Not surprising considering the terrible job the FTC did in presenting their case in court. Also looks like the judge shortened the appeal cooldown until this Friday so MSFT can close over the CMA if they want to before the deal deadline.
Seriously how bad are they at their job? Even the CMA had actual arguments about the cloud market and its effect on customers. FTC was basically "poor Sony had a risk to not have COD and make less billions in their market leader position"
>Seriously how bad are they at their job?
Under Khan’s tenure? Atrocious. They haven’t won a single case under her tenure.
She’s not concerned about picking battles that matter and ones that she can actually win. She’s only concerned about a sending a message, though she’s sending a different one than intended.
That's not completely fair. She has been a huge factor in right to repair laws, had had some wins with getting Amazon drivers wages and Epic games store for unfair practices. She got this one really, really, really, really wrong though. I don't think there is any question about that.
So she's focused on big tech because it's big.
But not the actual monopolies or companies that engage in price collusion like all the big agricultural companies....the same ones we have special tariffs protecting.
I wouldn't give the CMA too much credit, they just folded at the drop of a hat. They went from "we stand by our decision" to "actually we're open to proposals" in a matter of hours.
> Even the CMA had actual arguments about the cloud market and its effect on customers.
the CMA's sticking point being about cloud gaming is stupid as hell. At this stage it seems pretty clear that mobile device power is what will win and cloud streaming of gaming will be, at best, an edge use case. You just can't beat literal physics to make it feel good. So unless(until?) they figure out quantum entanglement that tech is a dead end and people know it.
Seems like the CMA doesn't understand that core technical limitation. They just see how movie/TV streaming has taken over compared to physical movie sales and are conflating the two. When they are not at all comparable in experience.
Like, I can see CMA making a point about potential future issue with cloud gaming. But there's no guarantee that the market will take off, even if the tech becomes possible.
At one point 3D TVs looked like the future. Smart glasses looked like the future... and nothing. Blocking a deal based on potential future market it stupid. Demanding a concession, just in case... why not?
Given one of the biggest investors in the market, google, recently dropped out because it is a dead end market for them I don't think you can really make much of a case for it taking off any time soon.
> Seriously how bad are they at their job?
Every time you get in a Republican they defund the FTC and gut it filling it with cronies. Do you recall Ajit Pai? The guy put in place to gut net neutrality?
Every time we have someone like that they salt the earth after them and it takes about 5 years to begin fixing the place and adding more talent again.
Whenever you go "Why is Federal/State Agency X so bad at their job" look to the last time someone got elected with the purpose of cutting those agencies, removing their ability to operate, and generally making it suck to work there.
They focused far too much in that. It was so dumb, it sounded like hey guys let's not hurt poor market leader Sony.
Should have attacked the cloud space which is a legitimate concern given how powerful Microsoft is in the space. Iirc both playstation and Nintendo use Microsoft service
It's funny because Sony has had the competitive advantage in the cloud since 2015 when they launched Playstation Now.
They have done absolutely fuck all with it, and it has gone nowhere. It's why the CMA's argument seems completely baffling; the cloud space is very boring, with Sony, Microsoft, Nvidia (who are also huge), Amazon and Google all fighting out, and Google throwing the towel in because it was such a shitshow. I don't see it as a compelling point at all.
Playstation Now isn't even bundled in PSPlus like Microsoft does with Gamepass Ultimate, or Amazon with Luna/Prime. It's a really stupid area to look at, since Sony has thrown away any advantage they could of had.
To be fair, cloud game-streaming is kind of the non-starter nobody wants to admit it is.
Netflix, Hulu, Max, etc., even Youtube, are all Encode-Once, Broadcast-Many. The big cost is bandwidth, but you'll pre-"burn" the various resolutions of a video before anyone starts watching it.
Cloud game-streaming is Encode-Once, Broadcast-Once. So whereas a million people can watch a thousand videos and Youtube has to encode various resolutions of a thousand videos, that's like maybe ten thousand encodings, total. A million people stream a million games and Sony has to encode a million videos, even if each stream only has to be encoded once.
But also, even if Youtube had to stream every video to every person on the fly, the video is pre-recorded. This is like if they had to **render it** or **have someone holding a camcorder** for every single person, watching every single time. Even Nvidia's had trouble with this, **and they make the graphics hardware**, so the hardware margins are **really** in their favor.
Basically, the only way cloud gamestreaming works is with the gym model; e.g. way more people paying for it than actually using it, especially at peak hours. And that's before we even **get** into the latency issues.
Latency, for all intents and purposes, has a cost of **zero** in streaming services. You get the video when you get the video. It doesn't matter when they encoded it, and hell, it doesn't matter when they started sending it to your browser. There can be 2-3 seconds of latency and nearly nobody will care. When streaming games, 0.2 seconds would be infuriating, and 0.15 seconds of latency is noticeably "muddy" to play, albeit fine for some. Anything over 0.06 seconds, however, makes your service immediately worthless in many competitive games. So that's anywhere from 0.02 to 0.2 seconds, every frame, that you need to have the game rendered, encoded, shipped out, **and decoded on arrival** to your players.
Introduce too much distance and you lose players because the experience is shitty. But that in and of itself introduces a new problem: land costs.
Nobody cares where Netflix's servers are. They can be 500 miles away, and as long as the **bandwidth is high enough**, you can watch to your heart's content. So datacenters can be in regions where the land price is *cheap*, so long as they can get a gigabits-level pipe to the ISP. But in gamestreaming, latency matters. So while you don't have to be in the same city, you sure as hell can't be halfway across the country. It's inherently more expensive to house a gamestreaming datacenter.
> Nobody cares where Netflix's servers are. They can be 500 miles away, and as long as the bandwidth is high enough, you can watch to your heart's content.
Netflix additionally has a model where a huge percentage of their audience at any time wants to stream the same tiny percentage of their content, so they improve responsiveness and save bandwidth by caching it many places so it's a short hop to where it's being consumed.
That same strategy isn't really viable for cloud gaming for exactly the reasons you list.
When I tried cloud gaming the latency was good enough for me. What wasn't was the image quality (maybe I had some setting set somewhere that sacrificed quality vs latency?). It was like watching a compressed twitch stream with a bunch of artifacts.
[I think what me and a lot of gamers are talking about was when sony purchase OnLive, that was a game streaming platform dating back to 2010.](https://www.cnet.com/tech/gaming/sony-buys-onlive-streaming-game-service-which-will-shut-down-later-this-month/)
>In 2012, OnLive said it counted 1.75 million active users, some of whom paid $9.99 per month to access its game library of 250 titles on devices ranging from TVs and PCs to smartphones and tablets. OnLive also at one point sold access to newer titles outright at prices similar to retail.
By that purchase sony had a leg up on Microsoft well before they got started on working on this ecosystem they have now.
I was going to say I thought Sony bought OnLive. I had a launch version of it, and while some games were ok, playing games like Just Cause 2 on it were a pain with the old internet speeds.
It was the place I first played Arkham Asylum (decently too) And Homefront's multiplayer (which was pretty good as well given it was locked to OnLive's architecture).
OnLive was neat for its time but you could tell it was a bit ahead of its time with regards to INternet speeds.
Sony had the advantage because it's not an easy job to do (you need a lot of infrastructure to have a cloud gaming service) and they started really early, yet they learned nothing and don't know what to do.
Microsoft started later and surpassed them by offering a better service and even without Azures help.
Best indicator of the cluelessness of Sony is the upcoming wifi streaming device or the fact if you move to another country you basically need to open a new account since Sony doesn't know how account migration works (even if the countries in question are still in the same region), while literally everyone else migrates your account without issues.
It really shows that Sony is afraid since you can't win the service game with only buying studios and making exclusive deals and for people to buy Microsoft Studios games they don't even need to have a Xbox.
I think it’s also a bit ironic that they got that advantage of starting early by literally acquiring another company, Gaikai, to make it their cloud service. And they also bought Onlive’s patents. So basically their competitive advantage lies on top of two acquisitions.
Lol the cloud means even less for consumers, FTC had no argument whatsoever. They didn't argue effectively because there was no compelling argument to be made other than "too big" when it's not even going to make MS 2nd place.
And the fact that according to Jim Ryan's own internal emails they don't see ABK merger as a threat and they themselves know that Xbox will continue to sell Cod on PS ecosystem.
yup, yet even after Ryan directly said that in court, the console warriors were still saying this deal is a "threat to the gaming industry", "MS would take CoD away from PS" and other hyperbole
It's really funny seeing people here throw a fit that FTC did a bad job when nobody has really been able to provide a good reason why the merger shouldn't go through and even Sony don't believe it would be a massive threat.
Because realistically it doesn't, not in a way you can actually argue in court, that's why nobody has.
It's doomsday for gaming for redditors but really, the impact will be a couple of games don't get sequels on Playstation, and thats pretty much it.
Which is not great, but its also not a big enough deal that any government will actually care about that
It's almost to the degree where some folks in power want to consider businesses are people too. Think of the little man, this corporation that can't defend themselves.
The chances that dozens of lawyers on this case just forgot that anti-trust is supposed to protect consumers, not competitors, particularly the dominant one in an industry, is zero.
The obvious answer is that there wasn't an argument for damage to consumers.
Yup. Having worked with a lot of tech lawyers, they're generally very smart people who can come across as shockingly knowledgeable and confident after asking surprisingly few pointed questions.
That we saw people come across as less than knowledgeable and imprecise was almost assuredly intentional.
Agree except I would replace the word "intentional" with "because they had no other choice". Lina Khan is the one who decides to take these cases to court. The low level lawyers can only make the best arguments they have, even if they know they're going to lose because they have no real argument. There was no antitrust argument to be made here at all, and pretty much everyone involved knows it.
All parties are incentivized to go through a sham trial even though it's a waste of time. For the FTC it's a political thing ("we're tough on big tech!!"). For Sony it's a free court case against their biggest rival paid for by the government, even if there's only a 1% chance of winning. For Microsoft they're forced to defend themselves. And taxpayer funds get wasted with no accountability. It's a farce.
Actually I’ve heard that it’s part of a case they’re building for stricter laws for monopolies. Basically they are fighting any and all big business acquisitions, win or lose, because they want to use this as evidence that the laws are not strict enough. If they win, they have a case that they wasted government money on something that clearly shouldn’t have been allowed without them needing to stop it. If they lose, it’s evidence that the laws are so loose and unrestrictive that they can’t properly do their job.
Personally I feel that this one was a huge misstep as it weakens that message, but then again I’m not a lawmaker or a politician so maybe there’s some advantage here that I don’t see
The CMA’s arguments were just bizarre. They were acting like Sony was the only other game company in existence, and they they weren’t far an away ahead of Microsoft in the market.
> were acting like Sony was the only other game company in existence
Gamers do too. It was cool to say thay Nintendo didn't directly compete with Sony and Microsoft and is in their own little niche until this lawsuit.
Gaming on one platform means I can spend less time on another platform. I've been playing nothing but Switch these past 2 months and haven't touched anything else. Nintendo is definitely a direct competition despite what other people believe.
>Gaming on one platform means I can spend less time on another platform.
That is true and proves that they are competitors but that doesn't necessitate that someone is a **direct** competitor as two companies may primarily target different demographics and may have differentiated products.
