4y agoMicrosoft and Activision both have assets in the UK, both sell products and services in the UK, and so the UK has a right to regulate their activity in the UK market. Similar situation to other jurisdictions (EU, China, India, etc.)
- oneeyedpigeon 4y agoSo the UK cannot stop the takeover, but it can — of course — block Microsoft from carrying out any business in the UK — and that's, effectively, what's happening here?
- sleepychu 4y agoIs this realistic? The government is heavily reliant on Windows as is much of their economy. It's hard to imagine them evicting Microsoft from the market.
- jalev 4y agoIt's not all or nothing. Microsoft will not be able to sell _gaming_ services in the UK. The other things will be fine.
- spookie 4y agoGiven time and effort it's possible. If such a move were to be done I'm sure every democratic country would be most displeased. Which would in turn, warrant them all the will in the world to completly reform their dependencies on Microsoft. I don't see any reason as to why this couldn't happen, the EU has already demonstrated its concerns on relying too much in certain companies, and they don't have as much of a flagrant issue as the aforementioned agressive move would imply.
- johneth 4y agoPretty much. Microsoft and Activision do both have various subsidiaries in the UK, too.
- ricardobayes 4y ago
- Mindwipe 4y agoThey can block the companies from trading in that country ultimately if the merger happens. Could Microsoft Activision in theory pull out of the entire UK market and still merge (not just gaming, stop selling Office in the UK for example)? Yes. Will they? Absolutely not. There are significant chunks of Microsoft shareholders who don't want to do this deal in the first place and they certainly aren't going to torch the profitable bits of Microsoft for the gaming division, which has terrible financial performance.
- ornitorrincos 4y agoWhen companies are so big that operate in multitude of markets, yes, and depending on how many and the size of those disapproving the merger gets cancelled or parts of the business split, accommodations for those disapproving and so on. Which is why such mergers take a long time. Now, being both based in the US, the US could say no and it would not happen and no need for any other regulator to consider the merger.
- rsynnott 4y agoIn practice, if you're a multinational, doing a big merger, you'll want approval from authorities in at least the US and EU, probably UK (their regulators tend to behave similarly to the EU ones anyway) and maybe China if you do business there. Strictly speaking, _none_ of the regulators can individually stop a merger (even if it's the home country regulator, the multinational can just redomicile) but in practice they all have a veto, because the multinational wants to be allowed do business everywhere.
- justinclift 4y agoThis is good news. :)
- bluescrn 4y agoIs it? Putting MS in charge might have saved Blizzard from Activision. Maybe they'd have brought WoW to Xbox, or done something new with the Starcraft IP. Perhaps even a new Blizzard MMO...
- pbalcer 4y agoBut would have prevented many players from actually enjoying Blizzard games. Personally, I am not interested in purchasing an Xbox or installing Windows on my PC, even if the merger is finalized.
- francislavoie 4y agoThat's not true, they've committed to continuing to release on other platforms.
- bluescrn 4y agoPlatform-exclusive titles have been around for as long as games consoles, that's not going to change. It's annoying that so many great Nintendo games are only available for Switch, and I can't run them at 4k/60fps+ on PC or higher-end console. But that's just how things are. And at the end of they day, they're unimportant entertainment products, we're not talking about monopolies/oligopolies controlling something important.
- Adverblessly 4y ago> It's annoying that so many great Nintendo games are only available for Switch, and I can't run them at 4k/60fps+ on PC or higher-end console. You technically can via emulation, though how legal that is depends on the laws where you are I guess.
- Reason077 4y ago
- samwillis 4y agoOther thread and link to the government release here: https://news.ycombinator.com/item?id=35711913 https://news.ycombinator.com/item?id=35711913 https://www.gov.uk/government/news/microsoft-activision-deal-prevented-to-protect-innovation-and-choice-in-cloud-gaming https://www.gov.uk/government/news/microsoft-activision-deal...
- deleted 4y ago[deleted]
- crims0n 4y ago| Britain’s antitrust watchdog vetoed the gaming industry’s biggest ever deal saying it would harm competition in cloud gaming Cloud gaming? Really? Seems a bit tone deaf. Is the CMA known for not understanding the markets they regulate?
- johneth 4y agoCloud gaming is a growing market – they're preventing the deal on the hypothesis that it will give Microsoft a huge advantage in a growing market.
- crims0n 4y agoIn my opinion, it is only growing because it is bundled with popular subscription services like Game Pass. I don't think the sector has it's own legs to stand on, but time will tell.
- rwalle 4y agoLook up GeForce NOW service. It's going well.
- sofixa 4y agoThe biggest cloud gaming services up until ~1-2 years ago were Geforce Now and Google Stadia (RIP). Xcloud gaming or whatever they call it today was extremely poor (latency and UX issues) and in limited beta, with a very limited library. Nowadays Stadia is dead, Xcloud is kind of usable under the condition you use a controller (which makes it a non-started for pretty much any non first-person game) and pay for Game Pass. Geforce Now is still going strong, has much better and stable quality and is the gold standard.
- tsgagnon 4y agoCloud gaming is a growing market – they're preventing the deal on the hypothesis that it will give Microsoft a huge advantage in a growing market. How does any large company build into a new/growing market without having a "huge advantage"? Do they have to wait until the market is matured from smaller companies before they can get into that market?
