14 ms·

Ignore Microsoft’s whines about the Activision takeover. The CMA did its job

216 points by mrkramer 3y ago

kevingadd 3y ago
Aside from the other arguments in the article: "The chair of the CMA, its chief executive and the rest of the board are appointed by the business secretary of the elected government" if I'm reading this correctly, UK citizens elect a government, the government appoints a business secretary, and then the business secretary appoints the entire CMA? So that would be two layers of disconnect from the voter. AFAIK most US agencies are similarly disconnected or worse. Whether "unelected" is a meaningful criticism to level at government systems is a separate question though. I feel like most roles are not ones where the voter could realistically have enough knowledge or education to actually make good decisions about who to appoint to roles with obscure or complex mandates. We seem to take democracy as an absolute good in all cases sometimes even though uninformed decisions can have catastrophic effects. EDIT: I really shouldn't have to clarify this but apparently we're at the point where "this article poorly argues its thesis" is interpreted by some readers as "I love monopolies and/or activision"? So to be explicit: I think we need more antitrust enforcement, not less, but the article seems to make this case in a clumsy if not deceptive way
- permo-w 3y ago
  what would you propose as an alternative?
  - kevingadd 3y ago
    I'm not convinced we need an alternative in this case. The article proposes that Smith's complaint is uninformed, but it seems more likely that his alternative might just not be any better.
  - 7952 3y ago
    Not the parent. But maybe the courts are an alternative model for making these kind of decisions. Let the different parties make a case and then have an independent judge decide it as a question of law.
- kranke155 3y ago
  This was the right decision
  - kevingadd 3y ago
    My comment does not express even light disagreement with the decision.
- fafqg 3y ago
  >"The chair of the CMA, its chief executive and the rest of the board are appointed by the business secretary of the elected government" if I'm reading this correctly, UK citizens elect a government, the government appoints a business secretary, and then the business secretary appoints the entire CMA? So that would be two layers of disconnect from the voter. You should see the European Commission.
  - kevingadd 3y ago
    In what sense? I'm not complaining about it, just observing that the article appears to defend it as elected when it is unelected. Smith's complaint potentially being factually true doesn't make it a valid criticism.
- dingledork69 3y ago
  Direct democracy is not a good idea, unfortunately.
  - kevingadd 3y ago
    Yeah, implicit in his complaint is that it is the ideal and would somehow "fix" this ruling. I wish the article confronted that assumption directly instead of attempting to discredit his complaint.
  - Red_Leaves_Flyy 3y ago
    Citation?
    - dingledork69 3y ago
      - dingledork, 2023-05-01
    - sofixa 3y ago
      Take a look at Switzerland. Universal suffrage only became universally applied when courts forced the last holdout cantons, in the 1990s. They also recently refused decarbonision efforts because those would result in higher taxes. Masses of common people are fundamentally unprepared for voting and compromising on important and complex legislation. That's why (supposedly expert) agencies and lawmakers exist, to handle that with some higher level goals and objectives and strategic thinking.
      - Zpalmtree 3y ago
        Switzerland seems to be doing pretty well? Why do you think they have to vote for the policies you want for it to be a good idea?
        kevingadd 3y ago
        Are you unironically arguing against universal suffrage as a policy?
- eynsham 3y ago
  > not only unelected but unaccountable Well direct democracy for everything is a consistent position but I doubt that Microsoft unironically thinks that all appointed government posts are unaccountable.
- scatters 3y ago
  The UK elects a parliament, and parliament appoints a government. So there's an extra layer.
- anonymous_sorry 3y ago
  > If I'm reading this correctly, UK citizens elect a government, the government appoints a business secretary, and then the business secretary appoints the entire CMA? So that would be two layers of disconnect from the voter. The business secretary would typically be an elected as a member of parliament (MP, equivalent to a congress person). The leader of the majority party in parliament will form a government, mostly appointing elected MPs to government roles. So the business secretary has been elected, but not as business secretary. This is ignoring the absurdly anachronistic House of Lords, the upper chamber of parliament, who are mostly life appointments by various governments over the years (but also includes some hereditary peers, and an assortment of senior Church of England bishops). Lords can also be appointed to ministerial positions, although typically not the biggest jobs.
endisneigh 3y ago
What would happen if Activision is acquired anyway by Microsoft? Could they simply exist as two separate entities in the UK, and a unified entity elsewhere? With all of the repercussions that entails for the users? Or simply they exit the market in the UK?
- actionfromafar 3y ago
  I don't think Microsoft wants to find out.
- etempleton 3y ago
  I think they could possibly say that they will move forward with the merger, but cease to publish or sell games in the UK, but I very much doubt they would. The UK is still too big / profitable of a market. As an aside, it is interesting to see how this merger is received in the tech space vs gaming space. Most folks in gaming seem to welcome the merger because Activision has long been anti-consumer / bad stewards of game franchises, and many people feel positive about the direction of the Xbox division as of late. I also think the CMAs rationale for their decision is bizarre and shows a lack of understanding of the space. I can’t help but feel much of European tech regulation is about feeling out of the loop on tech and a certain fear of falling even further behind the United States and Asia.
  - Hamuko 3y ago
    >cease to publish or sell games in the UK Wouldn't they need to cease all Microsoft activities in the UK? It's not some Microsoft Gaming Corporation that wants to buy Activision-Blizzard, it's Microsoft Corporation.
    - etempleton 3y ago
      It is possible they would have to pull out entirely, that is what Microsoft’s lawyers are threatening could happen, but it won’t. It is too costly for both sides. It is a challenge for Microsoft, but honestly I don’t know how much sway the CMA has here. They don’t have a ton of leverage to block the deal if every other country is onboard. My guess is they will ask for some specific concessions.
