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Phil Spencer will be fine even if this deal ultimately fails.
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News The UK regulator CMA has blocked Microsoft’s proposed acquisition of Activision Blizzard to protect innovation and choice in cloud gaming
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Hailinel
Musou Mania!
Yeah, I'm not exactly worried for him and don't expect him to be ejected from Microsoft. But I do think there will be at least some conversations between him and Nadella about the Xbox Division bungling a merger of this scale.
Erimgard
Chozo
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Wouldn't this loss be more on Microsoft's legal team than Phil? I highly doubt he's staying up late nights cramming on international merger laws
Hailinel
Musou Mania!
Yes and no? At a certain level, Phil was almost certainly involved in requesting/convincing Nadella to approve the merger budget. It's also not entirely on the lawyers arguing with the regulators, either, given public statements from executives can be held against them in regulatory disputes.
I just don't see the most likely scenario being, in the event the merger fails, Phil waking up on Monday and deciding to go on a developer buying spree.
All of the M&A cheerleading and speculation these past few years has been nothing but brain poison gearing people up to cheer for Microsoft gobbling up companies the size of ABK.
If the one thing Microsoft and Sony can agree on is that they're not in competition with Nintendo, who's the CMA to disagree?
Tentacle-tropes
Kremling
Because frankly that doesn’t really matter to this acquisition. The CMA’s criteria in the last report boiled down to how many emails mentioned Nintendo vs Sony. If the CMA is arguing CoD is essential for competition/innovation then it would behoove them to look at the industry as a whole instead making arbitrary distinctions to get the result they want. Otherwise within two reports they have done an exceedingly poor job at making that case.
Hailinel
Musou Mania!
You are so fixated on CoD in this that I feel like you're falling for the bait Microsoft was hoping people would focus on.
Of course not. Phil is the one deciding the plays, so he's the one that takes the heat. Also so far MS lawyers have done a solid job. The holes in their arguments come from sources they can't really do anything about, such as past PR statements.
The CMA doesn't have to abide by the definition put forth by MS and Sony. In fact, other regulatory bodies such as CADE and FTC had concluded that the so-called "high-end console market" does not exist.
Tentacle-tropes
Kremling
That bait would be what? Because this is what regulators & Sony are arguing for this entire time, this document included. If they cared about anything else then perhaps they should have done a better job on presenting their case.
It doesn’t exist but the term has stuck and is being used by regulatory bodies in their language within the case & probably going forward for other rulings.
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Hailinel
Musou Mania!
The CMA literally talked about the merger's effect on the cloud gaming market and what that means for cloud technology. This is not about Sony's piss-fit over console exclusivity.
We have yet to see if that will be the case. Future rulings can reevaluate the term.
And their primary basis for saying the merger would harm the cloud gaming market is:
Both MS' position as a cloud provider and ABK IPs are relevant to the conversation.
Tentacle-tropes
Kremling
In which the same document states that CoD is essential to the cloud gaming market following their 255pg report on the effects on the “high-end market” based around CoD as an essential input which they had to drop.
This time they decided to add another IP other then CoD & are trying to link the Pc & cloud markets together so it doesn’t sound as ridiculous. It very much has to do with Sony’s hissy-fit considering they are rolling with that notion they suggested in the first place. Regulatory bodies hamstrung themselves when they decided that CoD was the only real relevant thing they wanna talk about.
TSR3
Pilotwings
I think it will be Brad Smith's head first on the chopping block, with Clare Barclay (M$ UK CEO) swinging the axe
They don't have to, but if it suits their purpose, why shouldn't they?
They're regulators. The definition put forth by the parties being regulated strengthens their concerns, works with their argument and helps them be safe rather than sorry.
Hailinel
Musou Mania!
1. Call of Duty is a factor, but not the factor. There's a lot going on here. Their current position in the cloud market and the broader tech industry, Microsoft's own words regarding their current position in the game industry/their own discounting of Nintendo as a competitor and market leader, Microsoft's rather extensive regulatory history, the sheer size and scope of ABK and their portfolio, and so on.
2. Both of you are seemingly so convinced that the CMA's argument is a pin-prick away from completely deflating that I'm left wondering what makes you so assured that their argument is baseless and why you think you're so much more informed on this than people that have literally been analyzing the potential outcomes for months, much less why the CMA's decision would fall apart on an appeal. I'm not a regulatory expert in any sense and I will fully admit that, but I'm not going to approach the CMA's arguments like they were crafted with a complete absence of logic.
I have to admit, I'm really curious why you're both caping so hard for Microsoft on this.
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By agreeing to will a distinct high class console market into existence, it affects what defines "the parties being regulated". Suddenly Sony's words have more weight than Valve's or Nintendo's as to how the whole market would be affected.