- agd 4y agoI'm glad with this decision. Not sure the exact logic makes sense, but in general the top US tech companies (Google, Amazon, MS, Meta, Apple) are too big. They wield huge power and can snuff out entire startup sectors with loss-leading products. The argument is always 'but we don't have a monopoly in this artificially small sector X', however I don't think that argument is the one we should be looking at when the companies involved are $1trillion+. Can we prove exact consumer harm in each case? No. However, I think most people can accept that there's a risk to consumers, markets, and democracy if companies become too big. Edit. Seeing a lot of comments saying UK couldn't function without Microsoft which kind of supports my point.
- pabs3 4y agoPerhaps it is time to split up some of these tech companies? Lots of their ecosystems are potentially separable into different companies.
- 3327 4y ago[dead]
- markus_zhang 4y agoSadly we are probably too late now. Need to dissect them into multiple entities (and maybe create more jobs) earlier.
- snapcaster 4y agoWhat makes you think it's too late?
- markus_zhang 4y agoThey already got enough political power.
- jerjerjer 4y agoMaybe "artificially large"?
- dzonga 4y agomaybe the CMA worded it wrongly in terms of cloud gaming. but the gist of it remains the same. Microsoft wants to weaken Sony's exclusive moat by buying their own big property to make it an exclusive down the line, thereby either increasing the value proposition of Game Pass, or Xbox cloud gaming anywhere. by now Microsoft already knows they're not going to catch up to Sony or Nintendo in terms of console sales. game pass is probably one of the best deals in entertainment though, and by that I mean all forms of entertainment whether sports, film, music etc.
- samwillis 4y agoIt's important to take this decision in the context of the CMA's wider investigation into "Mobile browsers and cloud gaming" https://www.gov.uk/cma-cases/mobile-browsers-and-cloud-gaming https://www.gov.uk/cma-cases/mobile-browsers-and-cloud-gamin... They intended to investigate the cloud/mobile gaming and App Stores, plus look at mobile browser competition (or lack their of on iOS). Sadly Apple, clearly feeling threatened by it, forced it to be stopped on a fairly stupid technicality. Hopefully they will be able to relaunch it soon. https://www.reuters.com/technology/apple-wins-appeal-against-uks-decision-investigate-its-mobile-browser-2023-03-31/ https://www.reuters.com/technology/apple-wins-appeal-against... If this decision re Microsoft+Activision is anything to go by, the wider investigation and potential regulation coming from it could have been very impactful.
- rjh29 4y ago[flagged]
- jerrygenser 4y agoWill this prevent the merger from happening in other markets too?
- jalev 4y agoNo. It's only relevant in the UK. If other regulators want to go forward with it then they can.
- paol 4y agoThat's not how it works. Companies with global presence (like these 2) need to have regulatory permission in every jurisdiction where they operate. If a jurisdiction forbids the merger then they would no longer be able to operate there. Consequently any regulator in charge of a sufficiently important market has de-facto veto power globally.
- drumhead 4y agoNo, but the EU and US regulators will look at the Uk's reasoning for blocking the bid and it may influence their own decisions.
- paol 4y agoThank $deity someone did. Microsoft owning both the biggest platforms and the biggest publishers is a glaring example of what anti-trust regulations should exist to prevent. Every anti-trust regulator in the world would have auto-blocked the merger after 5 minutes of examining the situation. Unfortunately actual anti-trust enforcement seems to have fallen entirely out of fashion.
- ricardobayes 4y agoDo you think this will actually have a good outcome for UK gamers? I can definitely foresee UK gamers not having access to products.
- tombert 4y agoI think I agree, but would this logic apply to Nintendo in the mid-80's? I think that (at least in the United States), the NES was probably the biggest game console, and Nintendo was almost certainly the biggest publisher for it.
- rprospero 4y agoNintendo was taken to court and forced to pay out over anti-competitive business practices. Granted, the specific charge was price fixing and the settlement of sending coupons to consumers was ridiculous, but I could imagine an FTC that wasn’t asleep at the wheel who split the company’s hardware and software divisions.
- jxi 4y agoI'm just glad Activision doesn't get paid out. What a terrible company it has become. Really wish they never acquired Blizzard.
- javajosh 4y agoAnd what a strange end for the mighty Blizzard. I wonder what the owners of Blizzard thought would happen when they sold in 2008. I bet it even mattered to them at that time, at least a little.
- nottorp 4y agoDid it? I don't think Blizzard has ever been in financial trouble, so they sold it just for more money. And we all know the old Blizzard is completely dead now.
- segasaturn 4y agoYeah Blizzard is doomed because of this block. Activision doesn't give a rip about Blizzard's IPs (there's a running joke in the StarCraft 2 community that the game is being maintained by a single unpaid intern). Sad day especially for the StarCraft 2 community who were hopeful about the acquisition saving their beloved series.
- slavik81 4y agoIn 2008, Blizzard was owned by Vivendi Universal, which is a giant conglomerate that owns a seemingly random assortment of media properties. Vivendi has gone through so many mergers, acquisitions and divestitures over the years that I find it hard to imagine them having a sentimental attachment to a particular business unit. Blizzard has pretty much always just been one part of a larger organization. It was sold in the 90s.