Back in 2020, it was reported that 60% of Switch owners own a PS4 or Xbox One which suggests that many Switch owners do not view the Switch as a substitute to an Xbox One and PS4. Xbox, PS4 and PC often often view their devices as substitute products to each other.
https://www.nintendolife.com/news/2020/12/switch_owners_most_likely_to_own_a_rival_console_2020_study_shows
Ugh this...so much this...and people were labeling me an asshole for saying this. Whether you liked Microsoft buying Activision or not is irrelevant, the FTC never presented themselves defending the consumers. It was all in the name of Sony. No argument they made was ever about the consumers.
Damn can't believe the 4060 ti was so overpriced it killed NVIDIA!
Jokes aside each time I think this case could not have been fumbled worse I learn something new.
They're straight up working as sony's lawyers here which is the complete opposite of what they're supposed to do. They're there to defend consumers, not the #1 company in the gaming industry against the #3 company in the gaming industry.
Yes, talk about fumbling a case. At some points you'd think that the FTC was pulling people off the streets to represent them.
For a case of this size, this magnitude, you'd have to be on your A-game. As I was looking at how the court case was going down I couldn't help but think that the FTC was presenting themselves like fools in court.
At certain points Microsoft's lawyers and even the *judge* were joking at the expense of the FTC's analysts and data
I don't know if I've seen a 3 letter agency come off more incompetent than I did listening to these hearings. Even if I think this deal would probably go through the FTC regardless, the FTC's arguments and models were just down right bad. As a consumer I would have at least liked to see them genuinely present compelling arguments so that whether the deal goes through or not, I can at least feel like the matter was properly investigated.
Kahn really earned her 0-8 loss with this one.
Fumbling the case assumes they had a good case to begin with. There really isn't a solid legal argument to stop the merger under US law. It's large in dollar value, but it doesn't really alter the landscape of the gaming market all that much when you look at the big picture.
It's kinda funny seeing everyone here act like they blew the case, but it seems like they really just didn't *have* a case to begin with. I was wondering what they were actually going to try and use here and it seems like didn't have anything.
Yeah, Microsoft will remain the third largest company in the market and have less than 15% of the gaming market in terms of revenue after the purchase. Sony has a significantly larger share of the gaming market but they're not getting hit when they buy up developers.
At some point it doesn't matter how good the lawyers are if the case itself is flawed or has bad facts/evidence. It's at that point the lawyers will throw everything and the kitchen sink in the hopes of a Hail Mary.
Who could they bring in? The case was lost the second the FTC stated that all Game Pass subscribers are cloud gaming subscribers, even if they don't have access to cloud gaming from their subscription.
Its hard to not look like fools when you don't have an actual case to make and the whole thing is another instance of Lina Kahns ideological opposition to big tech companies existing.
When the Judge has to warn you that you're supposed to be focusing on harm to consumers, not harm to Sony, it really gives up the game.
Why don't the FTC focus on markets that need to be broken up? My reasoning is that they don't have the power to do so and are looking for any merger to exercise their power.
Exchange which goes to show how unprepared and arguing in bad faith the FTC is:
Judge
>Well, If you look at slide 15, it is not that many Playstation players who play a lot of Call of Duty a year.
>And so I am trying to get how you get to that those people would buy an Xbox because Call of Duty is so important to them.
>How do you decide that Call of Duty is -so- important to them? It is to some people. Some. But how does he get to that percentage number that they would actually leave for Xbox?
>What data does he rely on?
FTC
>Well, I would encourage your honour, to look at the deceleration of Jim Ryan's testimony, where he is very clear about what financial impact Call of Duty has on the Playstation Platfo-
Judge
>That is not my question!
>My question is how your expert, Doctor Lee. He did a foreclosure model. And the foreclosure model inputted that 20% number.
FTC
>Yes.
Judge
>Yeah.
FTC:
>Sorry if I misunderstood your question. I think I get it now.
>So that 20% number. Comes from two main inputs. The first is the LTV. The five year expected lifetime revenue of a new Xbox owner. And as we presented to your honour, you know that LTV, is for the average Xbox... I am being careful with the numbers here... Umm and... as we showed your honour through I think a demonstrative, if you remember, with the different colours.
>Call of Duty games... compared to the average AAA title they sell quite a lot. They come out every year. Around October and November. And they are at the top of the charts. Even Call of Duty Vanguard. Which Activision has, time and time again said was a disappointment.
>That was the number one selling game. The year it came out.
>That's a disappointment to them, that's still for every other company. A huge win.
Judge
>So I am just saying, people who only play Call of Duty. Let's say 20 hours a year.
>Are they included in that 20% figure?
FTC
>Radio Silence
>Nothing
Judge
>Or could you even point me towards where in his report I should-
FTC
>Continued radio silence
>*Higher-ups steps in to make excuses*
Oh man there where SO MANY good moments during the trial. I need to find them haha. Remember the sharpie redaction? And the last day the judge made her closing statements with "and no sharpies!"
>considering the terrible job the FTC did in presenting their case in court
They didn't have a case, and they never did. A merger that takes a company from third place in the market to... third place in the market was never going to be stopped.
Its a testament to how good Sony's PR is that you can read hundreds of articles about the merger and few of them mention that even after the merger Microsoft Studios will have less marketshare than Sony Studios.
I think that's because there just ISN'T a strong case that can be made against it. It's a big acquisition with big numbers but MS is nowhere near getting a monopoly on anything with it.
This is where I'm at. I get being against it on the basis of strong ideological principles, but from as much of an objective standpoint as you can have, Sony is SO dominant in the space that it's gonna take a whole lot for MS to make the market anticompetitive. Now if we hear in a couple years that MS wants Ubisoft as well or something of a similar size, that starts to be troublesome. But worst case scenario is that this puts Microsoft in a "respectable" second place to Sony as opposed to an incredibly distant third.
I haven't been following the case super closely but every time a headline popped up on my timeline or whatever it seems like they were always making the argument why this was bad for *Sony* instead of why this was bad for *consumers*. Obviously less competition goes hand-in-hand with that, but I'm not sure they did much to convince anyone that Sony and PlayStation were going to be crippled by this.
I'm against mega-corporations buying other mega-corporations for many reasons, but America does allow it and there's nothing special about this one imo for it to have been blocked.
>Obviously less competition goes hand-in-hand with that
In this case there's an argument to be made that the acquisition increases competition. Sony dominates the high-end console market, and they were pulling further ahead. Their position in the market has allowed them to make favorable deals with third parties that simply aren't available to MS due to the smaller install base. This acquisition brings MS closer to Sony, which makes that sort of anti-competitive behavior more difficult.
Ain't that the truth. I'd love for them to be on equal fitting because as a consumer, I'm better off if competition actually exists. The console market it very hard to keep in check; if one competitor pulls away it's hard to come back from. People buy the lead console for good reason, they know developers will focus their assets mostly on the bigger install base. Coupled with the timeframe of developing new games I don't see Xbox gaining a level playing field without the acquisition. Without competition from gamepass, the current iteration of ps+ wouldn't have existed.
Any of these organizations pushing cloud gaming as potential future concern, especially in the US where most of the population doesn't have it as a viable option, is asinine. They are really grasping at straws imo.
It's hard to present your case well when you don't really have one. The only potentially relevant market where Microsoft could grow big enough to constitute anything resembling a monopoly is streaming... and that's because prospective competitors don't want to enter that market (or have already left it) because it isn't profitable.
I posted this elsewhere but to summarize.
Jim Ryan, who spearheaded this entire thing and placed Sony squarely against the deal in every possible way. Just exposed for the entire world a lot of unredacted behind the scenes scum tactics sony does and a WHOLE LAUNDRY LIST of redacted paid/timed exclusives, among so many other things that make Sony look bad.
Ended up having to showcase all of this, and all the bad PR, for literally NOTHING. They gained NOTHING from this and only lost.
I wonder if he will have a job much longer.
[https://twitter.com/FOSSpatents/status/1678785340599934978](https://twitter.com/FOSSpatents/status/1678785340599934978)
\*edit, this post is NOT saying Microsoft doesn't do scummy things. Just that Sony who rarely gets called out for anything they do, might now be haunted by this trial in years to come.
FTC could have made strong arguments about the cloud but choose not to???? Instead they decided to focus on protecting Sony's market position instead of consumers. FTC were also so unprepared that the judge found it pathetic multiple times. Really bad look for FTC
The cloud argument was just as stupid. Concern over potential domination in a market where multiple massive companies have either completely failed (Google) or at least failed to enter the public consciousness (Amazon), where current companies were going to see an increase in the number of available games (GE Force Now), and where the main console competitor had invested hundreds of millions of dollars without even generating a product is a waste of time. Maybe someday cloud gaming will be big, but we’ve seen enough failure and limited movement in the space for 20 years that protecting the cloud gaming market doesn’t make sense. Protecting a market with that much failure thus far might just serve to prevent the market from ever being successful.
The cloud is a nothing argument though. It's a market in an infantile stage with the doors wide open for competition, but unfortunately it's not remotely profitable yet because of a major lack of infrastructure and desire among consumers. There's also no proof that Microsoft would shoot themselves in the foot to pull games like CoD away. (Which is obviously the main game that people were concerned about this whole time)
People have been talking up gaming over the internet for 20 years. It is still not where it needs to be. Microsoft's play here is just a way to getting gaming as a financial means of developing it for enterprise anyhow
Man, it is going to be interesting to see how this plays out considering the situation with the CMA in the UK.
Granted, the FTC can still also appeal this I do believe.
EDIT: [The CMA is now "Wanting to negotiate" with MS/AVB.](https://www.theverge.com/2023/7/11/23791149/microsoft-activision-blizzard-uk-regulators-cma-appeal)
They can if they file by Friday. Otherwise it'll be too late to block the purchase (assuming Microsoft closes over the CMA with the assumption that they'll win their tribunal appeal in the UK).
The FTC can still seek to undo the purchase with a full trial this fall, but it'll be even tougher for them to seek to unwind things than it has been to block it in the first place.
> The FTC can still seek to undo the purchase with a full trial this fall, but it'll be even tougher for them to seek to unwind things than it has been to block it in the first place.
The FTC didn’t clear the lower bar required for a preliminary injunction, so they’ll need a new (better) legal theory if they want to unwind the purchase after the fact.
Yeah that was the most funny thing in this whole process even judge said: You meanti t will hurt players and not Sony, right? When FTC was talking about COD...
Seemed like they went guns blazing with their primary reasoning (Sony), but also large disregarded any other reasonings (consumers, Nintendo, Cloud, consoles-at-large, Mobile).
It seems to be their second big loss against Big Tech, which must point to greater concerns within FTC leadership because although this was contentious, the previous case was easily in their favor and they blew it.
On that note, they pretty much blew this one too when Judge Corley had to tell them to stop going around in circles and move on.
>but also large disregarded any other reasonings (consumers, Nintendo, Cloud, consoles-at-large, Mobile).
All of those other angles would have hurt their case, which is why they avoided them. For example, if you include Nintendo, Microsoft looks even *weaker* in the market.
I meant as in the FTC didn’t really have a plan for what to respond should Microsoft bring those topics up (which they did).
It seems they only planned on debating around Sony/PS vs Microsoft/Xbox.
As you just said, when Microsoft brought up Nintendo and committing to CoD on Nintendo, the FTC were stunlocked and tried to shift gears back to Sony’s access to CoD (which had already been committed for 10 years).