hourago 3y ago
Microsoft basically said that the UK is a bad place to do businesses because they didn't got what they wanted. An extremely entitled and childish comment coming from someone that should know better. Microsoft is showing its most unprofessional and belligerent face going back to the worst times of the company. Remember the FUDs about Linux, the lies about DR-DOS, ... Microsoft is back and needs to be corrected.
- nbevans 3y ago
  Brad Smith is definitely part of the old guard. Joined in 1993. His remarks the other day are going to age terribly. He's basically everything Ballmer was but as a lawyer. But, we should expect more of this if mega corporations are allowed to continue growing their market caps beyond the GDP of G7 nation states.
  - gruez 3y ago
    >if mega corporations are allowed to continue growing their market caps beyond the GDP of G7 nation states. ...which is a pointless comparison because the two things being compared are different units entirely. The former is basically the lifetime value with discounting applied, whereas the latter is income from a single year.
- capableweb 3y ago
  I don't know how anyone fell (or continues to fall) from companies acting like the good guys when things are hard for them, because as soon as they can, they'll abuse their position. And this is not specific to Microsoft, it's every public company driven by shareholders. Why would anyone expect anything differently here?
  - Red_Leaves_Flyy 3y ago
    If this trend is that predictable someone should get their phd studying it, write a book, and get hired by banking lobbyists to stfu.
- ff2400t 3y ago
vxNsr 3y ago
What I find interesting is MS has until July to close this deal but the FTC case only starts in august. Also the FTC is also suing to prevent this case from closing… if two of your biggest markets are trying to stop you from closing your deal, maybe just stop.
daniel-s 3y ago
I don't mind the complaint about CMA being undemocratic because it's a council of unelected bureaucrats, it's just trash-talk from someone that didn't get what they wanted; to be expected. IMO the reason why this decision is really dumb is because the reason given was cloud gaming. I think that people are missing this. This isn't a market. Almost nobody plays on cloud gaming platforms, like Stadia which recently closed down, or similar. The idea of blocking a deal because maybe this technology will become much more popular one day and maybe Microsoft will be the success is IMO dumb. It's just a dumb argument. Concerns about CoD and PlayStation at least make sense, but not given here.
- nbevans 3y ago
  Does "cloud gaming" encompass things like Xbox Game Pass though? Subscription model with downloadable access to all games definitely feels cloudy to me.
  - haunter 3y ago
    No >The cloud allows UK gamers to avoid buying expensive gaming consoles and PCs and gives them much more flexibility and choice as to how they play. 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... YET they next sentence >Allowing Microsoft to take such a strong position in the cloud gaming market just as it begins to grow rapidly would risk undermining the innovation that is crucial to the development of these opportunities. Which is really funny considering the closure of Google Stadia, so maybe it was a 4D chess move by Google after all
    - mattferderer 3y ago
      I haven't read anything that makes the CMA look good yet & I'm trying to be impartial. If this is there definition of cloud gaming, how do phones come into play? They seem like a far bigger market that doesn't require additional hardware purchases specifically for gaming. You can hook them up to popular video game controllers & your TV. No latency issues, which Microsoft won't be fixing in cloud streaming type games without insane investments near users. The article in the headline doesn't actually give any good reasons & I can't find any solid reasons by any of the people cheering on any Microsoft hate. If you want to call Microsoft a monopoly & hate on them, there are tons of great & current examples but this just doesn't seem to be one. It's equivalent to blowing the whistle & calling a penalty on some random person for no reason because five plays earlier someone else on that team got away with one.
rvz 3y ago
The CMA has indeed done its job. Microsoft is just throwing a tantrum over the CMA in the UK having a backbone to see for what Microsoft really is doing and this horizontal integration of existing multi-billion dollar franchises is bad for gamers. Even the UK Government isn't buying into Microsoft's bullshit of bringing title like Call of Duty to Nintendo Switch just to close the deal. [0] Microsoft hasn't changed their anti-competitive behaviour. The methods are different but the strategy is the same, which they have gotten very clever over the decades. [0] https://arstechnica.com/gaming/2023/04/uk-government-says-the-nintendo-switch-cant-handle-call-of-duty/ https://arstechnica.com/gaming/2023/04/uk-government-says-th...
- AshamedCaptain 3y ago
  > Microsoft hasn't changed their anti-competitive behaviour. And the biggest evidence of that is that MS still uses their monopoly to step over Linux and other OSes at every chance: > We found that the Microsoft Cloud Remedy had several shortcomings: [..] Microsoft would not have to supply Activision’s full range of games to providers that may decide to operate using a non-Windows PC operating system (eg Linux) They literally would only allow competitors to gain access to Activision's catalogue if they promised to use it with Windows and only Windows. I'm sure Be and others are having flashbacks. I am, at least. And the worst part is that the EC would have very likely bent over and accepted this. Now I will never know, since the UK rejecting it makes it toxic.
drumhead 3y ago
I think a lot of people are ignoring MS. It does seem more like an I'll judged emotional outburst than a reasoned reaction. The competition authority in the UK is well respected so their conclusion is going to be given great weight by the EU and the US. Given the EUs track record, they're likely to be stricter than the UK, so the CMA adjudication is a good forward indicator that the deal is basically dead.
- Silhouette 3y ago
  The cheap shot from MS about the EU was particularly juvenile. They can't seriously expect a more generous hearing from the bloc that has repeatedly hit big US tech firms with regulations and disguised taxation over the past few years than from the relatively business-friendly UK. They're just hoping to put some kind of pressure on the government in the UK because Brexit makes comparisons between the business environments in the UK and EU a touchy subject right now. Given that it wasn't even the UK government who made the call here that probably won't achieve much. Would the UK government really change the fundamental rules of the game to override the CMA just because the regulator did its job? Doesn't seem likely. Literally all of the commentary I've seen about this from any source not connected to Microsoft or Activision is taking the view that it was the right call by the regulator.