- mattferderer 4y agoThis might be a bad time to tell you that they might be getting paid out in terms of $2.5 - 3 billion for the deal falling through.
- jokoon 4y agoI wonder what are the actors who invest in small indie games. It seems like the indie game market is quite a complex, with a lot of bad games, but still a few games of high quality who deserve so much more attention. I really wish there were investors who could better invest in the indie game market and at least take more risks and burn more cash, even if it's socially questionable. Every respectable gamer knows, deep in his heart, that the AAA game business is a horror show. I restrict myself to indie games and I have more and more trouble finding a game that I can actually like and spend time with, it's hard to say if that's because I'm old or if I have very specific tastes or if I set the bar too high. There are a lot of developers out there who are ready to make games, yet it seems the market rarely lets them. Of course, quality matters, but the top reason I want to make games, is because I cannot find games I can enjoy, would they AAA or indie. Important note: I dislike capitalism.
- jxf 4y ago> I really wish there were investors who could better invest in the indie game market and at least take more risks and burn more cash, even if it's socially questionable. The challenge is that many games are labors of love that are fantastically unprofitable. AAA games with microtransactions are unpopular but very lucrative.
- andsoitis 4y ago> unpopular but very lucrative. How do you resolve that oxymoron?
- newsclues 4y agoThere are a small number of whales that support micro transaction games. These games tend to be F2P to have a community for the whales to play with, but the games aren't particularly fun and popular enough to attract a large player base that will pay for the game. Free things that people play because it's free aren't the most popular, they are just available.
- Dudeman112 4y ago
- ricardobayes 4y agoWhile morally I can agree with it, from a pragmatic and gaming perspective I think this is terrible since it will 100% lead to some games not being available in the UK.
- lunchladydoris 4y agoWhy? Revenge? I would think that all parties involved prefer money over revenge.
- mrkwse 4y agoWell it depends on how Microsoft's accountants manage the maths: Hypothetically, if MS + Activision - UK > MS + UK - Activision (assuming it's only blocked in UK), it's plausible that Microsoft withdraws from UK to pursue its business with the merger everywhere else. The UK is a decent sized market, but it's far from the biggest.
- ricardobayes 4y agoThat was also the thought process of many smaller companies to implement EU data privacy rules. It was easier to stop serving the market instead of complying.
- DashAnimal 4y agoThere is another possibility here, which is MS + Activision - Cloud Gaming > MS + Cloud Gaming. I wonder if MSFT is considering that at all. They obviously have the numbers, but I wouldn't be surprised if cloud gaming hasn't seen the growth they expected and it makes sense to kill it entirely.
- ricardobayes 4y agoI personally don't see how it can happen but of course I'm not a corporate lawyer. The parent companies merge so they might keep up some local branch to support the UK market, but how would that be connected to the parent company? What level of separation is needed, in the UK's eyes? Will the UK Activision branch workers allowed to work with Microsoft US? Or would that be seen as evading the ruling?
- rvz 4y agoVery unsurprising. [0] This is just basic horizontal integration and this is the right decision to block this deal. [0] https://news.ycombinator.com/item?id=33518102 https://news.ycombinator.com/item?id=33518102
- kripy 4y agohttps://archive.md/m784j https://archive.md/m784j
- 5350-uiop-1130 4y agomr kotick going to have to buy a smaller yacht i'm afraid.
- smcleod 4y agoGood. Governments should be block FAR more acquisitions. We need more small to mid sized companies and far fewer mega corps.
- jeroenhd 4y agoReally? Cloud gaming is where this gets killed off? I suppose they can't really block the merger for their exclusive titles seeing as all of Microsofts's competitors are the same or worse when it comes to exclusives, but I'm still surprised someone managed to convince these people that cloud gaming was going to be the way this merger was going to bite people in the arse. I do hope regulatory bodies will maintain these decisions across other platforms as well (i.e. Sony's acquisitions, Epic Games) but I'm not sure that's realistic if cloud gaming is cited as the main reason why two tech conglomerates merging is a bad idea.
- thepratt 4y agohttps://archive.is/2mV5g https://archive.is/2mV5g
- TheCaptain4815 4y agoMicrosoft has practically destroyed every major game franchise it’s owned in the past decade and Xbox only exists because it’s being subsidized by Azure. Very happy with this decision.
- edgyquant 4y agoIt’s nice that this was blocked, but they really should have blocked the Bethesda acquisition. Buying the best selling game franchise (Elder Scrolls) and making it an exclusive is a cut and dry anti-competitive move and Microsoft should have been punished for even trying.
- myrmidon 4y agoDisagree somwhat; Age of Empires would be unlikely to do better under any other publisher IMO. The whole Gamepass thing also appears functional to me (i.e. I know people who pay money for it and are satisfied, unlike former Stadia). But I strongly believe that stopping consolidation in that market is a laudable move and am super happy with the decision to block this.
- muststopmyths 4y agoThe new Gears of War was quite good, I thought. Nowhere near as bad as the new Halos.
