3 ms·

Approval isn't based on whether or not they can afford to compete without the acquisition, it's based on whether or not the acquisition will meaningfully reduce

Approval isn't based on whether or not they can afford to compete without the acquisition, it's based on whether or not the acquisition will meaningfully reduce competition.

sofixa 3y ago
Each competition authority has their own criteria. But in this case, it will meaningfully reduce competition. For some reason UK's CMA only considered cloud gaming, which is a weird fixation. Maybe because it's an emerging market? If all Activison Blizzard games become Xbox exclusive will reduce competition and screw consumers, yet that was dropped as a concern for who knows what reason.
- rsynnott 3y ago
  Likely because they thought it was the one they were most likely to be able to win; these are usually pretty narrowly focused.
- Sakos 3y ago
  I just don't see how it meaningfully reduces competition. This barely moves the needle. If I look at the top sellers on Steam, the vast majority are not Activision Blizzard.
  - k12sosse 3y ago
    You mean the games that are sold on battle.net aren't being tracked by steam?
    - Sakos 3y ago
      So you'd rather just miss the point, ok. It doesn't matter how much revenue Battle.net makes for them. The multitude of developers and publishers that are successful on Steam show that AB is irrelevant to the market. If AB owned a significant number of the top 50, it'd be a different story, but they don't.
- r00fus 3y ago
  Never ignore corruption as a possible reason. Microsoft and the UK government are very chummy.
thfuran 3y ago
How could the acquisition of one solvent company by another in the same field not reduce competition? The UK seems to have gotten some token divestiture out of this in the name of not reducing competition too much in a particular area, but merging of competitors by its very nature reduces competition.
- nine_k 3y ago
  If there are 100 roughly comparable companies, a merger happens, and 99 remain, the competition decreased, but the landscape is still competitive. If there are 3 roughly comparable companies that control 90% of the market, the competition is already low; if two of them merged, very little competition would remain. A duopoly is not as bad as a monopoly, but is still pretty far from an "efficient market".
  - thfuran 3y ago
    >If there are 100 roughly comparable companies, a merger happens, and 99 remain, the competition decreased, but the landscape is still competitive. But still less competitive than it was. So why allow a company like Microsoft to make the field less competitive when it could afford to compete instead of buying its competitors? I think a company even half as large or profitable as Microsoft should have to present a pretty damn compelling case before being allowed to make any acquisition at all let alone that of one of their competitors.
    - AlchemistCamp 3y ago
      You should “allow” MS to make acquisitions because it’s their money and they should be able to spent it however they choose, within the constraints of the law. Your desire to block acquisitions in general is a dangerous one. Doing so, basically kills venture capital markets, and then we get far fewer startups, less innovative disruption and more entrenched market leaders.
    - nine_k 3y ago
      What if a company goes out of business, and fewer remain? Should it be even allowed to close? :) Mergers are different because they create fewer giants in the place where more smaller companies used to be. In extreme cases, it may have seriously bad consequences for broader public, and this is a reason to prevent a merger, or even split a monopoly. But this should be a rather extraordinary event.

Approval isn't based on whether or not they can afford to compete without the acquisition, it's based on whether or not the acquisition will meaningfully reduce competition.

sofixa 3y ago

Each competition authority has their own criteria. But in this case, it will meaningfully reduce competition. For some reason UK's CMA only considered cloud gaming, which is a weird fixation. Maybe because it's an emerging market? If all Activison Blizzard games become Xbox exclusive will reduce competition and screw consumers, yet that was dropped as a concern for who knows what reason.

rsynnott 3y ago
Likely because they thought it was the one they were most likely to be able to win; these are usually pretty narrowly focused.
Sakos 3y ago
I just don't see how it meaningfully reduces competition. This barely moves the needle. If I look at the top sellers on Steam, the vast majority are not Activision Blizzard.
- k12sosse 3y ago
  You mean the games that are sold on battle.net aren't being tracked by steam?
  - Sakos 3y ago
    So you'd rather just miss the point, ok. It doesn't matter how much revenue Battle.net makes for them. The multitude of developers and publishers that are successful on Steam show that AB is irrelevant to the market. If AB owned a significant number of the top 50, it'd be a different story, but they don't.
r00fus 3y ago
Never ignore corruption as a possible reason. Microsoft and the UK government are very chummy.

thfuran 3y ago

How could the acquisition of one solvent company by another in the same field not reduce competition? The UK seems to have gotten some token divestiture out of this in the name of not reducing competition too much in a particular area, but merging of competitors by its very nature reduces competition.

nine_k 3y ago
If there are 100 roughly comparable companies, a merger happens, and 99 remain, the competition decreased, but the landscape is still competitive. If there are 3 roughly comparable companies that control 90% of the market, the competition is already low; if two of them merged, very little competition would remain. A duopoly is not as bad as a monopoly, but is still pretty far from an "efficient market".
- thfuran 3y ago
  >If there are 100 roughly comparable companies, a merger happens, and 99 remain, the competition decreased, but the landscape is still competitive. But still less competitive than it was. So why allow a company like Microsoft to make the field less competitive when it could afford to compete instead of buying its competitors? I think a company even half as large or profitable as Microsoft should have to present a pretty damn compelling case before being allowed to make any acquisition at all let alone that of one of their competitors.
  - AlchemistCamp 3y ago
    You should “allow” MS to make acquisitions because it’s their money and they should be able to spent it however they choose, within the constraints of the law. Your desire to block acquisitions in general is a dangerous one. Doing so, basically kills venture capital markets, and then we get far fewer startups, less innovative disruption and more entrenched market leaders.
  - nine_k 3y ago
    What if a company goes out of business, and fewer remain? Should it be even allowed to close? :) Mergers are different because they create fewer giants in the place where more smaller companies used to be. In extreme cases, it may have seriously bad consequences for broader public, and this is a reason to prevent a merger, or even split a monopoly. But this should be a rather extraordinary event.