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This was my take - we've gone from CMA blocking with no recourse, to both structural and behavioural remedies being considered. That's a far better outcome than I expected, and in line with what we were expecting from the EC. So it just depends what MS/AB is willing to give up and how well they can negotiate.
UK antitrust authority is fine with Microsoft acquiring Candy Crush, and even for Call of Duty does not rule out 'access remedies': major progress since previous statements
The Competition & Markets Authority (CMA) of the United Kingdom has just announced its provisional findings according to which ( summary (...www.fosspatents.com
Wow, I know some posters mentioned COD might have to be sold off, but didn't think that could actually happen.
Wonder what the next steps are now.
Would MS be ok with just Blizzard/King and spin off Activision, or at the least, lose COD?
Wonder what the next steps are now.
Would MS be ok with just Blizzard/King and spin off Activision, or at the least, lose COD?
Prepare to be disappointed, if this fails someone is buying Activision and the result may be worse for the industry than if MS bought them
I would love free CoD in theory. I don't want industry consolidation, especially of this magnitude. So I think MS would walk away from the deal and that is what I'd really like.
OP
OP
OK, with the info that we have so far, this would be the summary.
Provisional findings from the CMA:
- Short version (2 pages)
- Summary (16 pages)
- Long version (277 pages)
- Appendices and glossary (43 pages)
- PlayStation gamer research (38 pages)
- Press release
The merger may be expected to result in a substantial lessening of competition in:
A) console gaming in the UK due to vertical effects resulting from input foreclosure; and
B) cloud gaming services in the UK due to vertical effects resulting from input foreclosure.
Possible remedies:
1) Requiring a partial divestiture of Activision Blizzard:
a) Divestiture of the business associated with Call of Duty;
b) Divestiture of the Activision segment of Activision Blizzard, which would include the business associated with Call of Duty;
c) Divestiture of the Activision segment and the Blizzard segment (the Blizzard segment) of Activision Blizzard, Inc., which would include the business associated with Call of Duty and World of Warcraft, among other titles.
2) Prohibition of the merger.
3) Access remedies will be considered:
18. Microsoft has, however, informed us of existing and potential contractual arrangements with third-party platforms relating to access to Call of Duty. Accordingly, while none of the circumstances in which the CMA would select a behavioural remedy as the primary source of remedial action in a merger investigation (as summarised in paragraph 15 above) appear to be present, the CMA will also consider a behavioural access remedy as a possible remedy.
19. Access remedies are a form of behavioural remedy which seek to maintain or restore competition by enabling competitors to have access on appropriate terms to the products and facilities of a merger entity that they require to remain competitive. Access remedies normally require an access commitment which is set out in significant detail so that both customers and monitoring agencies can enforce compliance effectively. In this case, an access remedy would look to ensure third party access to Activision Blizzard, Inc's content that is necessary to remedy the provisional SLCs.
44. As noted above, the circumstances in which the CMA might select a behavioural remedy as the primary source of remedial action are not present in this case. The two markets in which the CMA has provisionally found SLCs are multi-faceted and continue to develop. This is particularly the case in cloud gaming, where the customer offerings and business models of market participants are evolving rapidly. We are of the initial view that any behavioural remedy in this case is likely to present material effectiveness risks. We invite the Parties to provide evidence on how these risks could be appropriately managed to ensure that any behavioural remedy is effective.
Next steps
The main parties (MS/ABK) have until March 1st 2023 to respond to the provisional findings.
Interested parties have until February 22nd 2023 to respond to the remedies notice.
Provisional findings from the CMA:
- Short version (2 pages)
- Summary (16 pages)
- Long version (277 pages)
- Appendices and glossary (43 pages)
- PlayStation gamer research (38 pages)
- Press release
The merger may be expected to result in a substantial lessening of competition in:
A) console gaming in the UK due to vertical effects resulting from input foreclosure; and
B) cloud gaming services in the UK due to vertical effects resulting from input foreclosure.
Possible remedies:
1) Requiring a partial divestiture of Activision Blizzard:
a) Divestiture of the business associated with Call of Duty;
b) Divestiture of the Activision segment of Activision Blizzard, which would include the business associated with Call of Duty;
c) Divestiture of the Activision segment and the Blizzard segment (the Blizzard segment) of Activision Blizzard, Inc., which would include the business associated with Call of Duty and World of Warcraft, among other titles.
2) Prohibition of the merger.
3) Access remedies will be considered:
18. Microsoft has, however, informed us of existing and potential contractual arrangements with third-party platforms relating to access to Call of Duty. Accordingly, while none of the circumstances in which the CMA would select a behavioural remedy as the primary source of remedial action in a merger investigation (as summarised in paragraph 15 above) appear to be present, the CMA will also consider a behavioural access remedy as a possible remedy.