- nonethewiser 4y agoMinecraft and Mojang studios more broadly did great
- segasaturn 4y agoI know a lot of people here are anti-big tech and I am too, to a certain extent, but I want to play devil's advocate here and provide my case for the deal: Activision-Blizzard was in total corporate chaos before the deal was announced, the CEO (Bobby Kotick) was accused of permitting workplace sexual harassment and employees at the company were on the verge of mutiny. They were also seen as a stagnant publisher that only cared about its billion dollar franchises (Call of Duty and Candy Crush) while letting its other IPs like StarCraft and World of Warcraft rot and turning the beloved Diablo into a cash-grab pay-to-win mobile game. The Microsoft acquisition would have likely breathed some new life into the company and allowed corporate to clean up shop. This will probably lead to Activision-Blizzard continuing on its previous, doomed trajectory that it was on back in 2021.
- newsclues 4y agoMicrosoft needs to clean up Activision-Blizzard, I totally agree. Two big bag companies, but surprising Microsoft is the better one.
- edgyquant 4y agoRight, the merge would have been good for activision and microsoft, but bad for the consumer.
- capableweb 4y agoIf you wanna play devil's advocate, at least try to answer the concerns voiced by the watchdog. The concern is not who can develop the existing IPs the best or if Activision/Blizzard will continue to exist. The concern is that Microsoft already has a strong position, and consolidating it further will make it even harder than it is for new entrants to have any chance. > “Microsoft already enjoys a powerful position and head start over other competitors in cloud gaming and this deal would strengthen that advantage giving it the ability to undermine new and innovative competitors,” Martin Coleman, chair of the independent panel of experts conducting this investigation, said. If you're still up for playing devil's advocate, come up with an argument against that this acquisition wouldn't consolidate anything in Microsoft's favor, and as a result lead to fewer consumer choices.
- kkan 4y agoAnybody who plays games is not happy about this. Activision is the worst of the worst and the Microsoft deal was a chance to make their offering more refined and accessible via GamePass. Especially it was about saving Blizzard from turning into total shitshow. Id this deal will not go through, nothing will change. CoD will remain trash, Diablo IV will have micro-transactions in addition to its $70 price tag.
- sensanaty 4y agoYou really think M$ wouldn't stick microtransactions out the ass out of anything they touch coming from ActiBlizzard?
- diffeomorphism 4y agoAnybody who plays games is very happy about this. Activision is the worst of the worst and the Microsoft deal was a chance to cement this problem or make it even worse.
- newsclues 4y agoNo, unhappy about this. As you say, Activision is the worst of the worst and the MS deal was a chance to change this. You think Activision is going to ditch the terrible leadership and change on its own? haha
- segasaturn 4y agoPer the agreement in the deal, when the deal closed Bobby Kotick would be out as CEO and replaced with Phil Spencer who is VERY well respected in the gaming community.
- pcurve 4y agoMicrosoft has done ok with not bastardizing its acquisitions under the current CEO, no?
- stale2002 4y agoYou actually have to make an argument, which you didn't. The argument for why Microsoft would make things better is that we can look how great Microsoft has been handling similar gaming acquisitions, like Minecraft. Your "argument" though seems to be repeat back someone else statement while saying "Nuh uhh!". Do have an actual original thought here, as for why you think Microsoft would make things worse, when the evidence we have shows otherwise? Or is the extent of your argument "Nuh Uhh!" And "I said the opposite of what you just said!"
- dustedcodes 4y agoHonest question, how does this deal make any financial sense to Microsoft if the plan wasn't eventually to implement anti-competitive practices much later down the line? Just buying Activision and then continue to run it as if they were neutral surely makes no sense. That's clearly not why they want to buy them. I am glad that this deal has been blocked. In fact Microsoft is already too big. It shows in their products.
- AmericanChopper 4y ago> how does this deal make any financial sense to Microsoft if the plan wasn't eventually to implement anti-competitive practices much later down the line? It makes perfect sense. These huge companies have a lot of unused capital, which they have to find productive uses for. Acquisitions in markets they already have competencies in are a rather obvious way to make use of it. Internal R&D and launching new products is the best use of this capital (as it’s the most tax efficient), but it’s difficult to infinitely scale that spending efficiently (but acquisitions can effectively be one way of scaling this over the long term). The alternative is dividends, or the much more tax efficient stock buy back. But long term, acquisitions are better for shareholders.
- etempleton 4y agoMicrosoft also owns Minecraft and they put that everywhere. For Microsoft it is all about GamePass. They want to be the Netflix of games, but to do that they need a large library of games on their service that people want to play to make it a no-brainer subscription.
- dustedcodes 4y ago> They want to be the Netflix of games, but to do that they need a large library of games You don't need to buy Activision for that to happen. Netflix hasn't bought Universal or MGM. They purchase the rights to offer movies on their platform and at the same time produce their own content via their own production. Also Netflix doesn't own the hardware. That makes it very different to Microsoft, who own the hardware, the platform which you speak of (game pass) and also wants to own the production companies. This stinks of anti-competitive behaviour from miles if you ask me and is nothing like Netflix.
- saos 4y agoI’m so happy
- deleted 4y ago[deleted]
- mysterydip 4y agoIf Microsoft and Activision are both US companies, but have international offices, do they have to get approval from every country they operate in? Could they merge just the US parts or non-UK parts?