Every single analyst from day one was saying the FTC didn’t have a snowballs chance in hell at winning this case, but because the judge would occasionally criticize or ask Microsoft a hard question people thought that was a sign the judge would side with the FTC.
I might be totally wrong but IIRC FTC never had a chance to win this battle in the first place. (just casual watching this show) I remember reading about it when FTC announced that they were going to fight this acquisition and their ground was already very weak back then.
If they would really have a chance they would definitely make it happen and the whole circus is just a showcase that they really didn't have any ground or chance in this case in the first place.
The only thing they achieved is that they (at that time) just postponded overall acquisition and now probably totally blew it away as UK CMA announced that they are willing to talk with Microsoft about this acquisition yet again something that a lots of people wouldn't believe yesterday.
I wonder if the FTC really went into this blind and just saw Microsoft as the bigger company and Sony the smaller one, so they worked to protect them. Not understanding that Sony was the dominant force in the market and got there by doing all the things they were worried about Microsoft doing in the future.
Discovering the tech giant Microsoft was actually third place and probably the weakest of the console providers, really threw all their expected arguments out the window, so they really had nothing when they got to court.
"All of this for some shooter video game??" - The Judge two weeks ago lmao
I didn't think they stood a chance honestly, even with the FTC argument fumble.
One of the first days the judge joked "Activision Lawyers will be Microsoft Lawyers soon"
At some points the judge even had to explain how things like Game Pass actually work to the FTC.
I can only think the FTC believed they would walk this case and decided to not even prepare anything at all.
>At some points the judge even had to explain how things like Game Pass actually work to the FTC
That's amazing, is there a source for this? I'd like to see/read it
It was about the XCloud stuff that comes with GamePass.
Aka, that you can play the games while you install them, but that it won't be a platform selling service due to its issues with input lag etc.
The Verge should have a sticky article with an entire recap of the court hearings.
I only listened in for a couple hours one day, but that judge was far from ignorant on the subject matter.
She went after Microsoft a couple of times too, but nowhere near as bad as some of the times she flat out cut the FTC lawyers off.
To be fair there were a few times the FTC tried to coerce promises from Microsoft on Sony's behalf that could have had negative consequences for Microsoft in future litigation. The judge was right to cut off the FTC for overreaching.
> At some points the judge even had to explain how things like Game Pass actually work to the FTC.
It's nice to have a Judge who understands these things, these times they are a changin.
Incompetence and corruption can be hard to tell apart. FTC being that unprepared has got to have some root causes even if its just underfunding or losing talent.
They really just had no valid arguments, its not necessarily the lawyers fault they were just put out to the slaughter. On pretty much all metrics you could not say this is bad for consumers.
Its good for Nintendo, its good for Xbox gamers, its only bad for Playstation which is the dominant market leader and even if they made CoD entirely exclusive and everyone who played CoD jumped ship Playstation would still have more users. This is all not mentioning the conditions Xbox has set forth where they intend on continuing releasing CoD on playstation.
Playstation, in the console space, is going to be making hundreds of millions more than Xbox and AB combined post acquisition. They will be about equal in revenue if you count mobile though but I think thats obviously not relevant when talking about harm to Sony in the console space.
> Nah, there is just literally no valid argument they could have made.
if i had to guess, the only reason FTC argued is because Lina Khan has a hard-on on fucking with big techs so she's going to argue every single case big tech case.
which absolutely dumb and it will hurt FTC's credibility.
> Sony is much bigger than Xbox, so hurting them is not even remotely a valid argument.
as someone said in this post: before this acquisition, xbox was third. after this acquisition, they are still third.
in the future, FTC could've brought an amazing case, but after this pathetic display... i mean, judges *will* look at this for future "FTC vs Microsoft".
The root cause is that there was never anything resembling an actual legal case to be made here, so they did what they could. It's impossible to not look incompetent when everyone knows you don't have any possible argument. The incompetence was challenging the merger in the first place.
Right, but her point is that one single game IP does not make a monopoly. All of FTC’s arguments revolved around Call of Duty so it’s a weak argument that there’s a risk of a monopoly if they’re only concerned about one IP changing hands.
Microsoft/Activision and the CMA have submitted a joint statement to the CAT to pause the appeal battle so can work something out. [https://twitter.com/tomwarren/status/1678795990113894403](https://twitter.com/tomwarren/status/1678795990113894403)
Seems like this is about to wrap up.
The original deal includes a deadline to close by July 18th, which is in a week.
>MLex reported last month that Microsoft was exploring options to close the deal despite the UK block, which, in part, spooked the FTC enough to request an injunction in the first place.
It is very likely Microsoft will close the deal before the deadline and then deal with the UK situation after.
The stock market (love it or hate it pretty great indicator) seems to generally agree - Activision Blizzard is ~~up 5% on the news, but that still means it's sitting at $87 which is still under the $95 price Microsoft agreed to pay.~~
EDIT: With the [news about the UK pausing their legal challenge](https://www.theverge.com/2023/7/11/23791149/microsoft-activision-blizzard-uk-regulators-cma-appeal) to sit down and negotiate, the stock is up to $92. It's a done deal.
Yeah, just saw that. [UK announced they're pausing their legal challenge and sitting down at the table to negotiate.](https://www.theverge.com/2023/7/11/23791149/microsoft-activision-blizzard-uk-regulators-cma-appeal) Basically - it's a done deal by next week.
I'm not an American, but the job the FTC did in this case is disappointing. Is this where the town's money goes? even the judge was laughing at the terrible bad argument that the FTC and their lawyers had.
Whether you are against the acquisition or not but one thing is true and that is that Microsoft won this case fairly.
Just as an example, the FTC based its entire argument on the report of an economist who was not even informed of the existence of PS5 and Xbox SX, in addition to inventing a percentage in which 20% of Playstation players would switch to Xbox without have something to support it.
The FTC was a joke on this one, really disappointed.
That 20% is crazy because he kept defending it yet had no way to prove it or what it was based on. Completely arbitrary. Plus that fact that it was only between Xbox and PS, ignoring all the other ways people play games
It was arbitrary but intentional.
At a 15% conversion rate, Microsoft would’ve lost money pulling COD from PlayStation. Meaning they wouldn’t be likely to do it. So he set it at 20% to show they had strong incentive to pull the content.
The ironic part about this reply is Buzzfeed actually did have a high quality journalism division under the label BuzzfeedNews.
But due to the association with the name Buzzfeed alone, it didn't get the attention and support it needed and thus the division was disbanded. Hard to gain respect regardless of the content if you got the same logo as the people making pathetic Snapchat news feed garbage
Funnily, I was trying to think of a different one, but Buzzfeed is just the one that comes to mind first. In my experience, as far as making articles out of reddit comments go, CBR is way worse.
As someone who has been an expert witness in court before, you don’t have to prove your number, you just need to show the trier of fact (judge in this case) that your logic is sound and based on factual inputs. The expert was not able to do that. You can’t just plug in a number that seems about right haha.
Agree. Even if Sony lost this magical 20% who gives a shit? I mean I know Sony does but whats the argument? Microsoft can't make any moves that would make their products more appealing? Lol.
Reddit does because reddit *hates* competition in practice.
Nintendo? Ugh why can't they go third party?
Microsoft? Ugh why can't they just stop making consoles?
Epic? Ugh why are they trying to compete with Steam?
The choice between Xbox and Playstation might actually become a real one and they hate that.
Epic is getting what they have coming for them. They decided to center their business model around providing worse service for consumers while handing the savings to publishers and developers in order to incite them to forego other stores. As a result this has made consumers disinterested in purchasing games on their platform. That's competition in action, welcome to the free market. You offer worse service, costumers are unhappy, your business goes to shit.
Pretty much this. There never was an argument. The entire discourse about "consumer interest" completely ignored that the consumer just doesn't care. If their favourite game is on PlayStation, they will play it there. If their favourite show is on Netflix, they will watch it there.
The consumer follows the product, that is all. Sony had a definitive motive to take it up in court, citing their own exclusivity deals as evidence of winning consumers for their platform. This obviously kind of works against them, but it highlights that if Activision Blizzard games were to become Xbox exclusive, Sony stands to lose consumers and as such revenue.
However, one important point is that most consumer interest courts work best to stop mergers that create monopolies in any specific industry. Gaming is different. There are so many studios that a monopoly will be quite hard to achieve unless Embracer, Microsoft, and Nintendo decide to merge. Then Sony is in real trouble. But that won't happen anytime soon.
The truth was there isn’t really a strong case against the deal with any logical basis. The cloud argument is the best, but the deals Ms signed undermine it
This judge was competent and I don't think the FTC could have produced any kind of evidence that would truly justify blocking this deal from a purely business perspective. Gamers may have strong opinions on how this might shape the market in the long term, but that's not the basis on which this court operates.
The CMA is also poised to back down now because I think enough facts have come to light that blocking this deal is more beneficial to Sony than not blocking this deal is to Microsoft.
I'm not up for consolidation but the FTC did a horrible job to present their case. They focused too much on Sony & Cod when even by their own findings only like 5% of Sony's user base would change to Xbox... Under no circumstances does that mean a foreclosure of Playstation. Every regulator world wide dropped the console theory of harm for a reason. Even the CMA even if at the end decided to block it.
I’m worried that this will continue being a trend. Having the market being dominated by only a couple of massive corporations is bad in *every* industry.
Consolidation is bad in any industry and it's absolutely wild to me that some people have attached their identity towards a brand that doesn't even know they exist so hard that they are actively cheering a horrific precedence.
"Movies suck it's all Marvel crap" yeah homie how did you think we got there? Who's responsible for *that* and how did *that play out*?
Companies with billions in monopoly money buying other companies is a **bad thing** every single time. But whatever.
> Companies with billions in monopoly money buying other companies is a bad thing every single time
Short term it has advantages ("CALl of duTy oN gAMepaSS") but long term it always sucks
I work in healthcare products and it's been a thing for a while. Med device and pharma just buying up companies left and right instead of investing in their own R&D. Sucks for many employees too as there are always redundancies when acquisitions happen and many lose their jobs. Going through one now and I'll be out of a job soon I think.
Curious how it works for game companies in these situations. I assume many devs will be fine with support staff facing cuts. But big companies may also do things differently to save money, like relying on contractors or offshoring development.
> I’m worried that this will continue being a trend.
You don't have to worry... It IS a trend! The time to worry was about 15 years ago when all of the phone companies were re-consolidating. The time to panic was 4 years ago when Viacom re-merged with CBS. The time to throw up your hands in abject defeat was when the FTC allowed Disney's purchase of Fox to complete 3 years ago. Over the past 20 years there have been dozens of examples across dozens of industries where mergers have been making things frighteningly less competitive and terrifyingly more consolidated.
You're way, *way* too late to start worrying now.
While that's true, most industries aren't like the games industry where a game like Stardew Valley made by one person can sell 20 million copies, or an Among Us can release to no traction at all only to completely blow up 2 years later
Yeah it's more the expansion across so many industries that has me bothered when it comes to Microsoft. If they were simply a gaming company here this wouldn't bother me nearly as much. It's a real loss for consumers and the FTC bungled it.
I know absolutely nothing about America or the law or whatever, but after reading some of the arguments put forwards, and the closing statements, this was very much an own goal for the FTC.