- dogma1138 3y ago
  The CMA tends to be the strictest of the bunch (the same pretty much goes for all UK regulators e.g. compare the FCA to the likes of BaFin) their policy focuses on prevention not management and they tend to forecast further into the future than their European or American counterparts and most importantly they aren’t looking only at issues that can emerge within their respective market but any market that could have impact on the UK down the line.
andrewstuart 3y ago
I think people expect the big money always wins.
criley2 3y ago
I think it's fair that Microsoft is upset that they cannot do what their competitors have already completed. If the UK proceeds with a mandatory breakup of Sony's holdings, I would then approve of how they're regulating the market. If they, however, allow one titan to build an unstoppable first-party monopoly but bar only some of the competition from catching up, then I have serious concerns and misgivings with the misguided protection of the existing #1 business.
- manuelabeledo 3y ago
  > I think it's fair that Microsoft is upset that they cannot do what their competitors have already completed. Microsoft buying Activision-Blizzard would create the second largest gaming company in the world by revenue. In comparison, Sony's largest acquisition was Bungie, which was 30x smaller than Activision-Blizzard. Also, the ruling specifically addresses cloud gaming, not consoles.
  - aardvarkr 3y ago
    I think they’d be the third largest behind tencent and Sony
snowski3 3y ago
If you read the report then the CMA comes across terribly. They don't understand basic technical facts. Apparently a competitor to Microsoft told the CMA that they solved latency issues with cloud gaming by increasing GPU power. Someone should alert the nobel prize committee about conquering the speed of light. They make other bizarre claims like apparently everyone that subscribes to xbox game pass does so for cloud gaming. Cloud gaming isn't even offered in most markets. There is no way people are subscribing to game pass for cloud gaming, its not even good. Its obvious to anyone with a brain that peer-to-peer is the way forward with game streaming because it solves the latency problems.
- COGlory 3y ago
  >If you read the report then the CMA comes across terribly. They don't understand basic technical facts. Apparently a competitor to Microsoft told the CMA that they solved latency issues with cloud gaming by increasing GPU power. Someone should alert the nobel prize committee about conquering the speed of light. This is because input latency goes down if you run at a higher framerate. Nvidia worked on this and published some data on it. It's real. >They make other bizarre claims like apparently everyone that subscribes to xbox game pass does so for cloud gaming. Gamepass includes Xcloud. Not sure what your point is. CMA made a true statement.
  - snowski3 3y ago
    Total input latency, not network latency. Referring to the issues with cloud gaming by discussing input latency is pretty spurious. I'm sorry but no, this not correct. XCloud is not available in most markets that Gamepass is present.
    - COGlory 3y ago
      It is in the UK though, which is where the CMA operates
      - snowski3 3y ago
gdsdfe 3y ago
this is honestly the most bizzare story in gaming ... first you have Sony that claims this acquisition will give MS an unfair advantage in cloud gaming yet they run all their cloud workloads on Azure, then you have the UK that agrees with Sony yet we all know they're just afraid that all the Activision players would leave their platform. And now people are acting like MS is the bad guy because what? they have money?
- manuelabeledo 3y ago
  They both have money. Using what one could only qualify as an utility from a competitor, does not make Sony any less right. Apple uses Google Cloud, Netflix runs on AWS. > ... the UK that agrees with Sony yet we all know they're just afraid that all the Activision players would leave their platform Yes, because the platform is not Azure, is Windows and by extension, Xbox.
  - gdsdfe 3y ago
    you really don't think a multi million dollar bill annually doesn't benefit MS ?! funny enough xbox runs a windows kernel
manuelabeledo 3y ago
This is what it says in the report about cloud gaming: > In relation to cloud gaming services, Microsoft has a combination of assets that we consider is difficult for other cloud gaming service providers to match. By owning Windows, the OS for which the vast majority of PC games are designed, Microsoft could stream games from Windows servers without having to pay a Windows licensing fee or adapt games designed for Windows to an alternative OS. By having Xbox Cloud Gaming and Azure, Microsoft has both a short-term and a longer-term solution to host cloud gaming, leveraging its large and well distributed global cloud infrastructure to stream its games without having to pay a fee to third-party cloud platforms. And by having an existing console ecosystem, Microsoft has a range of popular games that it can offer. As such, we consider that Microsoft has a strong position in cloud gaming services and will remain an important competitor as the market expands and evolves. Essentially, they have a larger foothold in cloud gaming than any other competitor, and by controlling the software and some of the most popular platforms for gaming, they have a vast advantage over other opponents to the merger, e.g. Sony. Which makes sense. While I don't expect cloud gaming to overtake traditional local gaming in the short term, allowing Microsoft to buy some of the most popular franchises out there and the largest US publisher, may create an artificial behemoth in the field, impossible to overcome.
- scarface74 3y ago
  I hate to admit it. But that was a decently argued point that CMA made. I was thinking about how silly it was that they were worried about a “monopoly” on a market that doesn’t even really exist and most of my opinion was formed by both my usual prejudice about ignorant government officials and listening to Ben Thompson’s take (Stratechery). I didn’t even think about the Windows or Azure angle since I don’t use either.
- pid-1 3y ago
  Since this whole argument is untestable wild guessing: maybe there was a future in which Microsoft buying Activision pushed more companies to hedge against a possible MS monopoly by properly supporting Linux, like Valve has been doing for the past years.
  - 3y ago
screye 3y ago