- capableweb 4y agoYes, both companies have offices around the globe, with corporate entities all over the place. As those have to operate within the laws of the countries they're incorporated in, if they get blocked by some local watchdog, the acquisition wouldn't be able to be completed in that country. More so, the merger is also discussed in the EU in general, which is a bigger market than just the UK alone, and if the acquisition gets blocked in the UK, EU watchdog will surely use that block as prior material for doing a EU-wide block. Hence Microsoft is lobbying both the UK itself and Europe wide for making the acquisition go through. Of course, even if the acquisition gets blocked everywhere but in the US, the US counter-part can still be acquired, but not sure how much sense that would make, they'll probably end up not going through with it at all in that case.
- Firmwarrior 4y agoIf the US part has all the talent and all the profit, seems like that'd still be a pretty viable move, wouldn't it?
- nozzlegear 4y agoOne would think the US part owns all of the IPs as well.
- nonethewiser 4y agoSeems like the main thing of value at this point. It would be great to get rid of the toxic bureaucracy milking the IP.
- fckthisguy 4y ago
- newsclues 4y agoAs a gamer Activision is a shitty big company and while Microsoft is in the same category, Microsoft is an improvement over Activision.
- HumanReadable 4y agoVery sad about this decision. Blizzard has shown itself to be entirely incompetent, and seeing how well Microsoft managed the Minecraft IP I was looking forward to seeing what they could have done with the excellent blizzard IP.
- segasaturn 4y agoMinecraft is a great example of what could have been, for sure. We're nearing the 10 year anniversary of the Mojang acquisition (wow) and Minecraft is still flourishing and as popular as it's ever been. It's kind of amazing how relevant Minecraft has remained all of these years instead of fading into the background as a 2010s fad game. It's also stayed aggressively cross platform, available on basically every device known to man, including a Linux port that's still developed, which throws a bit of water on the fears that Microsoft would turn Call of Duty exclusive.
- edgyquant 4y ago> which throws a bit of water on the fears that Microsoft would turn Call of Duty exclusive. No it doesn’t since Microsoft is doing just that with Bethesda. The Minecraft acquisition was at a time when MS had no good will and needed to earn some, plus it’s a lot of children playing that who can’t be bullied into buying another platform. This is not the case with future releases on games that basically every adult who plays games takes part in.
- saos 4y agoThe CMA have always done a solid job. Glad they blocked this.
- elAhmo 4y agoGood! There is no sane reason to allow Microsoft to own one more company and just become bigger in another market. It has nothing to do with their core business (which is quite diverse to be fair), and as an end consumer, on average, this would just cause harm long term, considering consoles and gaming market in general. One example: Call of Duty. Might not be important for many people, but having CoD become unavailable on the most popular console, just because someone had huge amounts of money and bought a $69B dollar company doesn't sound fair and would be a net loss for the industry.
- PretzelPirate 4y ago> but having CoD become unavailable on the most popular console It would still be available for at least 10 years even if the deal went through.
- mturilin 4y agoCan someone explain how a UK regulator can block a deal between two US companies?
- can16358p 4y agoThey also operate in UK. Of course if they were "just" two US companies UK can't do anything but these companies also have legal presence in the UK.
- Leherenn 4y agoWhat would they have to do if they were to decide that the deal is more important than the UK? - merge everywhere else but the UK (presumably that would mean spinning off/closing one of Microsoft or Activision UK branch). I guess that wouldn't be enough? - both companies have to pull off of the UK?
- can16358p 4y agoIANAL but probably they'd need to leave UK then.
- deleted 4y ago[deleted]
- pers0n 4y agoI wish the US had the guts to do things like this, but I suppose they don't due to lobbying.
- kmlx 4y agohttps://www.eurogamer.net/ftc-suing-to-block-microsofts-69bn-activision-blizzard-acquisition https://www.eurogamer.net/ftc-suing-to-block-microsofts-69bn... > FTC suing to block Microsoft's $69bn Activision Blizzard acquisition
- etempleton 4y agoHow does the CMA reconcile the fact that Sony also has a cloud streaming service and it is larger than Microsoft? If this makes Xbox too big doesn’t it mean that PlayStation is also too big? And how is anyone to compete against Sony if they can’t grow their own exclusive content?
- htag 4y ago> And how is anyone to compete against Sony if they can’t grow their own exclusive content? 1. Xbox Live/Game Pass is still a better service, and one of the best deals in gaming. 2. Microsoft already owns (or has owned in the past) tons of gaming IP. Halo, Minecraft, and Bethesda are huge names. Microsoft Game Studios was used to publish some fantastic games in the past. 3. Cloud streaming is largely theoretical at this point. There's potential, but will customers choose a $20-40/mo subscription instead of buying a ~$500 console every ~5 years. I'm doubtful. The math says it's a bad deal for console gamers and worse performance for the top 1% of the market. Sony's lead here probably isn't the killing blow for Xbox. 4. Microsoft could always make it's own games, instead of acquiring them. 5. Microsoft has some benefits with owning both platforms Xbox and Windows that they have never been able to fully capitalize on. I own an Xbox, a PS5, a Switch, a Steam Deck, a high powered gaming desktop, several arcade games, and basically all the retro consoles.