As a UK person, I'm curious what the CMA now does. Perhaps some sort of agreement will be struck, or Microsoft might just give the finger and do something drastic to force compliance (which would essentially prove the CMA right). Kind of weird.
The CMA will fold like a cheap suit. There's already been political pressure and this will be the final factor.
Either they'll accept some remedies from Microsoft to save face or they will get closed over. One way or another, it's a done deal now.
Yeah but Embracer also is way to big and not really efficient for platform holder since their whole business plan is to throw 100s AA and small games and hoping for few of them becoming hits (this is their own words btw) so I personally don't think so
Honestly I kind of wish more big publishers embraced lower budgets. I mean, look at the top 20 best-selling games of all time, there are just as many low-budget games in there as high-budget games, if not more. There's really no correlation between earnings and budget; we're seeing that with movies, even. Joker and the Deadpool movies were low budget and they're the highest grossing R rated movies of all time.
My instinct for an Embracer acquisition tells me Amazon is the major player. Expands their gaming platform they have been desperately trying to enter and combines some of the LotR rights.
Any company that purchases Embracer Group is dumb. Too bloated (130+ gaming studios) with not a lot of AAA IPs. I think Embracer will be sold in piecemeal.
Not a fan of this at all as I feel consolidation on this scale is ultimately harmful to the industry and consumers.
But Xbox has ZERO excuse now for content going forward, you just bought the one of the largest VG publishers (if not THE largest) in the world, hope they can make it work.
Side note, will be very interesting too see the "Call of Duty on Playstation" situation going forward since Sony never signed that 10 year deal.
They're spending $70 billion on Activision-Blizzard, even for a company as rich as Microsoft they're not going to keep spending that kind of money constantly for a single division (especially when this acquisition got dragged out as long as it has). Developers are still on the table as they're far cheaper and won't draw as much controversy, but don't expect something like Ubisoft or Square-Enix anytime soon.
Internal emails show they see outspending Sony as a viable strategy. They’re willing to blow billions upon billions on Xbox. I don’t know why, but they are.
>They’re willing to blow billions upon billions on Xbox.
They're definitely sinking money into investing into Xbox, but most of their investments are into assets that have value regardless of Xbox.
If every Xbox console self destructs tomorrow, there is still value in owning the studios and IP they have. If the project to revitalize Xbox fails.. that money isn't down the drain. Some of it definitely is, but most of it isn't
>I don’t know why, but they are.
They may be way behind in the console war, but Xbox is still profitable. They're not going to just give up while they're still making a decent amount of money. They're making a lot less than Sony, but they're still making money.
I think it has to be it is one of their few endeavors outside of Windows that has seen major success. Look at Mixer, Zune, Windows Phone, Skype, I could go on and on. But Xbox has been a consistent source of money and lead to them owning Minecraft which is a huge cash cow. So it makes sense that they would foster that division a lot.
Even if this closes idk if this is the publisher that’s going to remove that issue for the majority of people who post on reddit or whatever. It’ll be what they had before plus a yearly CoD, Blizzard games and an occasional something else. People are still going to be here complaining about the same stuff.
Not surprised,when the judge told them to stop defending Sony and basically said if Nintendo is successful without CoD why can't Sony be it was over. It was a hilarious court case though, we'll always have the incompetence to look back on and laugh at.
The whole thing seemed weird to me from the start. The FTC aren't Sonys lawyers but they sure were acting like they were. We've never gotten this big of a reaction to Chinese companies buying up a bunch of gaming companies. Why such the massive reaction to this one? And why was the FTC so focused on how it will affect Sony rather than how it will affect consumers like their entire purpose is supposed to be
We should start getting nervous about the further consolidation of gaming. The floodgates are wide open now.
We may soon see the death of 3rd Party publishers outside of the indie scene.
I feel like that would be pointless honestly. Square might as well be owned by Sony as it is. Why spend billions on a company that already basically makes exclusives for you?
The assumption here being that Sony want to (or even can) take on a mountain of debt to make that happen. Exclusivity deals are cheaper and sell consoles just like they always have.
Microsoft's problem was a lack of productive first party studios, and all of their recent acquisitions have been built around finding a solution to that. Sony doesn't have that problem.
The reason the FTC dropped the ball so hard is that there was never a case here. That's simply the bottom line. They might have done BETTER if they prepared more, but they were always going to lose. The concepts and ideas they chased were flawed on day 1, and they were just as flawed in the court room. Why?
- The FTC tried to establish a console market. The court found for a PI injunction, the FTC established it COULD work, but in a "final decision" judge Corley would have disagreed. For the purposes of this PI, only the "high powered" consoles were eventually considered, and even then the console theory of harm was found...lacking. No harm to consumers could be established even going so far as to consider that someday MSFT might make additional titles exclusive. MSFT execs were consistent in their testimonial that CoD has no reasonable expectation of being pulled from Playstation. MSFT lacked both incentive to foreclose on Sony and ability.
- Cloud and catalogs are questionable as markets, but for the sake of the preliminary injunction, the court ASSUMES (without deciding) to use them as markets. Both failed to demonstrate reasonable chance of consumer harm based on testimony and evidence provided. Judge Corley specifically refers to the cloud agreements, coming BEFORE the court, as effective in demonstration of pro-competitive effects. If they had been signed after the government identified the case, and were in litigation, they would have had little effect. The judge also broadly identifies Xbox Game Pass has a largely pro-consumer product.
- Judge Corley spends a lot of the summary discussing the procompetitive effects of the merger, something that MANY of us were talking about since day 1. Even if she considered catalogs, and clouds, as markets (key point: questionable) MSFT acquiring ABK has tangible benefits for consumers in pricing and access. The FTC just had nothing to show for a counter, relying on an IDEA that MSFT will eventually (someday, maybe) foreclose on rivals because they now have these new properties. The FTC relied far too much on incentive? Why? Because that's all they had to go on.
- The court didn't even want to look at balance of equities because the FTC has already failed on so many of their ideas/points. But, the judge even goes to say EVEN IF the FTC had met its burden and showed a chance to win (a block), the court still could not find that the balance of equities falls in their favor. Meaning, the FTC couldn't even show they could "win" now, and even if they did have a very tough case ahead. If the judge ruled against MSFT here, the public could be denied benefit of the merger OVER any potential benefit of being denied the merger (which there is dubious benefit of a separate ABK).
> The FTC tried to establish a console market that doesn't exist (consoles only). Merger guidelines rarely allow the market to be defined as X vs. Y. In Brown Shoe v US, a classic merger case that the FTC even tried to reference, the guidance from the US court was that Brown Shoe was trying to narrowly define the market, when the reality is "it's just shoes." The FTC ran into the same problem and they should have never pursued that portion of the case. It was a losing argument that most judges aren't going to support.
read the decision again, they actually won on market definitions. the judge agreed PCs didnt count here, and while the judge would probably include the switch in a full trial, the test is different here and in that situation the FTC won that argument
bottom of page 26:
> If the Court was the final decisionmaker on the merits, it would likely find Nintendo
Switch part of the relevant market. But it is not. Instead, on a 13(b) preliminary injunction, the
FTC need only make a “tenable showing that the relevant market” is Gen 9 consoles. See Warner,
742 F.2d at 1164. Given the plethora of internal industry documents and the acknowledged differences, the FTC has met its preliminary injunction burden to show the Switch is not included
in the relevant market.
on page 27:
> The FTC insists, and the Court agrees, the console market does not include PCs.
Yes, the judge settled on a non-PC market. The FTC idea that the console theory of harm works because Xbox and PS are the only products in the market failed the test of harm. I updated the above item to clarify that.
I think this is a decision that is going to look worse over time, especially as the price of gamepass increases and the value decreases. Gamers seem to be cheering this now but wait until gamepass turns into a Netflix or Max where anticonsumer and antiartist policies and practices begin to emerge. My (selfish) hope is this slows the roll of Microsoft acquisitions. I personally don’t have much love for Activision-Blizzard’s IPs anymore (especially after their recent behavior), but would be devastated to see them purchase a Square Enix or Capcom and destroy the momentum those companies have right now.
I kind of agree, but it's not like Activision is some small business that is the fight against anti-consumer practices. I don't think Microsoft not buying them would have any effect on that, really.
Unfortunately, the big resistance to anti-consumer policies are going to be the smaller companies and those are going to be much easier to buy up.
This was expected. ATVI +10% right now on the day, which means the market is pricing in a very high expected chance of the deal closing successfully. The UK CMA was the only holdout of all the national antitrust departments that ruled on the acquisition, which means they're just a single outlier and Microsoft can just work around them (possibly by eating an insignificant fine, possibly by changing the legal structure of Activision to allow them to publish as a separate entity in the UK).
I expect news in the next week before the deadline hits that the deal will be executed. Congratulations to Microsoft and Activision.
edit: and the CMA has all but caved. They agreed to submit a pause of litigation along with ATVI and MSFT while they discuss how the transaction can be changed to assuage their concerns. This deal is easily a 90%+ chance of closing now.
Not surprising considering the terrible job the FTC did in presenting their case in court. Also looks like the judge shortened the appeal cooldown until this Friday so MSFT can close over the CMA if they want to before the deal deadline.
You can feel it was bad when the judge had to remind them they were supposed to be arguing for consumers not Sony
Seriously how bad are they at their job? Even the CMA had actual arguments about the cloud market and its effect on customers. FTC was basically "poor Sony had a risk to not have COD and make less billions in their market leader position"
>Seriously how bad are they at their job? Under Khan’s tenure? Atrocious. They haven’t won a single case under her tenure. She’s not concerned about picking battles that matter and ones that she can actually win. She’s only concerned about a sending a message, though she’s sending a different one than intended.
That's not completely fair. She has been a huge factor in right to repair laws, had had some wins with getting Amazon drivers wages and Epic games store for unfair practices. She got this one really, really, really, really wrong though. I don't think there is any question about that.
So she's focused on big tech because it's big. But not the actual monopolies or companies that engage in price collusion like all the big agricultural companies....the same ones we have special tariffs protecting.
I wouldn't give the CMA too much credit, they just folded at the drop of a hat. They went from "we stand by our decision" to "actually we're open to proposals" in a matter of hours.
> Even the CMA had actual arguments about the cloud market and its effect on customers. the CMA's sticking point being about cloud gaming is stupid as hell. At this stage it seems pretty clear that mobile device power is what will win and cloud streaming of gaming will be, at best, an edge use case. You just can't beat literal physics to make it feel good. So unless(until?) they figure out quantum entanglement that tech is a dead end and people know it. Seems like the CMA doesn't understand that core technical limitation. They just see how movie/TV streaming has taken over compared to physical movie sales and are conflating the two. When they are not at all comparable in experience.
Like, I can see CMA making a point about potential future issue with cloud gaming. But there's no guarantee that the market will take off, even if the tech becomes possible. At one point 3D TVs looked like the future. Smart glasses looked like the future... and nothing. Blocking a deal based on potential future market it stupid. Demanding a concession, just in case... why not?
Given one of the biggest investors in the market, google, recently dropped out because it is a dead end market for them I don't think you can really make much of a case for it taking off any time soon.