Using cloud gaming as an argument to block this merger, sets a dangerous precedent. Effectively, CMA is dreaming a future where cloud gaming has taken over. It is passing a judgement based on where the industry could go, rather than where it is now. This allows a bureaucratic organizations to impede companies based on arbitrary & unsubstantiated fears.
- pwthornton 3y ago
  The future is unknowable and unpredictable. The last console generation really dragged on because there was concern that consoles were dying. Well, this generation is selling better than ever. PC gaming is exploding in popularity too. The Switch is a sensation. All the cloud gaming predictions haven't happened. Mobile gaming hasn't killed traditional gaming either. In fact, it turns out that all those precautions were largely wrong. There is a huge market for high-quality games you play on local hardware for maximum visual and input fidelity. I too find it very dangerous for government regulators to be predicting a future that industry can't themselves predict. They are not experts on this industry and don't conduct user and market research. They are literally just guessing. It is equally likely that cloud gaming never becomes a thing because phones keep getting more powerful and eventually they take the place of the future that cloud gaming was supposed to represent. Apple could eventually allow you to hook/locally stream an iPhone to a TV to use it as a console. There will always be a market for hardcore hardware like consoles and PCs, but who is to say that the more casual option will be cloud gaming and not some world in which mobile devices can be used as less-powerful home gaming machines?
- meroes 3y ago
  > It is passing a judgement based on where the industry could go, rather than where it is now. This allows a bureaucratic organizations to impede companies based on arbitrary & unsubstantiated fears Seems disingenuous that MS wouldn’t leverage their monopoly on client/game OS into the cloud as well. It at least doesn’t seem arbitrary and unsubstantiated. And prevention is better than reaction in many cases.
VBprogrammer 3y ago
I don't have any skin in this game having not really played a games console for 6-7 years but when Microsoft started throwing their toys out of their pram and invoking Brexit I was pretty sure the CMA were probably right, if for the wrong reasons. Don't get me wrong, I think Brexit was a monumentally stupid thing to do but it's was so far from relevant here that anyone invoking it was clutching.
shanoaice 3y ago
It seems like that nobody cares about anything of the players of Activision games. A lot people supports this takeover simply becase they hope Microsoft could be a better manager at making decisions about how the games are made and how the service operates. We simply want Bobby Kotick out, and Microsoft's acquire is our best chance.
- manuelabeledo 3y ago
  > We simply want Bobby Kotick out, and Microsoft's acquire is our best chance. You mean like what they did with Halo? That worked out alright.
bgorman 3y ago
I think this will ultimately result in more and more companies bypassing the UK. The CMA has proven to make arbitrary decisions unrelated to real competition concerns. While the EU is a large enough market for now, the UK could potentially just be skipped. All European markets are fading into irrelevancy, if the UK decided to be extra difficult to operate in, it will just accelerate its decline.
trynumber9 3y ago
It is a tough one. Microsoft is already huge and has some unclear intentions. They say they want some killer apps to serve as flagship games. But Sony is concerned they'll stop releasing games for Playstation. However the Xbox division is so far behind Sony it doesn't seem particularly worrying to me. Microsoft looks like a giant in gaming when including PC gaming but there Valve takes most the distribution money.
- acomjean 3y ago
  Its not like MS haven't done the "buy company, make new stuff exclusive" stuff before (recently bethesda). Hardware companies buy software and making it platform exclusvie (Apple, Microsoft, Sony..). Its generally just bad for us consumers. [1]https://www.theverge.com/2022/12/22/23523576/microsoft-three-future-bethesda-games-xbox-exclusive-ftc https://www.theverge.com/2022/12/22/23523576/microsoft-three...
WeylandYutani 3y ago
That's why they're whining.
gigatexal 3y ago
Nope. Ben Thompson's take here is actually more compelling. The CMA is hoping to help the nascent cloud gaming market when many a company has tried and failed and is -- I think -- needlessly punishing Microsoft in order to help the cloud gaming initiative that hasn't even proven is a viable business model.
flumpcakes 3y ago
I think it is clearly a government's job to ensure the health, safety, and prosperity of a country and its citizens. Not allowing two big companies (is this the biggest merger ever?) join together for any reason that is in any way detrimental to the populace is clearly a good thing and within a government's remit. I'm not sure why people are piling on so much scorn and derision against CMA.
elefanten 3y ago
For a living, I influence high level corporate strategy in the games industry. I’ve consulted for all the biggest companies in the space, including all the tech giants’ various gaming-related groups. Let me be abundantly clear: the decision is utter nonsense. I’m not going into the details here, but the decision is an abysmal abomination and should be very concerning to all technology businesses, both because it signals that a relevant regulatory body is willing to make arbitrary and horribly-justified decisions with major material impacts, and because a story is emerging about the international regulatory collusion that drove this. It ABSOLUTELY IS an undemocratic power grab from politically-driven regulators that abrogates their core duties in favor of empowering themselves and their own political factions. Additionally, it’s extra embarrassing for the UK because it signals an overly cozy relationship with Sony (which has more operations / employees in country) that reeks of regulatory capture by a local lobby. That and a willingness to jump through hoops for an ambitiously activist US FTC. Unfortunately, the net result is the UK coming off as a complete joke. I’m strongly advising clients to avoid expanding operations in the country and to genuinely consider abandoning the market. Take it or leave it, but I write this all as someone who had otherwise been strongly arguing AGAINST the deal, because I think it’s bad for the games industry. But this kind of sloppy and arbitrary behavior from regulators is even worse, for all gaming and tech businesses… and, to some degree, for all business in general. Edit- I can’t elaborate on my reasoning here, but the full picture is out there for anyone interested in looking into it. This is a long and thorough rundown of the situation that serves as a good starting point: https://naavik.co/digest/microsoft-activision-blizzard-timeline https://naavik.co/digest/microsoft-activision-blizzard-timel...