19. Access remedies are a form of behavioural remedy which seek to maintain or restore competition by enabling competitors to have access on appropriate terms to the products and facilities of a merger entity that they require to remain competitive. Access remedies normally require an access commitment which is set out in significant detail so that both customers and monitoring agencies can enforce compliance effectively. In this case, an access remedy would look to ensure third party access to Activision Blizzard, Inc's content that is necessary to remedy the provisional SLCs.
44. As noted above, the circumstances in which the CMA might select a behavioural remedy as the primary source of remedial action are not present in this case. The two markets in which the CMA has provisionally found SLCs are multi-faceted and continue to develop. This is particularly the case in cloud gaming, where the customer offerings and business models of market participants are evolving rapidly. We are of the initial view that any behavioural remedy in this case is likely to present material effectiveness risks. We invite the Parties to provide evidence on how these risks could be appropriately managed to ensure that any behavioural remedy is effective.
Next steps
The main parties (MS/ABK) have until March 1st 2023 to respond to the provisional findings.
Interested parties have until February 22nd 2023 to respond to the remedies notice.
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if it does fale it will set a precedent which is great.
COD isn't even on Nintendo. Which other platform holders do you men?
This really isn't bad. You would think the deal was dead just going through some posts in here. From this it seems MS/ABK can still come up with multiple solutions for the CMA which still means the deal could go through. MS/ABK lawyers working overtime.
Thank goodness. I can't handle the drama anymore.
A terrible move because one market authority thinks Sony will go bankrumpt without CoD and UK gamers need expensive consoles for cloud gaming?
In the case of COD the CMA watches to much to the ps vs xbox market, Ignoring the market leader just by saying it is not technical possible to get COD on nintendo soon. Everybody forgot the Wii COD appearently, and activision just stopped making them. (probally didn't make enough profit, and nintendo didn't money hat them )
But yeah is this the first big merger since that the brexit is totally done, for the CMA?
But yeah is this the first big merger since that the brexit is totally done, for the CMA?
As of right now, $2.5B. If they go to the next dealine, it goes to $3B+, and they're likely losing valuation and getting sued too, so can be quite a bit more than that.
And people were acting like Jim Ryan was whining too much. Love it or hate it, gotta give him credit. It worked.
Edit: Worked at being a fly in the ointment, that is.
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If it fails I imagine it gets ramped up on a buying spree. You can't claim any other game is as important as call of duty so everyone else is fair game.
The year is 2431. Society has collapsed, cities are burning, the air is thick with sulphur, and somewhere in what was once Redmond WA a lone suited gentlemen with a briefcase is knocking on the door of a pile of rubble that the songs say was the Microsoft campus, asking why they haven't released a CoD game on PlayStation this year.
I don't think it does, if this were a Sega, Capcom, Ubisoft, probably even Take Two we wouldn't even be having this discussion. I don't think this outcome changes that.
Activision is the largest publisher in the industry, its a unique deal.
Why would you be against CoD on game pass specifically? I can understand being against the merger itself but nobody loses out and many people gain if CoD is on game pass.
"but hopefully if it's accepted then they should need agree to no CoD in Gamepass for the same stretch of time"
Why?
I don't say it's fair or not, but it's just been a terrible move. How much will MS end up paying if this deal falls through?
Still likely on the table to some degree. There's going to be lots of posturing and legal battling before a compromise is reached of some sorts.
Excuse my ignorance but what does divest mean in this case? They have to sell it?
Out of curiosity- if MS were to divest the COD IP and one or more major COD studios, could they negotiate the same 10 year contract they're offering as a behavioral remedy in reverse as a term of the sale?
I think there's an open question as to who the buyer would be, but I wonder if there isn't a path to MS having their cake and eating it, too. Losing ownership of COD has a lot less sting if you walk away with a few billion and 5-10 years of COD on Game Pass
I think there's an open question as to who the buyer would be, but I wonder if there isn't a path to MS having their cake and eating it, too. Losing ownership of COD has a lot less sting if you walk away with a few billion and 5-10 years of COD on Game Pass
The short-sightedness is absolutely staggering here. Way to celebrate further obstructions to unionisation or improvements of workers rights.
I hope mods deal with the drive-by victory laps that are being made in this thread.
Essentially, yes, they have to spin it off and make it a singular entity.
MS should've gone for SEGA or Embracer out of any pubs, I agree. Probably would've met a lot less scrutiny as well.
Just finished reading the summary.
To me, it sounds like they think CoD going exclusive would harm Sony and competition in the near term (5 years). Interestingly they seem to note that while it coming to Game Pass is attractive and beneficial to Xbox players, that benefit to consumers alone isn't enough to counterbalance exclusivity/degradation to PS. They note that Game Pass is an alt way to pay for the game, indicating they did not come to the same conclusion as Phase 1 where subscriptions are their own market.
Cloud gaming is primarily concerned around access to ABK titles because while ABK wouldnt go to sub services in the counterfactual, they think ABK would end up on cloud gaming services a la carte like Geforce Now. I wonder if all that would be necessary here is allowing abk titles on a la carte services.