- etempleton 4y ago> Cloud streaming is largely theoretical at this point. There's potential, but will customers choose a $20-40/mo subscription instead of buying a ~$500 console every ~5 years. I'm doubtful. The math says it's a bad deal for console gamers and worse performance for the top 1% of the market. Sony's lead here probably isn't the killing blow for Xbox.But that is But that is the CMAs argument. That this will make Microsoft too dominant in the cloud streaming space.
- mirages 4y agoCan someone explains me why a UK court is able to block a deal between 2 US corps ? How can they overreach ?
- Jowsey 4y agoPresumably by banning them from business in the UK if they go through with it
- M2Ys4U 4y agoMicrosoft are free to withdraw from the UK market to avoid being regulated by UK regulators. But unless they do, the UK has the right to regulate its own market in the way that they see fit, irrespective of whether that impacts on other markets (modulo international trade agreements).
- desas 4y agoThe two US corps both want to do business in the UK. If the two US corps don't want to do business in the UK, they can feel free to ignore the UK authorities.
- drumhead 4y agoIt only relates to their activities in the Uk. MS would have to either comply with any remedial measures or just stop operating in there.
- unionpivo 4y agoWell if the two US companies that do business in US and with US residents, than UK court would not have any jurisdiction. (And would not even try, it's not like they don't have other things to do.) But in this case, you have two US businesses, that own local UK business and do business on UK soil with UK customers. That is why they fall also under jurisdiction of UK. MS and Activison could close their business in UK, and stop serving their customers and then they would not be affected by UK courts. Bottom line is, if you do business in multiple places, you need to play by the rules of all that places. It's similar how the legislation in lets say California can affect products in all the USA.
- AraceliHarker 4y agoI can’t understand at all why CMA accepts the overwhelming share of the current PS5 high-end game console market for the reason of cloud gaming, which has hardly started up yet, and even if they say “protect the innovation and choice of cloud gaming”, gamers who only have Xbox Series S|X think “if you say that, let me play Collapse: Star Rail or FF16 on Xbox”, don’t they?
- pipes 4y agoHow can the UK prevent two US companies from merging?
- nozzlegear 4y agoNot a lawyer (barrister?) but I’d guess it’s because both Microsoft and Activision have offices/legal entities in the UK as well as the US. I wonder if the decision could be routed by Activision simply closing those offices and exiting the UK? Not saying it should be routed, just openly speculating as an armchair not-lawyer/barrister.
- kmlx 4y agoit's not about offices, it's about competition. if the companies' activities affect competition in the UK then the CMA is responsible. the hint is in the name: Competition and Markets Authority
- nonethewiser 4y agoThat’s not really the question. I could claim authority of you and your family. But what is the mechanism that enforces it? Why would you recognize that? Why would Microsoft listen or care about the ruling? It’s because they operate in the UK. The CMA can’t just regulate companies that don’t operate in the UK.
- dopeboy 4y agoI was wondering this too. Does this also affect whether they can do business there?
- sofixa 4y agoWelcome to globalisation, baby. Very few companies are in one country exclusively, and are thus subject to the laws of any country they operate in. That's why Google pulled out of China years ago, to not be subject to Chinese laws (even though they're a "US" company). For reference, both Activision Blizzard and Microsoft have very significant presence outside of the US.
- klelatti 4y agoFrom the FT: Activision, maker of the hit game Call of Duty, said the ruling “contradicts the ambitions of the UK to become an attractive country to build technology businesses”. It labelled the decision a “disservice to UK citizens, who face increasingly dire economic prospects”, adding: “the UK is clearly closed for business.” What a petulant response.
- gtm1260 4y agoDoes anyone else think its crazy to unwind these acquisitions years afterwards? Where the companies have already been operating as a single entity for years?
- endianswap 4y agoWhat are you talking about? The deal hasn't closed yet AND was only announced a year ago.
- Laaas 4y agoHow come the UK has the ability to block two American companies from merging? Why can't they just ignore the CMA?
- kmlx 4y ago> If the merging parties were to ignore the CMA's decision they could face significant legal and financial consequences. For example, the CMA could fine the companies, force them to unwind the merger, or take legal action to enforce its decision. Additionally, ignoring the CMA's decision could damage the companies' reputation and relationships with UK customers, regulators, and stakeholders.
- CodeWriter23 4y agoCloud Gaming is always going to fall on its face, like Stadia, for one simple reason. Latency. It’s bad enough when latency interacts with multi-kilobyte telemetry messages in the client-rendered model. Cloud Gaming replaces that messaging with pumping multiple megabytes of video data to one’s screen.
- jeremyjh 4y agoDo you have a lot of experience with this? I have used GeForce Now to play Fortnite and other games for years and I think it works great. I’ve also used PS Now to play Bloodborne which is very sensitive to feel and timing and that works well too, it actually plays better there than it did on the original PS4.
- dopeboy 4y agoAdmittedly I was coming in with the same perspective as OP so I wasn’t aware you could smoothly play triple A titles via streaming. No catch, no hang ups?
- smolder 4y agoThe catch as stated is slightly worse input latency. You can still win games. It might feel fine to you. But even a practically imperceptible 10-20ms of extra input lag compared to the gamers with their own hardware puts you at an unavoidable statistical disadvantage. You will be 10ms too late with aiming your shots some percentage of the time.