216 points by mrkramer 3y ago

Aside from the other arguments in the article: "The chair of the CMA, its chief executive and the rest of the board are appointed by the business secretary of the elected government" if I'm reading this correctly, UK citizens elect a government, the government appoints a business secretary, and then the business secretary appoints the entire CMA? So that would be two layers of disconnect from the voter. AFAIK most US agencies are similarly disconnected or worse. Whether "unelected" is a meaningful criticism to level at government systems is a separate question though. I feel like most roles are not ones where the voter could realistically have enough knowledge or education to actually make good decisions about who to appoint to roles with obscure or complex mandates. We seem to take democracy as an absolute good in all cases sometimes even though uninformed decisions can have catastrophic effects. EDIT: I really shouldn't have to clarify this but apparently we're at the point where "this article poorly argues its thesis" is interpreted by some readers as "I love monopolies and/or activision"? So to be explicit: I think we need more antitrust enforcement, not less, but the article seems to make this case in a clumsy if not deceptive way

permo-w 3y ago
what would you propose as an alternative?
- kevingadd 3y ago
  I'm not convinced we need an alternative in this case. The article proposes that Smith's complaint is uninformed, but it seems more likely that his alternative might just not be any better.
- 7952 3y ago
  Not the parent. But maybe the courts are an alternative model for making these kind of decisions. Let the different parties make a case and then have an independent judge decide it as a question of law.
kranke155 3y ago
This was the right decision
- kevingadd 3y ago
  My comment does not express even light disagreement with the decision.
fafqg 3y ago
>"The chair of the CMA, its chief executive and the rest of the board are appointed by the business secretary of the elected government" if I'm reading this correctly, UK citizens elect a government, the government appoints a business secretary, and then the business secretary appoints the entire CMA? So that would be two layers of disconnect from the voter. You should see the European Commission.
- kevingadd 3y ago
  In what sense? I'm not complaining about it, just observing that the article appears to defend it as elected when it is unelected. Smith's complaint potentially being factually true doesn't make it a valid criticism.
dingledork69 3y ago
Direct democracy is not a good idea, unfortunately.
- kevingadd 3y ago
  Yeah, implicit in his complaint is that it is the ideal and would somehow "fix" this ruling. I wish the article confronted that assumption directly instead of attempting to discredit his complaint.
- Red_Leaves_Flyy 3y ago
  Citation?
  - dingledork69 3y ago
    - dingledork, 2023-05-01
  - sofixa 3y ago
    Take a look at Switzerland. Universal suffrage only became universally applied when courts forced the last holdout cantons, in the 1990s. They also recently refused decarbonision efforts because those would result in higher taxes. Masses of common people are fundamentally unprepared for voting and compromising on important and complex legislation. That's why (supposedly expert) agencies and lawmakers exist, to handle that with some higher level goals and objectives and strategic thinking.
    - Zpalmtree 3y ago
      Switzerland seems to be doing pretty well? Why do you think they have to vote for the policies you want for it to be a good idea?
      - kevingadd 3y ago
        Are you unironically arguing against universal suffrage as a policy?
eynsham 3y ago
> not only unelected but unaccountable Well direct democracy for everything is a consistent position but I doubt that Microsoft unironically thinks that all appointed government posts are unaccountable.
scatters 3y ago
The UK elects a parliament, and parliament appoints a government. So there's an extra layer.
anonymous_sorry 3y ago
> If I'm reading this correctly, UK citizens elect a government, the government appoints a business secretary, and then the business secretary appoints the entire CMA? So that would be two layers of disconnect from the voter. The business secretary would typically be an elected as a member of parliament (MP, equivalent to a congress person). The leader of the majority party in parliament will form a government, mostly appointing elected MPs to government roles. So the business secretary has been elected, but not as business secretary. This is ignoring the absurdly anachronistic House of Lords, the upper chamber of parliament, who are mostly life appointments by various governments over the years (but also includes some hereditary peers, and an assortment of senior Church of England bishops). Lords can also be appointed to ministerial positions, although typically not the biggest jobs.

endisneigh 3y ago

What would happen if Activision is acquired anyway by Microsoft? Could they simply exist as two separate entities in the UK, and a unified entity elsewhere? With all of the repercussions that entails for the users? Or simply they exit the market in the UK?

actionfromafar 3y ago
I don't think Microsoft wants to find out.
etempleton 3y ago
I think they could possibly say that they will move forward with the merger, but cease to publish or sell games in the UK, but I very much doubt they would. The UK is still too big / profitable of a market. As an aside, it is interesting to see how this merger is received in the tech space vs gaming space. Most folks in gaming seem to welcome the merger because Activision has long been anti-consumer / bad stewards of game franchises, and many people feel positive about the direction of the Xbox division as of late. I also think the CMAs rationale for their decision is bizarre and shows a lack of understanding of the space. I can’t help but feel much of European tech regulation is about feeling out of the loop on tech and a certain fear of falling even further behind the United States and Asia.
- Hamuko 3y ago
  >cease to publish or sell games in the UK Wouldn't they need to cease all Microsoft activities in the UK? It's not some Microsoft Gaming Corporation that wants to buy Activision-Blizzard, it's Microsoft Corporation.
  - etempleton 3y ago
    It is possible they would have to pull out entirely, that is what Microsoft’s lawyers are threatening could happen, but it won’t. It is too costly for both sides. It is a challenge for Microsoft, but honestly I don’t know how much sway the CMA has here. They don’t have a ton of leverage to block the deal if every other country is onboard. My guess is they will ask for some specific concessions.