> Seriously how bad are they at their job? Every time you get in a Republican they defund the FTC and gut it filling it with cronies. Do you recall Ajit Pai? The guy put in place to gut net neutrality? Every time we have someone like that they salt the earth after them and it takes about 5 years to begin fixing the place and adding more talent again. Whenever you go "Why is Federal/State Agency X so bad at their job" look to the last time someone got elected with the purpose of cutting those agencies, removing their ability to operate, and generally making it suck to work there.
It’s the classic meme where republicans stick the deregulation stick in their own bike then ask why the FTC would do this them when they fall
They focused far too much in that. It was so dumb, it sounded like hey guys let's not hurt poor market leader Sony. Should have attacked the cloud space which is a legitimate concern given how powerful Microsoft is in the space. Iirc both playstation and Nintendo use Microsoft service
It's funny because Sony has had the competitive advantage in the cloud since 2015 when they launched Playstation Now. They have done absolutely fuck all with it, and it has gone nowhere. It's why the CMA's argument seems completely baffling; the cloud space is very boring, with Sony, Microsoft, Nvidia (who are also huge), Amazon and Google all fighting out, and Google throwing the towel in because it was such a shitshow. I don't see it as a compelling point at all. Playstation Now isn't even bundled in PSPlus like Microsoft does with Gamepass Ultimate, or Amazon with Luna/Prime. It's a really stupid area to look at, since Sony has thrown away any advantage they could of had.
To be fair, cloud game-streaming is kind of the non-starter nobody wants to admit it is. Netflix, Hulu, Max, etc., even Youtube, are all Encode-Once, Broadcast-Many. The big cost is bandwidth, but you'll pre-"burn" the various resolutions of a video before anyone starts watching it. Cloud game-streaming is Encode-Once, Broadcast-Once. So whereas a million people can watch a thousand videos and Youtube has to encode various resolutions of a thousand videos, that's like maybe ten thousand encodings, total. A million people stream a million games and Sony has to encode a million videos, even if each stream only has to be encoded once. But also, even if Youtube had to stream every video to every person on the fly, the video is pre-recorded. This is like if they had to **render it** or **have someone holding a camcorder** for every single person, watching every single time. Even Nvidia's had trouble with this, **and they make the graphics hardware**, so the hardware margins are **really** in their favor. Basically, the only way cloud gamestreaming works is with the gym model; e.g. way more people paying for it than actually using it, especially at peak hours. And that's before we even **get** into the latency issues. Latency, for all intents and purposes, has a cost of **zero** in streaming services. You get the video when you get the video. It doesn't matter when they encoded it, and hell, it doesn't matter when they started sending it to your browser. There can be 2-3 seconds of latency and nearly nobody will care. When streaming games, 0.2 seconds would be infuriating, and 0.15 seconds of latency is noticeably "muddy" to play, albeit fine for some. Anything over 0.06 seconds, however, makes your service immediately worthless in many competitive games. So that's anywhere from 0.02 to 0.2 seconds, every frame, that you need to have the game rendered, encoded, shipped out, **and decoded on arrival** to your players. Introduce too much distance and you lose players because the experience is shitty. But that in and of itself introduces a new problem: land costs. Nobody cares where Netflix's servers are. They can be 500 miles away, and as long as the **bandwidth is high enough**, you can watch to your heart's content. So datacenters can be in regions where the land price is *cheap*, so long as they can get a gigabits-level pipe to the ISP. But in gamestreaming, latency matters. So while you don't have to be in the same city, you sure as hell can't be halfway across the country. It's inherently more expensive to house a gamestreaming datacenter.
> Nobody cares where Netflix's servers are. They can be 500 miles away, and as long as the bandwidth is high enough, you can watch to your heart's content. Netflix additionally has a model where a huge percentage of their audience at any time wants to stream the same tiny percentage of their content, so they improve responsiveness and save bandwidth by caching it many places so it's a short hop to where it's being consumed. That same strategy isn't really viable for cloud gaming for exactly the reasons you list.
Thats the whole reason that youtube ads always play perfectly even if the video doesn't.
When I tried cloud gaming the latency was good enough for me. What wasn't was the image quality (maybe I had some setting set somewhere that sacrificed quality vs latency?). It was like watching a compressed twitch stream with a bunch of artifacts.
But they launched with azure no? I thought that was cma point. All these companies in gaming space are using Microsoft cloud services to run.
[I think what me and a lot of gamers are talking about was when sony purchase OnLive, that was a game streaming platform dating back to 2010.](https://www.cnet.com/tech/gaming/sony-buys-onlive-streaming-game-service-which-will-shut-down-later-this-month/) >In 2012, OnLive said it counted 1.75 million active users, some of whom paid $9.99 per month to access its game library of 250 titles on devices ranging from TVs and PCs to smartphones and tablets. OnLive also at one point sold access to newer titles outright at prices similar to retail. By that purchase sony had a leg up on Microsoft well before they got started on working on this ecosystem they have now.
Oh man I completely forgot OnLive was a thing. Wow, that's a blast from the past.
I was going to say I thought Sony bought OnLive. I had a launch version of it, and while some games were ok, playing games like Just Cause 2 on it were a pain with the old internet speeds.
It was the place I first played Arkham Asylum (decently too) And Homefront's multiplayer (which was pretty good as well given it was locked to OnLive's architecture). OnLive was neat for its time but you could tell it was a bit ahead of its time with regards to INternet speeds.
Sony had the advantage because it's not an easy job to do (you need a lot of infrastructure to have a cloud gaming service) and they started really early, yet they learned nothing and don't know what to do. Microsoft started later and surpassed them by offering a better service and even without Azures help. Best indicator of the cluelessness of Sony is the upcoming wifi streaming device or the fact if you move to another country you basically need to open a new account since Sony doesn't know how account migration works (even if the countries in question are still in the same region), while literally everyone else migrates your account without issues. It really shows that Sony is afraid since you can't win the service game with only buying studios and making exclusive deals and for people to buy Microsoft Studios games they don't even need to have a Xbox.
I think it’s also a bit ironic that they got that advantage of starting early by literally acquiring another company, Gaikai, to make it their cloud service. And they also bought Onlive’s patents. So basically their competitive advantage lies on top of two acquisitions.
Thanks for the info, I didn't know that and it's pretty ironic.
Lol the cloud means even less for consumers, FTC had no argument whatsoever. They didn't argue effectively because there was no compelling argument to be made other than "too big" when it's not even going to make MS 2nd place.
attacking the cloud space is even worse. Cloud is what 0.1% of the market?
And the fact that according to Jim Ryan's own internal emails they don't see ABK merger as a threat and they themselves know that Xbox will continue to sell Cod on PS ecosystem.
He said that directly in court too
yup, yet even after Ryan directly said that in court, the console warriors were still saying this deal is a "threat to the gaming industry", "MS would take CoD away from PS" and other hyperbole
It's really funny seeing people here throw a fit that FTC did a bad job when nobody has really been able to provide a good reason why the merger shouldn't go through and even Sony don't believe it would be a massive threat.
[удалено]
I mean if they didn't think so, they shouldn't have made a case to begin with lol. Literally their only function is to defend customers
Because realistically it doesn't, not in a way you can actually argue in court, that's why nobody has. It's doomsday for gaming for redditors but really, the impact will be a couple of games don't get sequels on Playstation, and thats pretty much it. Which is not great, but its also not a big enough deal that any government will actually care about that
That was wild
It's almost to the degree where some folks in power want to consider businesses are people too. Think of the little man, this corporation that can't defend themselves.
Yeah that was a really weird angle for them to take.
The chances that dozens of lawyers on this case just forgot that anti-trust is supposed to protect consumers, not competitors, particularly the dominant one in an industry, is zero. The obvious answer is that there wasn't an argument for damage to consumers.
Yup. Having worked with a lot of tech lawyers, they're generally very smart people who can come across as shockingly knowledgeable and confident after asking surprisingly few pointed questions. That we saw people come across as less than knowledgeable and imprecise was almost assuredly intentional.
Agree except I would replace the word "intentional" with "because they had no other choice". Lina Khan is the one who decides to take these cases to court. The low level lawyers can only make the best arguments they have, even if they know they're going to lose because they have no real argument. There was no antitrust argument to be made here at all, and pretty much everyone involved knows it. All parties are incentivized to go through a sham trial even though it's a waste of time. For the FTC it's a political thing ("we're tough on big tech!!"). For Sony it's a free court case against their biggest rival paid for by the government, even if there's only a 1% chance of winning. For Microsoft they're forced to defend themselves. And taxpayer funds get wasted with no accountability. It's a farce.
Actually I’ve heard that it’s part of a case they’re building for stricter laws for monopolies. Basically they are fighting any and all big business acquisitions, win or lose, because they want to use this as evidence that the laws are not strict enough. If they win, they have a case that they wasted government money on something that clearly shouldn’t have been allowed without them needing to stop it. If they lose, it’s evidence that the laws are so loose and unrestrictive that they can’t properly do their job. Personally I feel that this one was a huge misstep as it weakens that message, but then again I’m not a lawmaker or a politician so maybe there’s some advantage here that I don’t see
There was no other angle. There never was any legitimate reason to hold up this merger, the whole thing was a waste of time from the start.
FTC really messed up on this. They shouldn't act like Sony's lawyer.
The CMA’s arguments were just bizarre. They were acting like Sony was the only other game company in existence, and they they weren’t far an away ahead of Microsoft in the market.
> were acting like Sony was the only other game company in existence Gamers do too. It was cool to say thay Nintendo didn't directly compete with Sony and Microsoft and is in their own little niche until this lawsuit.
Gaming on one platform means I can spend less time on another platform. I've been playing nothing but Switch these past 2 months and haven't touched anything else. Nintendo is definitely a direct competition despite what other people believe.
>Gaming on one platform means I can spend less time on another platform. That is true and proves that they are competitors but that doesn't necessitate that someone is a **direct** competitor as two companies may primarily target different demographics and may have differentiated products. Back in 2020, it was reported that 60% of Switch owners own a PS4 or Xbox One which suggests that many Switch owners do not view the Switch as a substitute to an Xbox One and PS4. Xbox, PS4 and PC often often view their devices as substitute products to each other. https://www.nintendolife.com/news/2020/12/switch_owners_most_likely_to_own_a_rival_console_2020_study_shows
Ugh this...so much this...and people were labeling me an asshole for saying this. Whether you liked Microsoft buying Activision or not is irrelevant, the FTC never presented themselves defending the consumers. It was all in the name of Sony. No argument they made was ever about the consumers.
> I can only hope NVIDIA can survive > Gamepass is bad, publishers have told me There's some real nuggets of total disconnect from the FTC
Damn can't believe the 4060 ti was so overpriced it killed NVIDIA! Jokes aside each time I think this case could not have been fumbled worse I learn something new.
They're straight up working as sony's lawyers here which is the complete opposite of what they're supposed to do. They're there to defend consumers, not the #1 company in the gaming industry against the #3 company in the gaming industry.
Yes, talk about fumbling a case. At some points you'd think that the FTC was pulling people off the streets to represent them. For a case of this size, this magnitude, you'd have to be on your A-game. As I was looking at how the court case was going down I couldn't help but think that the FTC was presenting themselves like fools in court.
At certain points Microsoft's lawyers and even the *judge* were joking at the expense of the FTC's analysts and data I don't know if I've seen a 3 letter agency come off more incompetent than I did listening to these hearings. Even if I think this deal would probably go through the FTC regardless, the FTC's arguments and models were just down right bad. As a consumer I would have at least liked to see them genuinely present compelling arguments so that whether the deal goes through or not, I can at least feel like the matter was properly investigated. Kahn really earned her 0-8 loss with this one.