Anyway, seeing as their concern has to do strictly with the total exclusivity or degradation of quality of CoD as potentially being profitable for Xbox in the near term (5 years) based on customer lifetime spend and all with the idk 24% of PS cod players switching to Xbox… 10 years seems effective to counter that, no?
That is double the consideration window and addresses the problem. PS cod players wouldn't switch, at least not in the same %, if it is guaranteed available for 10+ years. That 24% was also notwithstanding other PS titles lol. And as they said, game pass being offered alongside a buy to play title like CoD is a consumer benefit, but not really enough to materially matter.
To me, it sounds like they think CoD going exclusive would harm Sony and competition in the near term (5 years). Interestingly they seem to note that while it coming to Game Pass is attractive and beneficial to Xbox players, that benefit to consumers alone isn't enough to counterbalance exclusivity/degradation to PS. They note that Game Pass is an alt way to pay for the game, indicating they did not come to the same conclusion as Phase 1 where subscriptions are their own market.
Cloud gaming is primarily concerned around access to ABK titles because while ABK wouldnt go to sub services in the counterfactual, they think ABK would end up on cloud gaming services a la carte like Geforce Now. I wonder if all that would be necessary here is allowing abk titles on a la carte services.
Anyway, seeing as their concern has to do strictly with the total exclusivity or degradation of quality of CoD as potentially being profitable for Xbox in the near term (5 years) based on customer lifetime spend and all with the idk 24% of PS cod players switching to Xbox… 10 years seems effective to counter that, no?
That is double the consideration window and addresses the problem. PS cod players wouldn't switch, at least not in the same %, if it is guaranteed available for 10+ years. That 24% was also notwithstanding other PS titles lol. And as they said, game pass being offered alongside a buy to play title like CoD is a consumer benefit, but not really enough to materially matter.
I was referring to the deals MS has offered so far (so Sony, Nintendo, Steam etc). They don't cover the extent of what the CMA is concerned about re. 'CoD supply'. They're also concerned about future market entrants, particularly in cloud gaming etc. Microsoft can't really make a deal with entrants that don't exist yet. So that suggests a need for a broader solution than specific deals with specific companies, of which a structural might be the cleanest. But maybe MS/ABK can try to come up with something that gives a more general and open-ended access to CoD to any would-be competitor, beyond specific deals.
The only thing sure is that this deal was not for my beloved Starcraft. No matter who owns it, the IP is dead. 😭
Now without joking, we will see how much important was King (And Blizzard with important PC IP) for them... But I think this was always about COD and hurting Sony.
There are people that are against the deal on here; why shouldn't they be happy about this news?
they said it was about mobile. cod mobile is part of activision and one of the biggest mobile games
They were asked to divest CoD and its relevant business, it maybe still alive but you are literally take a vital organ of the deal there. One of the ways of going about making this deal work with Activision is the Access Clause which makes sure that CoD is (probably) in perpetuity on other platforms like PlayStation and Nintendo which means MS is probably gonna be contractually obligated to make CoDs in perpetuity on other platforms which I am not sure if its in their best interests.
I would tell the CMA to get fucked and make it very clear that my company will never invest in their country ever again. Even though this was expected it is highly unreasonable and just shows that these regulators and not thinking rationally but rather have a focus on hating big tech under any cost. So MS should leave this deal and make it very clear that the UK will not see any new investments ever again
Imagine claiming Ms can increase prices, but then force a remedy that forces Ms to increase prices, because lower price as somehow harmful.
Haha, the chaos has begun. I look forward to the long summary and going through this over time. I know there's going to be a lot that I disagree with haha, but that doesn't necessarily mean they won't have explained themselves well overall. We'll see! That cloud gaming paragraph isn't a good first impression coming into this thread, but it could just be a one-off miss. (On the other hand.. it's a pretty fundamental misunderstanding of everything... UNLESS what they're saying is that MS will win and then no one else will be able to compete and then MS will suddenly make it terrible for everyone to use cloud gaming, at which point all the people who can't buy a console will have a terrible time...I guess.. Which is perhaps even worse of an argument.. but..)
The behavioral remedies section does seem to be pretty formulaic and by the numbers. The balance is definitely against the deal passing, either way. But.. we'll see!
The behavioral remedies section does seem to be pretty formulaic and by the numbers. The balance is definitely against the deal passing, either way. But.. we'll see!
Looks like the best possible outcome for MS/Activision especially if they can get the behaviour remedy agreed?
I'm not understanding the CMA saying that there's a potential for behavioral remedies but didn't just accept them since Microsoft offered that already.
What's the next step for behavioral?
What's the next step for behavioral?
So while they prefer structural remedies, behavioral remedies are still on the table?UK antitrust authority is fine with Microsoft acquiring Candy Crush, and even for Call of Duty does not rule out 'access remedies': major progress since previous statements
The Competition & Markets Authority (CMA) of the United Kingdom has just announced its provisional findings according to which ( summary (...