hourago 3y ago

Microsoft basically said that the UK is a bad place to do businesses because they didn't got what they wanted. An extremely entitled and childish comment coming from someone that should know better. Microsoft is showing its most unprofessional and belligerent face going back to the worst times of the company. Remember the FUDs about Linux, the lies about DR-DOS, ... Microsoft is back and needs to be corrected.

nbevans 3y ago
Brad Smith is definitely part of the old guard. Joined in 1993. His remarks the other day are going to age terribly. He's basically everything Ballmer was but as a lawyer. But, we should expect more of this if mega corporations are allowed to continue growing their market caps beyond the GDP of G7 nation states.
- gruez 3y ago
  >if mega corporations are allowed to continue growing their market caps beyond the GDP of G7 nation states. ...which is a pointless comparison because the two things being compared are different units entirely. The former is basically the lifetime value with discounting applied, whereas the latter is income from a single year.
capableweb 3y ago
I don't know how anyone fell (or continues to fall) from companies acting like the good guys when things are hard for them, because as soon as they can, they'll abuse their position. And this is not specific to Microsoft, it's every public company driven by shareholders. Why would anyone expect anything differently here?
- Red_Leaves_Flyy 3y ago
  If this trend is that predictable someone should get their phd studying it, write a book, and get hired by banking lobbyists to stfu.
ff2400t 3y ago

vxNsr 3y ago

What I find interesting is MS has until July to close this deal but the FTC case only starts in august. Also the FTC is also suing to prevent this case from closing… if two of your biggest markets are trying to stop you from closing your deal, maybe just stop.

daniel-s 3y ago

I don't mind the complaint about CMA being undemocratic because it's a council of unelected bureaucrats, it's just trash-talk from someone that didn't get what they wanted; to be expected. IMO the reason why this decision is really dumb is because the reason given was cloud gaming. I think that people are missing this. This isn't a market. Almost nobody plays on cloud gaming platforms, like Stadia which recently closed down, or similar. The idea of blocking a deal because maybe this technology will become much more popular one day and maybe Microsoft will be the success is IMO dumb. It's just a dumb argument. Concerns about CoD and PlayStation at least make sense, but not given here.

nbevans 3y ago
Does "cloud gaming" encompass things like Xbox Game Pass though? Subscription model with downloadable access to all games definitely feels cloudy to me.
- haunter 3y ago
  No >The cloud allows UK gamers to avoid buying expensive gaming consoles and PCs and gives them much more flexibility and choice as to how they play. 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... YET they next sentence >Allowing Microsoft to take such a strong position in the cloud gaming market just as it begins to grow rapidly would risk undermining the innovation that is crucial to the development of these opportunities. Which is really funny considering the closure of Google Stadia, so maybe it was a 4D chess move by Google after all
  - mattferderer 3y ago
    I haven't read anything that makes the CMA look good yet & I'm trying to be impartial. If this is there definition of cloud gaming, how do phones come into play? They seem like a far bigger market that doesn't require additional hardware purchases specifically for gaming. You can hook them up to popular video game controllers & your TV. No latency issues, which Microsoft won't be fixing in cloud streaming type games without insane investments near users. The article in the headline doesn't actually give any good reasons & I can't find any solid reasons by any of the people cheering on any Microsoft hate. If you want to call Microsoft a monopoly & hate on them, there are tons of great & current examples but this just doesn't seem to be one. It's equivalent to blowing the whistle & calling a penalty on some random person for no reason because five plays earlier someone else on that team got away with one.

rvz 3y ago

The CMA has indeed done its job. Microsoft is just throwing a tantrum over the CMA in the UK having a backbone to see for what Microsoft really is doing and this horizontal integration of existing multi-billion dollar franchises is bad for gamers. Even the UK Government isn't buying into Microsoft's bullshit of bringing title like Call of Duty to Nintendo Switch just to close the deal. [0] Microsoft hasn't changed their anti-competitive behaviour. The methods are different but the strategy is the same, which they have gotten very clever over the decades. [0] https://arstechnica.com/gaming/2023/04/uk-government-says-the-nintendo-switch-cant-handle-call-of-duty/ https://arstechnica.com/gaming/2023/04/uk-government-says-th...

AshamedCaptain 3y ago
> Microsoft hasn't changed their anti-competitive behaviour. And the biggest evidence of that is that MS still uses their monopoly to step over Linux and other OSes at every chance: > We found that the Microsoft Cloud Remedy had several shortcomings: [..] Microsoft would not have to supply Activision’s full range of games to providers that may decide to operate using a non-Windows PC operating system (eg Linux) They literally would only allow competitors to gain access to Activision's catalogue if they promised to use it with Windows and only Windows. I'm sure Be and others are having flashbacks. I am, at least. And the worst part is that the EC would have very likely bent over and accepted this. Now I will never know, since the UK rejecting it makes it toxic.

drumhead 3y ago

I think a lot of people are ignoring MS. It does seem more like an I'll judged emotional outburst than a reasoned reaction. The competition authority in the UK is well respected so their conclusion is going to be given great weight by the EU and the US. Given the EUs track record, they're likely to be stricter than the UK, so the CMA adjudication is a good forward indicator that the deal is basically dead.