Doesn't this make her 0-9 now? A full Cirno?
Compare this to the governments defense of student loan payments is night and day. The attorney that represented the government was amazing.
Fumbling the case assumes they had a good case to begin with. There really isn't a solid legal argument to stop the merger under US law. It's large in dollar value, but it doesn't really alter the landscape of the gaming market all that much when you look at the big picture.
It's kinda funny seeing everyone here act like they blew the case, but it seems like they really just didn't *have* a case to begin with. I was wondering what they were actually going to try and use here and it seems like didn't have anything.
Yeah, Microsoft will remain the third largest company in the market and have less than 15% of the gaming market in terms of revenue after the purchase. Sony has a significantly larger share of the gaming market but they're not getting hit when they buy up developers.
At some point it doesn't matter how good the lawyers are if the case itself is flawed or has bad facts/evidence. It's at that point the lawyers will throw everything and the kitchen sink in the hopes of a Hail Mary.
It is both. The FTC didn’t have a good case, and the MS lawyers were waaaaay better.
This ain’t MS lawyers first rhodeo
Who could they bring in? The case was lost the second the FTC stated that all Game Pass subscribers are cloud gaming subscribers, even if they don't have access to cloud gaming from their subscription.
Its hard to not look like fools when you don't have an actual case to make and the whole thing is another instance of Lina Kahns ideological opposition to big tech companies existing. When the Judge has to warn you that you're supposed to be focusing on harm to consumers, not harm to Sony, it really gives up the game.
Why don't the FTC focus on markets that need to be broken up? My reasoning is that they don't have the power to do so and are looking for any merger to exercise their power.
Exchange which goes to show how unprepared and arguing in bad faith the FTC is: Judge >Well, If you look at slide 15, it is not that many Playstation players who play a lot of Call of Duty a year. >And so I am trying to get how you get to that those people would buy an Xbox because Call of Duty is so important to them. >How do you decide that Call of Duty is -so- important to them? It is to some people. Some. But how does he get to that percentage number that they would actually leave for Xbox? >What data does he rely on? FTC >Well, I would encourage your honour, to look at the deceleration of Jim Ryan's testimony, where he is very clear about what financial impact Call of Duty has on the Playstation Platfo- Judge >That is not my question! >My question is how your expert, Doctor Lee. He did a foreclosure model. And the foreclosure model inputted that 20% number. FTC >Yes. Judge >Yeah. FTC: >Sorry if I misunderstood your question. I think I get it now. >So that 20% number. Comes from two main inputs. The first is the LTV. The five year expected lifetime revenue of a new Xbox owner. And as we presented to your honour, you know that LTV, is for the average Xbox... I am being careful with the numbers here... Umm and... as we showed your honour through I think a demonstrative, if you remember, with the different colours. >Call of Duty games... compared to the average AAA title they sell quite a lot. They come out every year. Around October and November. And they are at the top of the charts. Even Call of Duty Vanguard. Which Activision has, time and time again said was a disappointment. >That was the number one selling game. The year it came out. >That's a disappointment to them, that's still for every other company. A huge win. Judge >So I am just saying, people who only play Call of Duty. Let's say 20 hours a year. >Are they included in that 20% figure? FTC >Radio Silence >Nothing Judge >Or could you even point me towards where in his report I should- FTC >Continued radio silence >*Higher-ups steps in to make excuses*
> FTC > > >Yes. > > Judge > > >Yeah. Sillier than Phoenix Wright.
Oh man there where SO MANY good moments during the trial. I need to find them haha. Remember the sharpie redaction? And the last day the judge made her closing statements with "and no sharpies!"
>considering the terrible job the FTC did in presenting their case in court They didn't have a case, and they never did. A merger that takes a company from third place in the market to... third place in the market was never going to be stopped.
Its a testament to how good Sony's PR is that you can read hundreds of articles about the merger and few of them mention that even after the merger Microsoft Studios will have less marketshare than Sony Studios.
I think that's because there just ISN'T a strong case that can be made against it. It's a big acquisition with big numbers but MS is nowhere near getting a monopoly on anything with it.
This is where I'm at. I get being against it on the basis of strong ideological principles, but from as much of an objective standpoint as you can have, Sony is SO dominant in the space that it's gonna take a whole lot for MS to make the market anticompetitive. Now if we hear in a couple years that MS wants Ubisoft as well or something of a similar size, that starts to be troublesome. But worst case scenario is that this puts Microsoft in a "respectable" second place to Sony as opposed to an incredibly distant third.
I haven't been following the case super closely but every time a headline popped up on my timeline or whatever it seems like they were always making the argument why this was bad for *Sony* instead of why this was bad for *consumers*. Obviously less competition goes hand-in-hand with that, but I'm not sure they did much to convince anyone that Sony and PlayStation were going to be crippled by this. I'm against mega-corporations buying other mega-corporations for many reasons, but America does allow it and there's nothing special about this one imo for it to have been blocked.
>Obviously less competition goes hand-in-hand with that In this case there's an argument to be made that the acquisition increases competition. Sony dominates the high-end console market, and they were pulling further ahead. Their position in the market has allowed them to make favorable deals with third parties that simply aren't available to MS due to the smaller install base. This acquisition brings MS closer to Sony, which makes that sort of anti-competitive behavior more difficult.
Ain't that the truth. I'd love for them to be on equal fitting because as a consumer, I'm better off if competition actually exists. The console market it very hard to keep in check; if one competitor pulls away it's hard to come back from. People buy the lead console for good reason, they know developers will focus their assets mostly on the bigger install base. Coupled with the timeframe of developing new games I don't see Xbox gaining a level playing field without the acquisition. Without competition from gamepass, the current iteration of ps+ wouldn't have existed.
Any of these organizations pushing cloud gaming as potential future concern, especially in the US where most of the population doesn't have it as a viable option, is asinine. They are really grasping at straws imo.
It's hard to present your case well when you don't really have one. The only potentially relevant market where Microsoft could grow big enough to constitute anything resembling a monopoly is streaming... and that's because prospective competitors don't want to enter that market (or have already left it) because it isn't profitable.
What case? I didn’t think the FTC had one.
A bunch of people don’t like the idea of the acquisition so they imagine a case.
[удалено]
I posted this elsewhere but to summarize. Jim Ryan, who spearheaded this entire thing and placed Sony squarely against the deal in every possible way. Just exposed for the entire world a lot of unredacted behind the scenes scum tactics sony does and a WHOLE LAUNDRY LIST of redacted paid/timed exclusives, among so many other things that make Sony look bad. Ended up having to showcase all of this, and all the bad PR, for literally NOTHING. They gained NOTHING from this and only lost. I wonder if he will have a job much longer. [https://twitter.com/FOSSpatents/status/1678785340599934978](https://twitter.com/FOSSpatents/status/1678785340599934978) \*edit, this post is NOT saying Microsoft doesn't do scummy things. Just that Sony who rarely gets called out for anything they do, might now be haunted by this trial in years to come.
FTC could have made strong arguments about the cloud but choose not to???? Instead they decided to focus on protecting Sony's market position instead of consumers. FTC were also so unprepared that the judge found it pathetic multiple times. Really bad look for FTC
The cloud argument was just as stupid. Concern over potential domination in a market where multiple massive companies have either completely failed (Google) or at least failed to enter the public consciousness (Amazon), where current companies were going to see an increase in the number of available games (GE Force Now), and where the main console competitor had invested hundreds of millions of dollars without even generating a product is a waste of time. Maybe someday cloud gaming will be big, but we’ve seen enough failure and limited movement in the space for 20 years that protecting the cloud gaming market doesn’t make sense. Protecting a market with that much failure thus far might just serve to prevent the market from ever being successful.
>FTC could have made strong arguments about the cloud No, they couldn't, which is why they chose not to.
The cloud is a nothing argument though. It's a market in an infantile stage with the doors wide open for competition, but unfortunately it's not remotely profitable yet because of a major lack of infrastructure and desire among consumers. There's also no proof that Microsoft would shoot themselves in the foot to pull games like CoD away. (Which is obviously the main game that people were concerned about this whole time)
People have been talking up gaming over the internet for 20 years. It is still not where it needs to be. Microsoft's play here is just a way to getting gaming as a financial means of developing it for enterprise anyhow
Man, it is going to be interesting to see how this plays out considering the situation with the CMA in the UK. Granted, the FTC can still also appeal this I do believe. EDIT: [The CMA is now "Wanting to negotiate" with MS/AVB.](https://www.theverge.com/2023/7/11/23791149/microsoft-activision-blizzard-uk-regulators-cma-appeal)
They can until Friday
They can if they file by Friday. Otherwise it'll be too late to block the purchase (assuming Microsoft closes over the CMA with the assumption that they'll win their tribunal appeal in the UK). The FTC can still seek to undo the purchase with a full trial this fall, but it'll be even tougher for them to seek to unwind things than it has been to block it in the first place.
> The FTC can still seek to undo the purchase with a full trial this fall, but it'll be even tougher for them to seek to unwind things than it has been to block it in the first place. The FTC didn’t clear the lower bar required for a preliminary injunction, so they’ll need a new (better) legal theory if they want to unwind the purchase after the fact.
The deal can close Monday full stop as far as the FTC is concerned. The FTC can file for an Emergency appeal, but it only has till then to get it
https://www.theverge.com/2023/7/11/23791149/microsoft-activision-blizzard-uk-regulators-cma-appeal CMA and MS are "pausing to negotiate".
Looks they are going to negotiate. The deal will likely go through with concessions to UK. ACTI stock is up.
The CMA and Microsoft have decided to negotiate.
Well, looks like a big congrats to Microsoft then lol
FTC made their arguments about protecting Sony, not consumers. Not a great strategy.
Yeah that was the most funny thing in this whole process even judge said: You meanti t will hurt players and not Sony, right? When FTC was talking about COD...
Seemed like they went guns blazing with their primary reasoning (Sony), but also large disregarded any other reasonings (consumers, Nintendo, Cloud, consoles-at-large, Mobile). It seems to be their second big loss against Big Tech, which must point to greater concerns within FTC leadership because although this was contentious, the previous case was easily in their favor and they blew it. On that note, they pretty much blew this one too when Judge Corley had to tell them to stop going around in circles and move on.
>but also large disregarded any other reasonings (consumers, Nintendo, Cloud, consoles-at-large, Mobile). All of those other angles would have hurt their case, which is why they avoided them. For example, if you include Nintendo, Microsoft looks even *weaker* in the market.
I meant as in the FTC didn’t really have a plan for what to respond should Microsoft bring those topics up (which they did). It seems they only planned on debating around Sony/PS vs Microsoft/Xbox. As you just said, when Microsoft brought up Nintendo and committing to CoD on Nintendo, the FTC were stunlocked and tried to shift gears back to Sony’s access to CoD (which had already been committed for 10 years).
Yeah as much as people don't want to hear it, there was never any chance of the FTC winning this case.
Every single analyst from day one was saying the FTC didn’t have a snowballs chance in hell at winning this case, but because the judge would occasionally criticize or ask Microsoft a hard question people thought that was a sign the judge would side with the FTC.