- beebeepka 4y agoWhat about latency, though. Fortnite may be possible but Quake or StarCraft? Sure, on the lowest of the lowest of tiers. People used to say 24 fps was great, too. Only took us 20 years for the masses to catch up. Anything below 120 feels sluggish to me. At 60 fps local, I move my mouse and the picture is changed after what feels like an eternity. Can't imagine cloud rendered 60 being better. In fact, it's guaranteed to be worse.
- deepzn 4y agoProbably consumers might benefit from concentration of gaming titles within Xbox for more seamless experiences. But, arguably very destructive in the long run. As this is a major INDEPENDENT studio, not only for multiplatform but also for deciding the titles/projects they produce. As we see with the HBO Max/Discovery merger, once companies merge, they have the option to close or end projects, that is destructive to both consumers and the creators of those. Furthermore, these are trillion dollar companies, that are almost getting if not already way past the size of "Too Big To Fail". These companies need to be reigned in, if we are trying to create mobility in the private sector, as well as consumer choice, and avoid monopolization currently already in tech.
- runako 4y agoMicrosoft has to be calculating whether to (temporarily) pull out from the UK as a result of this. Their sales there are in the neighborhood of $5B annually (~2% of their overall run rate). Add a guess of $500m for Activision's UK sales for a total of $5.5B. The hit to sales would be temporary; the UK government would eventually capitulate as their citizens revolt at not being able to buy Windows or Office. (Yes, there are other options but a sudden loss of access to Microsoft products would be devastating.) Based on the numbers, it's not clear to me that the UK has the leverage to stop this merger. If they were still part of the EU, this calculus wouldn't begin to make sense.
- d3ckard 4y agoThat would be a country/corpo war and too cyberpunk to my taste. I don’t agree with the decision, but this is not the way to solve this.
- runako 4y agoThat's the interesting thing here. Unlike recent regulatory actions by the EU, there doesn't appear to be a solution provided other than to let the UK CMA make business strategy decisions for Microsoft. I don't think it is necessarily how Microsoft will proceed, but it would be irresponsible for them not to consider such an approach. I also do think the CMA is overplaying its hand; sooner or later they will make a decision like this and a company will pull out of their market. Alone, they simply don't have the economic heft to regulate global companies domiciled outside their borders.
- segasaturn 4y agoI highly doubt that Microsoft is going to go nuclear to acquire ABK. I don't think this merger is do or die for them. It would also do irreparable harm to their brands, including the UK Xbox owners who would no longer be able to play their games!
- seatac76 4y agoMS cannot possibly do this, it would mean giving up any business with NATO. It’s insane to me that a game studio acquisition gets such emotionally charged responses.
- _cenw 4y agoI really wish we could have a different kind of competition in gaming (and some other sectors). I miss the good old days when everything was on Steam. I wish there was some middle ground between everyone paying 30% to Valve and running 10 launchers at once. And now, with subscription models making their way in, it even more closely resembles the development of Netflix. There should be an industry standard launcher, just as there should be an industry standard cloud gaming standard. As it is now, only one of them is really usable with reasonable latency where I live, and it lacks a lot of games because NVIDIA refused to put their foot down on "we just provide a computer, not a platform". This competition is parallel worlds that pretend their competitors do not exist and where customer choice doesn't exist (unless you're really not picky about what to play).
- nonethewiser 4y ago> I miss the good old days when everything was on Steam. Well, this is 1 step further from everything being on gamepass
- Vt71fcAqt7 4y agoIn general I agree that Big Tech is too big or is in some way anticompetitive; In this case however there is no threat in my opinion. Video games are not a utility and have no control over utilities unlike eg. Amazon (where we can debate what control Amazon has). That to me is the most important factor. Besides that point, there is no inherent anticompetitive element to one company owning a large portion of the video game market because it does not prevent others from competing. Anyone can make their own game, and indie games succeed year after year, even if 99% fail. The real issue is tying computers to software. Computers and software need to be considered two markets. Computers are a utility, whereas software is sometimes a utility. But by tying software and computers, these tying companies use their software to be anticompetitive in the hardware market. That is, any software which does not run on an untied hardware system is anticompetitive even if it has procompetitive effects. All this is to say that we need the Open App Markets Act to pass. (This is all ignoring the OS market and the hardware and software tying that exists in it, which is more difficult to discus, but in my opinion system calls are anticompetitive as well by nature with the exception of a theoretical standardized set of system calls.)
- jimmydorry 4y agoAnti-competition bodies are designed to regulate more than just utilities. Are you really saying that Microsoft can't exert undue influence on all other games and software studios to unfairly compete in the gaming segment... even though they would be controlling the operating system developed on and targetted to... let alone their extensive cloud and console providings that they could simply deny to the competition? In such a landscape, indie devs would be powerless.
- Vt71fcAqt7 4y ago>Anti-competition bodies are designed to regulate more than just utilities. I was looking for a better word than "utility" but couldn't think of one. What I mean is that games are unimportant. Grain is a "utility" for me as are computers ect. And I don't think it matters what Anti-competition bodies are "designed" to regulated as I am already giving my own opinion on what I think they should do so for me this isn't a such an important point. >even though they would be controlling the operating system developed on and targetted to... That is the issue exactly, which was my whole point. It's an issue irrespective of whether they have 1% or 99% of the video game market. They are the hardware/syscall railraod by which developers ship their software oil. But large marketshare alone is not an issue, and can be assured to be a non issue with something like the Open App Markets Act whereas in something like grain or computers it is almost impossible to show whether a dominant company has used their monopoly to hurt competition. If we just give some basic rules as to allowing users to decide how to use their computers we won't need to care about how large any video game company is.