Silhouette 3y ago
The cheap shot from MS about the EU was particularly juvenile. They can't seriously expect a more generous hearing from the bloc that has repeatedly hit big US tech firms with regulations and disguised taxation over the past few years than from the relatively business-friendly UK. They're just hoping to put some kind of pressure on the government in the UK because Brexit makes comparisons between the business environments in the UK and EU a touchy subject right now. Given that it wasn't even the UK government who made the call here that probably won't achieve much. Would the UK government really change the fundamental rules of the game to override the CMA just because the regulator did its job? Doesn't seem likely. Literally all of the commentary I've seen about this from any source not connected to Microsoft or Activision is taking the view that it was the right call by the regulator.
dogma1138 3y ago
The CMA tends to be the strictest of the bunch (the same pretty much goes for all UK regulators e.g. compare the FCA to the likes of BaFin) their policy focuses on prevention not management and they tend to forecast further into the future than their European or American counterparts and most importantly they aren’t looking only at issues that can emerge within their respective market but any market that could have impact on the UK down the line.

andrewstuart 3y ago

I think people expect the big money always wins.

criley2 3y ago

I think it's fair that Microsoft is upset that they cannot do what their competitors have already completed. If the UK proceeds with a mandatory breakup of Sony's holdings, I would then approve of how they're regulating the market. If they, however, allow one titan to build an unstoppable first-party monopoly but bar only some of the competition from catching up, then I have serious concerns and misgivings with the misguided protection of the existing #1 business.

manuelabeledo 3y ago
> I think it's fair that Microsoft is upset that they cannot do what their competitors have already completed. Microsoft buying Activision-Blizzard would create the second largest gaming company in the world by revenue. In comparison, Sony's largest acquisition was Bungie, which was 30x smaller than Activision-Blizzard. Also, the ruling specifically addresses cloud gaming, not consoles.
- aardvarkr 3y ago
  I think they’d be the third largest behind tencent and Sony

snowski3 3y ago

If you read the report then the CMA comes across terribly. They don't understand basic technical facts. Apparently a competitor to Microsoft told the CMA that they solved latency issues with cloud gaming by increasing GPU power. Someone should alert the nobel prize committee about conquering the speed of light. They make other bizarre claims like apparently everyone that subscribes to xbox game pass does so for cloud gaming. Cloud gaming isn't even offered in most markets. There is no way people are subscribing to game pass for cloud gaming, its not even good. Its obvious to anyone with a brain that peer-to-peer is the way forward with game streaming because it solves the latency problems.

COGlory 3y ago
>If you read the report then the CMA comes across terribly. They don't understand basic technical facts. Apparently a competitor to Microsoft told the CMA that they solved latency issues with cloud gaming by increasing GPU power. Someone should alert the nobel prize committee about conquering the speed of light. This is because input latency goes down if you run at a higher framerate. Nvidia worked on this and published some data on it. It's real. >They make other bizarre claims like apparently everyone that subscribes to xbox game pass does so for cloud gaming. Gamepass includes Xcloud. Not sure what your point is. CMA made a true statement.
- snowski3 3y ago
  Total input latency, not network latency. Referring to the issues with cloud gaming by discussing input latency is pretty spurious. I'm sorry but no, this not correct. XCloud is not available in most markets that Gamepass is present.
  - COGlory 3y ago
    It is in the UK though, which is where the CMA operates
    - snowski3 3y ago

gdsdfe 3y ago

this is honestly the most bizzare story in gaming ... first you have Sony that claims this acquisition will give MS an unfair advantage in cloud gaming yet they run all their cloud workloads on Azure, then you have the UK that agrees with Sony yet we all know they're just afraid that all the Activision players would leave their platform. And now people are acting like MS is the bad guy because what? they have money?

manuelabeledo 3y ago
They both have money. Using what one could only qualify as an utility from a competitor, does not make Sony any less right. Apple uses Google Cloud, Netflix runs on AWS. > ... the UK that agrees with Sony yet we all know they're just afraid that all the Activision players would leave their platform Yes, because the platform is not Azure, is Windows and by extension, Xbox.
- gdsdfe 3y ago
  you really don't think a multi million dollar bill annually doesn't benefit MS ?! funny enough xbox runs a windows kernel

manuelabeledo 3y ago

This is what it says in the report about cloud gaming: > In relation to cloud gaming services, Microsoft has a combination of assets that we consider is difficult for other cloud gaming service providers to match. By owning Windows, the OS for which the vast majority of PC games are designed, Microsoft could stream games from Windows servers without having to pay a Windows licensing fee or adapt games designed for Windows to an alternative OS. By having Xbox Cloud Gaming and Azure, Microsoft has both a short-term and a longer-term solution to host cloud gaming, leveraging its large and well distributed global cloud infrastructure to stream its games without having to pay a fee to third-party cloud platforms. And by having an existing console ecosystem, Microsoft has a range of popular games that it can offer. As such, we consider that Microsoft has a strong position in cloud gaming services and will remain an important competitor as the market expands and evolves. Essentially, they have a larger foothold in cloud gaming than any other competitor, and by controlling the software and some of the most popular platforms for gaming, they have a vast advantage over other opponents to the merger, e.g. Sony. Which makes sense. While I don't expect cloud gaming to overtake traditional local gaming in the short term, allowing Microsoft to buy some of the most popular franchises out there and the largest US publisher, may create an artificial behemoth in the field, impossible to overcome.

scarface74 3y ago
I hate to admit it. But that was a decently argued point that CMA made. I was thinking about how silly it was that they were worried about a “monopoly” on a market that doesn’t even really exist and most of my opinion was formed by both my usual prejudice about ignorant government officials and listening to Ben Thompson’s take (Stratechery). I didn’t even think about the Windows or Azure angle since I don’t use either.
pid-1 3y ago
Since this whole argument is untestable wild guessing: maybe there was a future in which Microsoft buying Activision pushed more companies to hedge against a possible MS monopoly by properly supporting Linux, like Valve has been doing for the past years.
- 3y ago

screye 3y ago

Using cloud gaming as an argument to block this merger, sets a dangerous precedent. Effectively, CMA is dreaming a future where cloud gaming has taken over. It is passing a judgement based on where the industry could go, rather than where it is now. This allows a bureaucratic organizations to impede companies based on arbitrary & unsubstantiated fears.

