You're absolutely right, there is nuance and complexity to the situation. Like most things there are pros and cons to this merger. That's why the CMA's report is so funny because they really didn't make a nuanced decision at all. It's like they oversimplified the situation to make the decision easier.
Not at all, if you have a few weeks to file a response why not use all the time you have to make it instead of rushing one out. I'd imagine it will take a while to list all the issues MS had with the CMA report plus that report was 400 pages long. Now MS also has the EC report and it's remedies to add as well.
There's no way anyone at Activision is getting anywhere close to $95 a share without the MS deal. The Activision board will do anything they can to preserve the current deal, it won't be them that kills it.
It's out of character and they come across as insecure. There was no need for any explanation about their decision, but they did so anyway. They even took EC concern and misrepresented their outlook. EC firmly state the deal is good for competition, and cloud isn't a market but CMA cherry picked the concern part, removed the context EC applied then used that as validation for their belief that the merger is a net bad with MS dictating all the rules (which is a nonsense) for gaming. EC didn't put out tweets about CMA decision from what I know, they still haven't, fact CMA are commenting on another regulatory ruling for a region they have no oversight over does come across as unprofessional.
The CMA and EC definitely have different philosophies in competition regulation. The EC sees Activision as an opportunity to grow a new market as it super-charges a successful Microsoft model that can level the playing field. We saw that Stadia failed due to lack of interesting games as well as bad latency. When you have many start-ups and other companies like Netflix or Amazon trying to get into the field, Microsoft being forced to put Call of Duty on their platforms is a huge opportunity for a diverse market that provide advantages to attract consumers. The CMA meanwhile, seems to believe in a non-observing approach where companies just naturally evolve into a market without their overview. My issue with the CMA's approach is that Activision's most profitable model is pay-to-play. They didn't add their games on Stadia nor Luna, not even Xbox Game Pass had any ABK titles. COD MW22 had the third biggest video game launch in history at $800 million dollars, and that was because of pay-to-play. When you have a bigger company than Activision that wants to provide opportunity in their subscription service, it's a very big evolution in how people play. No longer will you have to pay full price to play Call of Duty. It can be accessed through a lower budget subscription. Also, with Microsoft counting in Nintendo and cloud, no longer does Call of Duty or other ABK games require expensive hardware to play. It can now be played on phones, tablets, work PCs just through proper internet connection. I agree that with a new industry like cloud, the other competitors need a leg-up because of how high the barrier is to enter. The CMA should not punish Microsoft over successfully launching a market. It should instead seek an opportunity to grow that market. Keeping the status quo of Activision's pay-to-play model is not going to evolve cloud gaming.
Yeah, I'm kinda confused by this. Does this mean anyone (Sony/Nvidia/Amazon) can get CoD on their cloud service for free for the next decade?
If the consumer purchases the game. Not in the platform holder's streaming subs.
Who knows? I guess it depends on the cloud service.
Ah, buy to play services and not subscription services. That makes sense.
| European Commission (EC) | Competition and Markets Authority (CMA) |
Market Definitions (from Phase 2/In-Depth Review) |
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Potiential harm to competition / SLCs results |
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Relevant Customer/Competition Benefits (considering proposed remedies) |
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View on the "Cloud Remedy" proposal |
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This is great work. Good job.
Yes, that's their whole biz.
Didn't the pandemic inflate stocks in 2021 because a lot of people were at home? and gaming was one of the things that saw an uptick.
This summary is super helpful, especially in the table format.
Without seeing the full documentation it's hard to tell. I initially took Brad Smith's comments and some of the mentions in the press release as an even broader remedy package for cloud streaming vs the CMA's, but I'm not so sure about that.
Yes lol
If China and every other regulatory body approves the deal (the FTC will likely get rolled in their own court) leaving the UK as the odd one out, I do wonder how that would look from a political/optics perspective. To be honest, the CAT telling them to eliminate the cloud gaming stuff would allow them to save face by being overruled by a higher power while still appearing to look tough on "big tech."
I'm hoping for 2 years just so I can see how insanely bitter all the console warriors get.
All the people in here talking about how the CMA doesn't have unchecked power, and that there is oversight will now be arguing that every other regulatory body and the expert consensus are all wrong, and the the CMA should stick to their guns and kill the deal no matter what.
Not sure if it will be as in depth as the CMA, but the EU regulators usually announce, then release documentation later.
Yea I asked about the EC posting the full report and he said it could be months.
Heck, there was so much hype for Zoom (NASDAQ: ZM) during the early days of covid that investors were buying shares in the unrelated penny stock Zoom Technologies (NASDAQ: ZOOM) by mistake, significantly driving up its value until the SEC halted its trading.