If Microsoft had gone in talking about how having Activision would help boost colorful platformers, Nintendo balked, and suddenly there was talk of Xbox+Switch making up a "platforming console market", that would also be stupid.
Because they're not supposed to be picking definitions based on preformed conclusions.
Which is also what I've been saying. I'm not hyperfixating on CoD, I'm just saying it IS relevant. Especially since CMA's stated basis for blocking the acquisition, the one that they put into official writing, is "We are concerned that making Activision’s titles exclusive to Microsoft’s cloud gaming service would harm competition, particularly since our view is that Microsoft already holds a strong position in this market". That's their official reasoning.
Which I already mentioned: "Both MS' position as a cloud provider and ABK IPs are relevant to the conversation."
If you've read the report you'd see that CMA's basis for saying Microsoft does not count Nintendo as a competitor is because they don't show up in business e-mails. It's not exactly solid.
Valid point. I'll amend it to my own opinion.
I don't think I'm more informed. I am just making my own, independent assessment of the situation. And if that's your reasoning, other regulatory bodies like CADE, JFTC, etc. have evaluated this deal and have approved of it. Are you just going to accept their conclusion because they've analyzed this deal for months, too?
There is some logic to what they're saying as I've previously mentioned. In fact if you refer to one of my previous posts I commend the CMA for crafting an argument that Microsoft will find difficult to appeal in court. That said, I'm still going to poke holes in their findings, because it's 1) academically interesting and 2) I expect regulators to have a firmer grasp of mathematics, economic theory and the industries they oversee.
I'm not caping for Microsoft at all. I'm fine with the acquisition being blocked. At the same time, I find the CMA's arguments weak. It's not that complicated.
Hailinel
Musou Mania!
All right, fair.
And I apologize for jumping on you like that. Frankly, these discussions get so overloaded with cheerleaders (including ond person's bizarre f-you to the UK in general???) that some of the nuance has gotten lost. Some people just really, really want this merger to go through without understanding what regulatory bodies are for or why crafting the arguments they make, as seemingly flawed as they can be, is an important part of what they do. I'd rather see every deal like this be scrutinized to hell and back than given a perfunctory rubber stamp.
For what it's worth, I certainly think the CMA's argument can be better, and the bodies they've disagreed with are not necessarily wrong themselves. So again, I apologize for taking your argument out of context.
Tentacle-tropes
Kremling
- It’s not the key piece but a very important one that a lot of their arguments hinge on. They have been arguing this in their dropped console SLC. Their own conclusion which I have linked to you points to the main argument of CoD being essential for competitors in the cloud market to succeed. If you wanna ignore that then I can’t help you
- They are repeating the exact same mistakes with their dropped console SLC. They dropped for a reason because it contained: faulty math, insufficient/no evidence, unsound logic. It’s the same thing we saw with the FTC vs Meta in the VR market. Almost same exact reasoning & that case was thrown out because it made no sense whatsoever.
Hailinel
Musou Mania!
If you can prove they didn't, I'd be impressed to see that.
Tentacle-tropes
Kremling
Considering the CMA literally dropped their console SLC of their Phase 2 report should really speak to the fact they didn’t. Among those were trying to pass off 5yrs gain vs 1yr of loss. Going against their own survey for the amount of people that would switch consoles. And, providing reasons such as MS would have to develop for the Switch as to make a 10yr deal inadmissible
If you wanna go back further we can with the FTC & their joke of a first report which had a former chair harshly criticize it for many reasons including: leaving Nintendo out of an industry analysis & little to no evidence on many of their points. You need look no further then what is happening in the FTC currently.
Why Christine Wilson’s resignation from the FTC matters
With Christine Wilson’s departure, the Federal Trade Commission (FTC) has lost a champion for high-quality work and open debate. Many will miss her, but the staff and consumers will suffer the most…
thehill.com
Hailinel
Musou Mania!
The FTC and the CMA are not the same organizations. And to state as fact that the CMA, a regulatory oversight body, has not done due diligence based on your own speculation of the proceedings, is pretty backwards.Considering the CMA literally dropped their console SLC of their Phase 2 report should really speak to the fact they didn’t. Among those were trying to pass off 5yrs gain vs 1yr of loss. Going against their own survey for the amount of people that would switch consoles. And, providing reasons such as MS would have to develop for the Switch as to make a 10yr deal inadmissible
If you wanna go back further we can with the FTC & their joke of a first report which had a former chair harshly criticize it for many reasons including: leaving Nintendo out of an industry analysis & little to no evidence on many of their points. You need look no further then what is happening in the FTC currently.