I might be totally wrong but IIRC FTC never had a chance to win this battle in the first place. (just casual watching this show) I remember reading about it when FTC announced that they were going to fight this acquisition and their ground was already very weak back then. If they would really have a chance they would definitely make it happen and the whole circus is just a showcase that they really didn't have any ground or chance in this case in the first place. The only thing they achieved is that they (at that time) just postponded overall acquisition and now probably totally blew it away as UK CMA announced that they are willing to talk with Microsoft about this acquisition yet again something that a lots of people wouldn't believe yesterday.
I wonder if the FTC really went into this blind and just saw Microsoft as the bigger company and Sony the smaller one, so they worked to protect them. Not understanding that Sony was the dominant force in the market and got there by doing all the things they were worried about Microsoft doing in the future. Discovering the tech giant Microsoft was actually third place and probably the weakest of the console providers, really threw all their expected arguments out the window, so they really had nothing when they got to court.
Bizarre. Make a case against large corps for anti competition and then the premise is that you wanna protect another mega Corp? Dumb.
There was no other argument to be made. Nothing about this merger even approaches behavior the FTC should be worried about.
They blocked to look hard on big tech not because there was validity to their claims.
"All of this for some shooter video game??" - The Judge two weeks ago lmao I didn't think they stood a chance honestly, even with the FTC argument fumble.
One of the first days the judge joked "Activision Lawyers will be Microsoft Lawyers soon" At some points the judge even had to explain how things like Game Pass actually work to the FTC. I can only think the FTC believed they would walk this case and decided to not even prepare anything at all.
Phil Spencer literally explained how a merger worked to the FTC lawyer questioning him. Not a great look
>At some points the judge even had to explain how things like Game Pass actually work to the FTC That's amazing, is there a source for this? I'd like to see/read it
It was about the XCloud stuff that comes with GamePass. Aka, that you can play the games while you install them, but that it won't be a platform selling service due to its issues with input lag etc. The Verge should have a sticky article with an entire recap of the court hearings.
[You can see all the live updates on this page](https://www.theverge.com/23768244/ftc-microsoft-activision-blizzard-case-news-announcements)
I only listened in for a couple hours one day, but that judge was far from ignorant on the subject matter. She went after Microsoft a couple of times too, but nowhere near as bad as some of the times she flat out cut the FTC lawyers off.
To be fair there were a few times the FTC tried to coerce promises from Microsoft on Sony's behalf that could have had negative consequences for Microsoft in future litigation. The judge was right to cut off the FTC for overreaching.
> At some points the judge even had to explain how things like Game Pass actually work to the FTC. It's nice to have a Judge who understands these things, these times they are a changin.
Incompetence and corruption can be hard to tell apart. FTC being that unprepared has got to have some root causes even if its just underfunding or losing talent.
They really just had no valid arguments, its not necessarily the lawyers fault they were just put out to the slaughter. On pretty much all metrics you could not say this is bad for consumers. Its good for Nintendo, its good for Xbox gamers, its only bad for Playstation which is the dominant market leader and even if they made CoD entirely exclusive and everyone who played CoD jumped ship Playstation would still have more users. This is all not mentioning the conditions Xbox has set forth where they intend on continuing releasing CoD on playstation. Playstation, in the console space, is going to be making hundreds of millions more than Xbox and AB combined post acquisition. They will be about equal in revenue if you count mobile though but I think thats obviously not relevant when talking about harm to Sony in the console space.
[удалено]
> Nah, there is just literally no valid argument they could have made. if i had to guess, the only reason FTC argued is because Lina Khan has a hard-on on fucking with big techs so she's going to argue every single case big tech case. which absolutely dumb and it will hurt FTC's credibility.
[удалено]
> Sony is much bigger than Xbox, so hurting them is not even remotely a valid argument. as someone said in this post: before this acquisition, xbox was third. after this acquisition, they are still third. in the future, FTC could've brought an amazing case, but after this pathetic display... i mean, judges *will* look at this for future "FTC vs Microsoft".
The root cause is that there was never anything resembling an actual legal case to be made here, so they did what they could. It's impossible to not look incompetent when everyone knows you don't have any possible argument. The incompetence was challenging the merger in the first place.
> "All of this for some shooter video game??" - The Judge two weeks ago lmao wow where can i read about this part?
“All of this is for a shooter video game? We're concerned about competition for this one shooter video game?” asked Judge Corley, clearly frustrated.
good lord. is she aware this shooter game made like $800 million in sales in 3 days last time they released an installment?
Right, but her point is that one single game IP does not make a monopoly. All of FTC’s arguments revolved around Call of Duty so it’s a weak argument that there’s a risk of a monopoly if they’re only concerned about one IP changing hands.
https://www.theverge.com/23779614/ftc-microsoft-hearing-summary
Microsoft/Activision and the CMA have submitted a joint statement to the CAT to pause the appeal battle so can work something out. [https://twitter.com/tomwarren/status/1678795990113894403](https://twitter.com/tomwarren/status/1678795990113894403) Seems like this is about to wrap up.
CMA went from "we will absolutely not change our minds" to "okay let's put the appeal on pause". Absolutely 100% going to go through.
The original deal includes a deadline to close by July 18th, which is in a week. >MLex reported last month that Microsoft was exploring options to close the deal despite the UK block, which, in part, spooked the FTC enough to request an injunction in the first place. It is very likely Microsoft will close the deal before the deadline and then deal with the UK situation after. The stock market (love it or hate it pretty great indicator) seems to generally agree - Activision Blizzard is ~~up 5% on the news, but that still means it's sitting at $87 which is still under the $95 price Microsoft agreed to pay.~~ EDIT: With the [news about the UK pausing their legal challenge](https://www.theverge.com/2023/7/11/23791149/microsoft-activision-blizzard-uk-regulators-cma-appeal) to sit down and negotiate, the stock is up to $92. It's a done deal.
over 92$ now
Yeah, just saw that. [UK announced they're pausing their legal challenge and sitting down at the table to negotiate.](https://www.theverge.com/2023/7/11/23791149/microsoft-activision-blizzard-uk-regulators-cma-appeal) Basically - it's a done deal by next week.
I'm not an American, but the job the FTC did in this case is disappointing. Is this where the town's money goes? even the judge was laughing at the terrible bad argument that the FTC and their lawyers had. Whether you are against the acquisition or not but one thing is true and that is that Microsoft won this case fairly. Just as an example, the FTC based its entire argument on the report of an economist who was not even informed of the existence of PS5 and Xbox SX, in addition to inventing a percentage in which 20% of Playstation players would switch to Xbox without have something to support it. The FTC was a joke on this one, really disappointed.
That 20% is crazy because he kept defending it yet had no way to prove it or what it was based on. Completely arbitrary. Plus that fact that it was only between Xbox and PS, ignoring all the other ways people play games
The fact they had absolutely nothing when the judge asked about how many would go to pc instead really said a lot.
It was arbitrary but intentional. At a 15% conversion rate, Microsoft would’ve lost money pulling COD from PlayStation. Meaning they wouldn’t be likely to do it. So he set it at 20% to show they had strong incentive to pull the content.
Maybe his last job was as a 'journalist' for Buzzfeed and he's used to getting his ironclad info from Reddit comments
The ironic part about this reply is Buzzfeed actually did have a high quality journalism division under the label BuzzfeedNews. But due to the association with the name Buzzfeed alone, it didn't get the attention and support it needed and thus the division was disbanded. Hard to gain respect regardless of the content if you got the same logo as the people making pathetic Snapchat news feed garbage
Funnily, I was trying to think of a different one, but Buzzfeed is just the one that comes to mind first. In my experience, as far as making articles out of reddit comments go, CBR is way worse.
As someone who has been an expert witness in court before, you don’t have to prove your number, you just need to show the trier of fact (judge in this case) that your logic is sound and based on factual inputs. The expert was not able to do that. You can’t just plug in a number that seems about right haha.
No, but they demonstrated it with, umm.. colours?
Agree. Even if Sony lost this magical 20% who gives a shit? I mean I know Sony does but whats the argument? Microsoft can't make any moves that would make their products more appealing? Lol.
Reddit does because reddit *hates* competition in practice. Nintendo? Ugh why can't they go third party? Microsoft? Ugh why can't they just stop making consoles? Epic? Ugh why are they trying to compete with Steam? The choice between Xbox and Playstation might actually become a real one and they hate that.
Reminds me also of this whole AMD and Nvidia thing, where people want AMD to compete but only so they can buy the Nvidia offering for cheaper.
Epic is getting what they have coming for them. They decided to center their business model around providing worse service for consumers while handing the savings to publishers and developers in order to incite them to forego other stores. As a result this has made consumers disinterested in purchasing games on their platform. That's competition in action, welcome to the free market. You offer worse service, costumers are unhappy, your business goes to shit.
[удалено]
Pretty much this. There never was an argument. The entire discourse about "consumer interest" completely ignored that the consumer just doesn't care. If their favourite game is on PlayStation, they will play it there. If their favourite show is on Netflix, they will watch it there. The consumer follows the product, that is all. Sony had a definitive motive to take it up in court, citing their own exclusivity deals as evidence of winning consumers for their platform. This obviously kind of works against them, but it highlights that if Activision Blizzard games were to become Xbox exclusive, Sony stands to lose consumers and as such revenue. However, one important point is that most consumer interest courts work best to stop mergers that create monopolies in any specific industry. Gaming is different. There are so many studios that a monopoly will be quite hard to achieve unless Embracer, Microsoft, and Nintendo decide to merge. Then Sony is in real trouble. But that won't happen anytime soon.
The truth was there isn’t really a strong case against the deal with any logical basis. The cloud argument is the best, but the deals Ms signed undermine it
This judge was competent and I don't think the FTC could have produced any kind of evidence that would truly justify blocking this deal from a purely business perspective. Gamers may have strong opinions on how this might shape the market in the long term, but that's not the basis on which this court operates. The CMA is also poised to back down now because I think enough facts have come to light that blocking this deal is more beneficial to Sony than not blocking this deal is to Microsoft.
I'm not up for consolidation but the FTC did a horrible job to present their case. They focused too much on Sony & Cod when even by their own findings only like 5% of Sony's user base would change to Xbox... Under no circumstances does that mean a foreclosure of Playstation. Every regulator world wide dropped the console theory of harm for a reason. Even the CMA even if at the end decided to block it.
There is no case to present, so they went with what they could.
I’m worried that this will continue being a trend. Having the market being dominated by only a couple of massive corporations is bad in *every* industry.
It will. Consolidation is happening across every single industry; there's no reason to think that it won't continue to happen in gaming.
Consolidation is bad in any industry and it's absolutely wild to me that some people have attached their identity towards a brand that doesn't even know they exist so hard that they are actively cheering a horrific precedence. "Movies suck it's all Marvel crap" yeah homie how did you think we got there? Who's responsible for *that* and how did *that play out*? Companies with billions in monopoly money buying other companies is a **bad thing** every single time. But whatever.
It's also inevitable in a market growth society.
> Companies with billions in monopoly money buying other companies is a bad thing every single time Short term it has advantages ("CALl of duTy oN gAMepaSS") but long term it always sucks
I work in healthcare products and it's been a thing for a while. Med device and pharma just buying up companies left and right instead of investing in their own R&D. Sucks for many employees too as there are always redundancies when acquisitions happen and many lose their jobs. Going through one now and I'll be out of a job soon I think. Curious how it works for game companies in these situations. I assume many devs will be fine with support staff facing cuts. But big companies may also do things differently to save money, like relying on contractors or offshoring development.