- greenyoda 4y agoArchive with full text of article: https://archive.ph/B5GYo https://archive.ph/B5GYo
- shubb 4y agoProbably good for Microsoft- the acquisition was agreed at bubble prices, and driven by copying a business that hasn't worked out. SEA Ltd had great promise in 2021 - they made a hyper popular game and used those revenues and user mindshare to branch out into ecomerce, financial services and all sorts. It was seem as an important part to cradle snatch Gen A before they signed up to meta and amazon. With metaverse ideas also peaking it seemed like a must do strategy for every conglomerate to get into games. Amazon did too! In 2022, SEA and Meta are not healthy. Thier plan to invest heavily and get paid later does not make sense in a higher rate environment where the payoff is less than you'd make saving your money in bonds. Microsoft has a long term interest in games, but it doesn't need to supercharge it. There are better uses for the 70 billion.
- shudza 4y agoHow come the UK is the one that blocks this? Aren't those US based companies?
- NicuCalcea 4y agoWith British employees and customers.
- chaosbolt 4y agoWhat am I missing here? I thought both Microsoft and Activision were American companies, why would the UK even have a say in this? Is it a "if you buy it you can't operate here" kind of statement?
- fnbr 4y agoI was about to ask the same thing. Why does this matter? It's like when the Canadian Parliament subpoenaed Mark Zuckerberg- he just ignored it [1]. [1]: https://www.cnn.com/2019/05/27/tech/zuckerberg-contempt-canada/index.html https://www.cnn.com/2019/05/27/tech/zuckerberg-contempt-cana...
- nonethewiser 4y agoNever demand something which you can’t enforce. Signals major weakness.
- summerlight 4y agoNot only the UK government still has a significant power to leverage here, but also corporate doesn't usually want to directly go to war against governments since that's going to be an alarming signal for all other governments across the globe, especially EU who is actively seeking a way to regulate US big techs. Even US cannot protect them without a good justification.
- Culonavirus 4y agoThat's my understanding too. At the end of the day, I'm sure this will be a PITA, but what stops Activision from spinning off its UK business operations into a separate entity that will not be part of the Activision-Microsoft deal? Not to mention that the only part of distribution this can affect is the physical one. I mean, if I want to sell a game on Steam and sell it in all the regions Steam operates in, I can do so without needing a business presence in every individual country...
- nonethewiser 4y agoThat’s a good question. I don’t recall ever seeing something like this happening.
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- kats 4y agoAt least they fired all those people for sexual harassment. 37 fired and 40 written up. Goes to you can really change a bad workplace culture, it just takes 69 billion dollars.
- sylware 4y agoIs this true? The dev studio of redfall was bought by msft, then the playstation build was scraped. If true, I would have expected msft to be more cunningly smart, namely to provide a playstation build... but significantly worse than the windoz/xbox builds. The only way msft could restore confidence would be to provide top notch elf/linux builds of ALL games of ALL its studios (not a few games here and there, and hardly any "significant" ones). Idem for sony though.
- sam345 4y agoThis strikes me as trying to mandate a particular market structure while at the same time claiming free market motivations. At what point will big tech structure themselves in such a way as to avoid certain over-regulated regimes.
- kman82 4y agoMicrosoft is an American company. Activision-Blizzard is an American company. I get that the UK is an important market but how can their regulators block a deal that possibly most of the rest of the world wants. Who determines that the UK has the power to block this? Can somebody legally explain this to me ELI5?
- ender341341 4y agoTheir market power is what determines it, if Microsoft wants access to that market they have to play by that markets rules. They'll have to decide if owning Activision is worth more than having access to the UK marketplace & talent pool.
- topherPedersen 4y agoThis didn't make sense to me either. Microsoft and Activision-Blizzard should just ignore them, they don't have any jurisdiction over American companies. Microsoft probably has more power over the UK than the UK has over Microsoft. Imagine if all the Windows machines quit working in the UK. Shit would probably fall apart real quick.
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- 123pie123 4y agoI really doubt that it would happen real quickly. but it would be a very stupid move for MS/ Azure It would highly likely lead to the downfall of MS (in the EU/ europe anyway) with the UK putting massive amount of money behind a version linux. ie look at what google did to linux for the mobile phones! and remember what apple did to unix? .It would also allow the EU to kick MS massively - Germany has been trying to go for linux for some time even the US is trying to block this merger https://www.eurogamer.net/ftc-suing-to-block-microsofts-69bn-activision-blizzard-acquisition https://www.eurogamer.net/ftc-suing-to-block-microsofts-69bn...
- topherPedersen 4y agoHow can they block a deal between two American companies that trade on an American stock market? Can't Microsoft & Activision just ignore them?
- aio2 4y agoWhy is no one talking about 69
- wdb 4y agoWondering what they will decide on the Adobe/Figma merger which is actually a bad deal for consumers. Disappointing decision from CMA in my opinion.
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