Like they just had an investigation into the agency because of stuff like this & their awful handling of big cases like with Meta-Within.Why Christine Wilson’s resignation from the FTC matters
With Christine Wilson’s departure, the Federal Trade Commission (FTC) has lost a champion for high-quality work and open debate. Many will miss her, but the staff and consumers will suffer the most…thehill.com
No worries.
Tentacle-tropes
Kremling
I love how now they are both different & it is now speculation even though the FTC is also a regulatory body currently being investigated with high amounts of turnover because they aren’t doing due diligence.
CMA drops console gaming concerns on £57bn Microsoft-Activision takeover
It now believes the deal “will not result in a substantial lessening of competition in relation to console gaming in the UK”
www.standard.co.uk
If they did their due diligence then they wouldn’t have to say something like this after trying to pass off faulty data. This isn’t speculation if you’ve been following it.
Adulfzen
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even as a gamepass pc user I'm glad there is at least some pushback towards huge corporations just buying up other companies like they're playing monopoly.
the assumption that it would magically fix every issues at Activision/Blizzard always seemed a bit naive to me, if anything after the dust settles Microsoft will start looking at all those acquired studios and "redundancies" they can get rid of which historically is what happens when mergers happen accross most/all industries.
the assumption that it would magically fix every issues at Activision/Blizzard always seemed a bit naive to me, if anything after the dust settles Microsoft will start looking at all those acquired studios and "redundancies" they can get rid of which historically is what happens when mergers happen accross most/all industries.
boodream
Paratroopa
Artificially creating competitive barriers to market entry is not against "ethical capitalism", it is in fact against the proper functioning of capitalism altogether.
Acquiring market share through performance and innovation is not at all the same process as achieving it by excluding competitors. Producing value is not the same as capturing it.
The whole question, as you put it so well, is whether or not this merger project carries the risk of hindering competition. One might think not, and there are some excellent arguments, used by Microsoft, that might point in that direction. It is perfectly legitimate to criticize the CMA's decision in absolute terms. On the other hand, it does not seem to me to be relevant to contest the CMA's decision on the grounds that either everything is fine as long as all competition has not been eliminated, or that a merger project whose goal is to adapt to the future cannot be evaluated with... the future in mind,
The whole situation is very political. We see it in the messages here: whether it is the nationality of the actor or what we think ideologically, for good or bad, about the neoliberal drift of the market economy, has an impact on our reception of this deal. Even if we think all the better of it, this is not enough to disqualify the legitimacy of a regulatory authority.
On the other hand, one point I don't read much about here, and which seems to me to be a strong argument in favor of Microsoft, is the emergence of players like Tencent or potentially various sovereign wealth funds that play with different rules and justify a re-evaluation of the competitive landscape.
If there is an urgency to move, it seems to me to be here. Because if not, I'm not even sure it's in Microsoft's global interest to overpay for an acquisition rather than invest money internally to be more successful. We have an example of this right under our noses with Internet browsers. If Microsoft had spent the same amount of energy providing a better browser than the competition as it did engaging in anti-competitive practices by trying to force theirs down our throats, the situation might have turned out better for them.
I’m inclined to agree on moral grounds, but the reality is that acquisitions are considered as valid as a competitive strategy as self-development. It’s easier to purchase existing talent and resources rather than growing your own from the ground up. It’s also hard to invalidate the practice of M&A given it’s one of the avenues by which smaller companies can resist getting crushed by the megacorps.
Of course it’s relevant. It’s the entire point of antitrust.
The competition does not need to be fully eliminated. In general most seem to agree that >50% marketshare is where you start drawing the line.
But anti-trust isn’t about ensuring competitors aren’t harmed at all. The whole point of competition is for competitors to keep each other on their toes.
I’m not sure I understand your point? Because predicting the consequences of this merger has always been one of the primary objectives of anti-trust. Of course you need to keep the future in mind.
I’m honestly getting confused here. Regulators have authority by definition. That doesn’t preclude them from getting criticized.
We’ve talked about this on Install Base. If the deal with MS falls through, ABK is likely going to try finding another buyer, and the likeliest candidates are big groups with relatively small shares in the gaming market, like Tencent.
boodream
Paratroopa
(This citation system is annoying).
1) Of course, the point is not to be fundamentally opposed to every merger. That would make no sense. We are not talking about a dynamic start-up here, but about ABK. It's all a question of size and impact. It's also not about a merger in general. It's about a $69 billion merger.
2 ) I was not referring specifically to your posts on this topic - I apologize if I gave that impression - but rather to the "fuck yeah, USA" sentiment of some of the responses.
3) At this point, I think it is interesting to discuss the decision. However, it is difficult to set a percentage for a market that is still emerging.