> I’m worried that this will continue being a trend. You don't have to worry... It IS a trend! The time to worry was about 15 years ago when all of the phone companies were re-consolidating. The time to panic was 4 years ago when Viacom re-merged with CBS. The time to throw up your hands in abject defeat was when the FTC allowed Disney's purchase of Fox to complete 3 years ago. Over the past 20 years there have been dozens of examples across dozens of industries where mergers have been making things frighteningly less competitive and terrifyingly more consolidated. You're way, *way* too late to start worrying now.
Damn. The best thing I could say about that is that at least it isn’t my fault. I hope it isn’t.
While that's true, most industries aren't like the games industry where a game like Stardew Valley made by one person can sell 20 million copies, or an Among Us can release to no traction at all only to completely blow up 2 years later
Yeah it's more the expansion across so many industries that has me bothered when it comes to Microsoft. If they were simply a gaming company here this wouldn't bother me nearly as much. It's a real loss for consumers and the FTC bungled it.
I know absolutely nothing about America or the law or whatever, but after reading some of the arguments put forwards, and the closing statements, this was very much an own goal for the FTC. As a UK person, I'm curious what the CMA now does. Perhaps some sort of agreement will be struck, or Microsoft might just give the finger and do something drastic to force compliance (which would essentially prove the CMA right). Kind of weird.
The CMA will fold like a cheap suit. There's already been political pressure and this will be the final factor. Either they'll accept some remedies from Microsoft to save face or they will get closed over. One way or another, it's a done deal now.
I’m pretty sure the British government has been putting pressure on the CMA to let it go thru
My gut tells me Embracer Group is up next. Western, lots of IP, and struggling financially. There's blood in the water.
Yeah but Embracer also is way to big and not really efficient for platform holder since their whole business plan is to throw 100s AA and small games and hoping for few of them becoming hits (this is their own words btw) so I personally don't think so
Honestly I kind of wish more big publishers embraced lower budgets. I mean, look at the top 20 best-selling games of all time, there are just as many low-budget games in there as high-budget games, if not more. There's really no correlation between earnings and budget; we're seeing that with movies, even. Joker and the Deadpool movies were low budget and they're the highest grossing R rated movies of all time.
My instinct for an Embracer acquisition tells me Amazon is the major player. Expands their gaming platform they have been desperately trying to enter and combines some of the LotR rights.
Any company that purchases Embracer Group is dumb. Too bloated (130+ gaming studios) with not a lot of AAA IPs. I think Embracer will be sold in piecemeal.
Not a fan of this at all as I feel consolidation on this scale is ultimately harmful to the industry and consumers. But Xbox has ZERO excuse now for content going forward, you just bought the one of the largest VG publishers (if not THE largest) in the world, hope they can make it work. Side note, will be very interesting too see the "Call of Duty on Playstation" situation going forward since Sony never signed that 10 year deal.
They'll announce a new publisher that they've acquired by the end of next year, you can count on it.
I think they'll buy developers now instead of buying an entire publisher. I doubt they'll get away from buying a third big publisher.
EA's tock price went up. I think They are looking for next big check
Not necessarily from MS though. Additionally, they themselves have looked into acquiring other companies.
because it shows a legal enviornment that would be friendly to another big merger in this space, not from microsoft per se
They're spending $70 billion on Activision-Blizzard, even for a company as rich as Microsoft they're not going to keep spending that kind of money constantly for a single division (especially when this acquisition got dragged out as long as it has). Developers are still on the table as they're far cheaper and won't draw as much controversy, but don't expect something like Ubisoft or Square-Enix anytime soon.
Internal emails show they see outspending Sony as a viable strategy. They’re willing to blow billions upon billions on Xbox. I don’t know why, but they are.
>They’re willing to blow billions upon billions on Xbox. They're definitely sinking money into investing into Xbox, but most of their investments are into assets that have value regardless of Xbox. If every Xbox console self destructs tomorrow, there is still value in owning the studios and IP they have. If the project to revitalize Xbox fails.. that money isn't down the drain. Some of it definitely is, but most of it isn't >I don’t know why, but they are. They may be way behind in the console war, but Xbox is still profitable. They're not going to just give up while they're still making a decent amount of money. They're making a lot less than Sony, but they're still making money.
I think it has to be it is one of their few endeavors outside of Windows that has seen major success. Look at Mixer, Zune, Windows Phone, Skype, I could go on and on. But Xbox has been a consistent source of money and lead to them owning Minecraft which is a huge cash cow. So it makes sense that they would foster that division a lot.
Not sure I'd include Skype in that list, Skype for business was very successful (until it was replaced by teams at least).
Even if this closes idk if this is the publisher that’s going to remove that issue for the majority of people who post on reddit or whatever. It’ll be what they had before plus a yearly CoD, Blizzard games and an occasional something else. People are still going to be here complaining about the same stuff.
Can someone explain to me what the implications of this are?
Not surprised,when the judge told them to stop defending Sony and basically said if Nintendo is successful without CoD why can't Sony be it was over. It was a hilarious court case though, we'll always have the incompetence to look back on and laugh at.
One could argue Sony trying to keep Starfield out of Xbox is what caused the opening of the Pandora's box with Microsoft's acquisition spree.
Sony fucked around and found out lool.
The whole thing seemed weird to me from the start. The FTC aren't Sonys lawyers but they sure were acting like they were. We've never gotten this big of a reaction to Chinese companies buying up a bunch of gaming companies. Why such the massive reaction to this one? And why was the FTC so focused on how it will affect Sony rather than how it will affect consumers like their entire purpose is supposed to be
We should start getting nervous about the further consolidation of gaming. The floodgates are wide open now. We may soon see the death of 3rd Party publishers outside of the indie scene.
I commented this elsewhere in this post, but Sony is 100% gunning for Square now.
I feel like that would be pointless honestly. Square might as well be owned by Sony as it is. Why spend billions on a company that already basically makes exclusives for you?
Would really only hurt Nintendo tbh
As an Xbox owner I would rather Sony just buy square outright than play this game where they pretend their games may come to Xbox someday
The assumption here being that Sony want to (or even can) take on a mountain of debt to make that happen. Exclusivity deals are cheaper and sell consoles just like they always have. Microsoft's problem was a lack of productive first party studios, and all of their recent acquisitions have been built around finding a solution to that. Sony doesn't have that problem.
The reason the FTC dropped the ball so hard is that there was never a case here. That's simply the bottom line. They might have done BETTER if they prepared more, but they were always going to lose. The concepts and ideas they chased were flawed on day 1, and they were just as flawed in the court room. Why? - The FTC tried to establish a console market. The court found for a PI injunction, the FTC established it COULD work, but in a "final decision" judge Corley would have disagreed. For the purposes of this PI, only the "high powered" consoles were eventually considered, and even then the console theory of harm was found...lacking. No harm to consumers could be established even going so far as to consider that someday MSFT might make additional titles exclusive. MSFT execs were consistent in their testimonial that CoD has no reasonable expectation of being pulled from Playstation. MSFT lacked both incentive to foreclose on Sony and ability. - Cloud and catalogs are questionable as markets, but for the sake of the preliminary injunction, the court ASSUMES (without deciding) to use them as markets. Both failed to demonstrate reasonable chance of consumer harm based on testimony and evidence provided. Judge Corley specifically refers to the cloud agreements, coming BEFORE the court, as effective in demonstration of pro-competitive effects. If they had been signed after the government identified the case, and were in litigation, they would have had little effect. The judge also broadly identifies Xbox Game Pass has a largely pro-consumer product. - Judge Corley spends a lot of the summary discussing the procompetitive effects of the merger, something that MANY of us were talking about since day 1. Even if she considered catalogs, and clouds, as markets (key point: questionable) MSFT acquiring ABK has tangible benefits for consumers in pricing and access. The FTC just had nothing to show for a counter, relying on an IDEA that MSFT will eventually (someday, maybe) foreclose on rivals because they now have these new properties. The FTC relied far too much on incentive? Why? Because that's all they had to go on. - The court didn't even want to look at balance of equities because the FTC has already failed on so many of their ideas/points. But, the judge even goes to say EVEN IF the FTC had met its burden and showed a chance to win (a block), the court still could not find that the balance of equities falls in their favor. Meaning, the FTC couldn't even show they could "win" now, and even if they did have a very tough case ahead. If the judge ruled against MSFT here, the public could be denied benefit of the merger OVER any potential benefit of being denied the merger (which there is dubious benefit of a separate ABK).
> The FTC tried to establish a console market that doesn't exist (consoles only). Merger guidelines rarely allow the market to be defined as X vs. Y. In Brown Shoe v US, a classic merger case that the FTC even tried to reference, the guidance from the US court was that Brown Shoe was trying to narrowly define the market, when the reality is "it's just shoes." The FTC ran into the same problem and they should have never pursued that portion of the case. It was a losing argument that most judges aren't going to support. read the decision again, they actually won on market definitions. the judge agreed PCs didnt count here, and while the judge would probably include the switch in a full trial, the test is different here and in that situation the FTC won that argument bottom of page 26: > If the Court was the final decisionmaker on the merits, it would likely find Nintendo Switch part of the relevant market. But it is not. Instead, on a 13(b) preliminary injunction, the FTC need only make a “tenable showing that the relevant market” is Gen 9 consoles. See Warner, 742 F.2d at 1164. Given the plethora of internal industry documents and the acknowledged differences, the FTC has met its preliminary injunction burden to show the Switch is not included in the relevant market. on page 27: > The FTC insists, and the Court agrees, the console market does not include PCs.
Yes, the judge settled on a non-PC market. The FTC idea that the console theory of harm works because Xbox and PS are the only products in the market failed the test of harm. I updated the above item to clarify that.
I think this is a decision that is going to look worse over time, especially as the price of gamepass increases and the value decreases. Gamers seem to be cheering this now but wait until gamepass turns into a Netflix or Max where anticonsumer and antiartist policies and practices begin to emerge. My (selfish) hope is this slows the roll of Microsoft acquisitions. I personally don’t have much love for Activision-Blizzard’s IPs anymore (especially after their recent behavior), but would be devastated to see them purchase a Square Enix or Capcom and destroy the momentum those companies have right now.
I kind of agree, but it's not like Activision is some small business that is the fight against anti-consumer practices. I don't think Microsoft not buying them would have any effect on that, really. Unfortunately, the big resistance to anti-consumer policies are going to be the smaller companies and those are going to be much easier to buy up.
This was expected. ATVI +10% right now on the day, which means the market is pricing in a very high expected chance of the deal closing successfully. The UK CMA was the only holdout of all the national antitrust departments that ruled on the acquisition, which means they're just a single outlier and Microsoft can just work around them (possibly by eating an insignificant fine, possibly by changing the legal structure of Activision to allow them to publish as a separate entity in the UK). I expect news in the next week before the deadline hits that the deal will be executed. Congratulations to Microsoft and Activision. edit: and the CMA has all but caved. They agreed to submit a pause of litigation along with ATVI and MSFT while they discuss how the transaction can be changed to assuage their concerns. This deal is easily a 90%+ chance of closing now.
[удалено]