pwthornton 3y ago
The future is unknowable and unpredictable. The last console generation really dragged on because there was concern that consoles were dying. Well, this generation is selling better than ever. PC gaming is exploding in popularity too. The Switch is a sensation. All the cloud gaming predictions haven't happened. Mobile gaming hasn't killed traditional gaming either. In fact, it turns out that all those precautions were largely wrong. There is a huge market for high-quality games you play on local hardware for maximum visual and input fidelity. I too find it very dangerous for government regulators to be predicting a future that industry can't themselves predict. They are not experts on this industry and don't conduct user and market research. They are literally just guessing. It is equally likely that cloud gaming never becomes a thing because phones keep getting more powerful and eventually they take the place of the future that cloud gaming was supposed to represent. Apple could eventually allow you to hook/locally stream an iPhone to a TV to use it as a console. There will always be a market for hardcore hardware like consoles and PCs, but who is to say that the more casual option will be cloud gaming and not some world in which mobile devices can be used as less-powerful home gaming machines?
meroes 3y ago
> It is passing a judgement based on where the industry could go, rather than where it is now. This allows a bureaucratic organizations to impede companies based on arbitrary & unsubstantiated fears Seems disingenuous that MS wouldn’t leverage their monopoly on client/game OS into the cloud as well. It at least doesn’t seem arbitrary and unsubstantiated. And prevention is better than reaction in many cases.

VBprogrammer 3y ago

I don't have any skin in this game having not really played a games console for 6-7 years but when Microsoft started throwing their toys out of their pram and invoking Brexit I was pretty sure the CMA were probably right, if for the wrong reasons. Don't get me wrong, I think Brexit was a monumentally stupid thing to do but it's was so far from relevant here that anyone invoking it was clutching.

shanoaice 3y ago

It seems like that nobody cares about anything of the players of Activision games. A lot people supports this takeover simply becase they hope Microsoft could be a better manager at making decisions about how the games are made and how the service operates. We simply want Bobby Kotick out, and Microsoft's acquire is our best chance.

manuelabeledo 3y ago
> We simply want Bobby Kotick out, and Microsoft's acquire is our best chance. You mean like what they did with Halo? That worked out alright.

bgorman 3y ago

I think this will ultimately result in more and more companies bypassing the UK. The CMA has proven to make arbitrary decisions unrelated to real competition concerns. While the EU is a large enough market for now, the UK could potentially just be skipped. All European markets are fading into irrelevancy, if the UK decided to be extra difficult to operate in, it will just accelerate its decline.

trynumber9 3y ago

It is a tough one. Microsoft is already huge and has some unclear intentions. They say they want some killer apps to serve as flagship games. But Sony is concerned they'll stop releasing games for Playstation. However the Xbox division is so far behind Sony it doesn't seem particularly worrying to me. Microsoft looks like a giant in gaming when including PC gaming but there Valve takes most the distribution money.

acomjean 3y ago
Its not like MS haven't done the "buy company, make new stuff exclusive" stuff before (recently bethesda). Hardware companies buy software and making it platform exclusvie (Apple, Microsoft, Sony..). Its generally just bad for us consumers. [1]https://www.theverge.com/2022/12/22/23523576/microsoft-three-future-bethesda-games-xbox-exclusive-ftc https://www.theverge.com/2022/12/22/23523576/microsoft-three...

WeylandYutani 3y ago

That's why they're whining.

gigatexal 3y ago

Nope. Ben Thompson's take here is actually more compelling. The CMA is hoping to help the nascent cloud gaming market when many a company has tried and failed and is -- I think -- needlessly punishing Microsoft in order to help the cloud gaming initiative that hasn't even proven is a viable business model.

flumpcakes 3y ago

I think it is clearly a government's job to ensure the health, safety, and prosperity of a country and its citizens. Not allowing two big companies (is this the biggest merger ever?) join together for any reason that is in any way detrimental to the populace is clearly a good thing and within a government's remit. I'm not sure why people are piling on so much scorn and derision against CMA.

elefanten 3y ago

For a living, I influence high level corporate strategy in the games industry. I’ve consulted for all the biggest companies in the space, including all the tech giants’ various gaming-related groups. Let me be abundantly clear: the decision is utter nonsense. I’m not going into the details here, but the decision is an abysmal abomination and should be very concerning to all technology businesses, both because it signals that a relevant regulatory body is willing to make arbitrary and horribly-justified decisions with major material impacts, and because a story is emerging about the international regulatory collusion that drove this. It ABSOLUTELY IS an undemocratic power grab from politically-driven regulators that abrogates their core duties in favor of empowering themselves and their own political factions. Additionally, it’s extra embarrassing for the UK because it signals an overly cozy relationship with Sony (which has more operations / employees in country) that reeks of regulatory capture by a local lobby. That and a willingness to jump through hoops for an ambitiously activist US FTC. Unfortunately, the net result is the UK coming off as a complete joke. I’m strongly advising clients to avoid expanding operations in the country and to genuinely consider abandoning the market. Take it or leave it, but I write this all as someone who had otherwise been strongly arguing AGAINST the deal, because I think it’s bad for the games industry. But this kind of sloppy and arbitrary behavior from regulators is even worse, for all gaming and tech businesses… and, to some degree, for all business in general. Edit- I can’t elaborate on my reasoning here, but the full picture is out there for anyone interested in looking into it. This is a long and thorough rundown of the situation that serves as a good starting point: https://naavik.co/digest/microsoft-activision-blizzard-timeline https://naavik.co/digest/microsoft-activision-blizzard-timel...