4) We agree. The point, of course, is not to preserve competitors at all costs neither to wait until they die off completely before noticing a problem.
5) Once again, I was referring to specific reactions that disqualify any notion of economic perspective.
6) As you know, my post to which you replied explicitly states that it is legitimate and relevant to criticize the CMA call, so I don't see where the confusion comes from. Rather, I wanted to point out that it is more useful to discuss contentious elements, as you do very well, than to believe that a decision can only be relevant if it conforms to certain sensibilities, which are respectable but remain ideological. For example, it is not the same to say that buyouts are a way to create growth, which is a fact, or to say that it is the ONLY way, which is a bias and I am sure we agree on that.
7) I really need to go read Install Base. I've signed up but I have a reflex to come here.
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Spyder
Shriekbat
You are absolutely delusional if you think Microsoft and Activision are gonna pull out of the UK over this
That's why the upcoming CAT appeal is so interesting. While it's true that historically CAT tends to agree with the CMA, this is the first time the CMA's report has been so speculative, without even including a basic cost-benefit analysis.
Ah, I see. I think for the most part, people should be allowed to be ideologically supportive of or against this merger. We're just laymen, after all. But regulators need to argue the point with logic, and I think people that want to discuss that logic should be allowed to do so.
It's the best place to discuss the business side of gaming, in my opinion. Join up if you're interested in that sort of thing.
They don't need to, if they threaten to likely UK will fold. They likely wrote all these press releases with Microsoft software.
BRRRRRING
Octorok
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As previously noted, delusional.
ItWasMeantToBe19
Manakete
Pretty sure if Microsoft did this, they would be viewed as a national security threat from the US, China, and everyone else and the company would be seized by the US government.
And like I said, they aren't gonna switch to Linux to prove a point lol
ItWasMeantToBe19
Manakete
Do you live in some delusional world where world governments take this lying down and say "yeah, we will just let Microsoft do this"
"This isn't a national security threat at all"
Microsoft does not have a military to fight off the US government.
BRRRRRING
Octorok
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The delusional part is thinking the threat is even on the table.
The US government is not gonna care either way. If CMA blocking the merger says Microsoft would have to cease all business in the UK, then fine. It's their own rule, they can enforce it if they want.
ItWasMeantToBe19
Manakete
The US government is 10000000% going to care, you are absolutely fucking insane.
Microsoft destroying the infrastructure of a major US ally won't cause a massive reaction from the United States? What the fuck are you talking about.
They only destroy their infrastructure if the UK enforces their own rule and willingly kicks them out. Microsoft has no control over if they choose to enforce that or not. If they do chose to enforce it and kick them out, their destruction is on their own hands. They would never do that (obviously), so if Microsoft just continues with the merger they would still be allowed to continue business.
That's exactly why this ruling is an empty threat to Microsoft, the UK would never dare to actually act on it.
ItWasMeantToBe19
Manakete
You have lost your mind, Microsoft would not exist as a company days after trying this. Get help.
They're not "trying" anything. They would be continuing the merger as planned and willingly accepting the consequences of their actions if the CMA chose to enact them. But as you've pointed out, the CMA won't because the UK needs Microsoft more than Microsoft needs the UK. If the consequences of the CMA's rules would be so devestating to themselves that you would consider it an act of war, then they probably shouldn't make them in the first place lol
Meanwhile if Microsoft pulls out they are 3bil+ in the hole with nothing to show for it.
ItWasMeantToBe19
Manakete
Please avoid aggressively invoking another member's mental health. For having done so across a series of posts, you are receiving a threadban + one week site ban. - Aurc, Barely Able, Josh5890, VolcanicDynamo, xghost777
Yeah, this is never going to happen, you desperately need to seek help as you have lost touch with reality completely.
Big companies do stuff like this all the time. Once you're big enough you can throw your weight around. It would never get to the point where microsoft has to leave the UK.
boodream
Paratroopa
What I mean by that is that this decision is political anyway. Even someone who doesn't love Microsoft or this kind of mega-merger (and not any merger in general) is obliged to think about the changing stakes and the renewal of stakeholders. There is not only rationality, there is a balance of power. I think that Microsoft has done a good job of explaining this, even if the articles and the communication addressed to the general audience have been very focused on Call Of Duty in response to Sony's complaints.
ItWasMeantToBe19
Manakete
What you are suggesting has literally never happened before. Threatening the national security of a major US ally to achieve a political goal is not even close to tenable, you need to get back to reality.
That hasn't happened, true. It's not a threat to follow the rules, there's no threat here.
ItWasMeantToBe19
Manakete
Playing word games will not make you look more reasonable, get help.
It's not a word game it's the laws that the CMA has outlined.
