The Microsoft / Activision Blizzard acquisition |OT| Antitrust Simulator (completed; discussing post-merger issues)

Bradbatross · Jun 19, 2023

Lowrys said:
Competition and Markets Authority is taking fire from all sides

When Vodafone unveiled its £18 billion merger plans with Three in the UK last week Margherita Della Valle, the Vodafone chief executive, called it a “vote of confidence in the UK and its ambitions to be a centre for future technology”.The tie-up between Britain’s third and fourth largest networks wo

www.thetimes.co.uk

If the FTC's injunction fails, the amount of pressure that's going to be on the CMA will be insane.

maabus1999 · Jun 19, 2023

Bradbatross said:
If the FTC's injunction fails, the amount of pressure that's going to be on the CMA will be insane.

My personal opinion is if this fails, FTC drops it to concentrate on the Albertson's / Kroger deal and maybe the Amazon / iRobot one since they are in much more locked in markets and easier to say as anti-competitive (especially the former!). If they don't, they oh boy does Kahn have some kind of vendetta because she does not have the resources to do all this. However, the Albertson's / Kroger one is very winnable for the FTC and the Amazon one is a stronger case than the current Microsoft one.

Hellshy · Jun 19, 2023

maabus1999 said:
My personal opinion is if this fails, FTC drops it to concentrate on the Albertson's / Kroger deal and maybe the Amazon / iRobot one since they are in much more locked in markets and easier to say as anti-competitive (especially the former!). If they don't, they oh boy does Kahn have some kind of vendetta because she does not have the resources to do all this. However, the Albertson's / Kroger one is very winnable for the FTC and the Amazon one is a stronger case than the current Microsoft one.

Just curious because I was listening to a podcast yesterday that brought up the Kroger deal but how is that more winnable? Wouldn't they still be well behind Walmart as far as market share goes?

maabus1999 · Jun 19, 2023

Hellshy said:
Just curious because I was listening to a podcast yesterday that brought up the Kroger deal but how is that more winnable? Wouldn't they still be well behind Walmart as far as market share goes?

More so with supply chain effects on top of the store presence. It would also put pressure on any not named Wal-Mart which is also a market concern. You also have regional concerns where they would have a monopoly (which can be rectified by divestiture but who will buy that many stores right now is a question as well). The top line number for the deal is 5,000 stores and $200 billion revenue which is massive in food supply / grocery. Think I saw an analysis of it officially closing at 35%, which is pretty low for a US-centric merger.

orochi91 · Jun 19, 2023

Just caught up from the last 100+ pages.

The FTC case feels like filler. Legit waste of time, lol

They have a terrible track record and are largely unsuccesful in their attempts to block things.

CMA is also likely to be be overturned given the insane pressure from all directions~

Frieza · Jun 19, 2023

View: https://twitter.com/postup_sog/status/1670826573103087618?s=46&t=sLPHwi-svbw7tQ-2pEq1_w

LilScooby77 · Jun 19, 2023

Frieza said:
View: https://twitter.com/postup_sog/status/1670826573103087618?s=46&t=sLPHwi-svbw7tQ-2pEq1_w

Get them to spill their secrets.

Hellshy · Jun 19, 2023

maabus1999 said:
More so with supply chain effects on top of the store presence. It would also put pressure on any not named Wal-Mart which is also a market concern. You also have regional concerns where they would have a monopoly (which can be rectified by divestiture but who will buy that many stores right now is a question as well). The top line number for the deal is 5,000 stores and $200 billion revenue which is massive in food supply / grocery. Think I saw an analysis of it officially closing at 35%, which is pretty low for a US-centric merger.

Ok that bring things to the light more. The gap between their share and Walmart is pretty big but I guess these things are more complex than at first glance.

Theonlytman2 · Jun 19, 2023

Hellshy said:
Ok that bring things to the light more. The gap between their share and Walmart is pretty big but I guess these things are more complex than at first glance.

I believe the main issue is that Kroger/Albertsons could greatly reduce competition in DEDICATED grocery stores. Sure there's Publix, HEB, and Food Lion, but they're regionally locked while Kroger/Albertsons has a nationwide grasp that can reduce competition in the market of dedicated grocery stores. With this in mind, I believe the FTC has a better chance against them than Microsoft/ABK.

Agent Icebeezy · Jun 19, 2023

Frieza said:
View: https://twitter.com/postup_sog/status/1670826573103087618?s=46&t=sLPHwi-svbw7tQ-2pEq1_w

This reeks of collusion from the side of the regulators. The spirit of regulation is to be mindful of market situations and make judgments about happenings within your borders and only your borders. Let the facts be the facts. This is not the stance that these regulators have done. If not for anything else, the current method of 'regulation' that some employ sounds like banding together to make a point, simply because they can. 26 instances of communication is making sure everyone is in lockstep with crossing T's and dotting I's so that their argument is strong. You don't need 26 of these if facts are on your side.

Wereroku · Jun 19, 2023

Agent Icebeezy said:
This reeks of collusion from the side of the regulators. The spirit of regulation is to be mindful of market situations and make judgments about happenings within your borders and only your borders. Let the facts be the facts. This is not the stance that these regulators have done. If not for anything else, the current method of 'regulation' that some employ sounds like banding together to make a point, simply because they can. 26 instances of communication is making sure everyone is in lockstep with crossing T's and dotting I's so that their argument is strong. You don't need 26 of these if facts are on your side.

As far as I know MS and ABK signed off on the CMA communicating with the FTC and there is nothing illegal about sharing the information and ideas while you have that approval. I am not sure why MS is pursuing this unless they think they were talking after they removed permission.

smikey · Jun 19, 2023

Wereroku said:
As far as I know MS and ABK signed off on the CMA communicating with the FTC and there is nothing illegal about sharing the information and ideas while you have that approval. I am not sure why MS is pursuing this unless they think they were talking after they removed permission.

MS probably think they were communicating past the time permission was revoked, likely because the FTC sudden filing.

KnowinStuff · Jun 19, 2023

Theonlytman2 said:
I believe the main issue is that Kroger/Albertsons could greatly reduce competition in DEDICATED grocery stores. Sure there's Publix, HEB, and Food Lion, but they're regionally locked while Kroger/Albertsons has a nationwide grasp that can reduce competition in the market of dedicated grocery stores. With this in mind, I believe the FTC has a better chance against them than Microsoft/ABK.

I agree that the Kroger/Albertsons merger is a much more difficult merger under the law. I looked at, and dismissed it, as a possible investment due to the high risk to the deal. The trouble with a grocery store merger is that you are not looking at the national "discount grocery store" market alone. You have all these tiny markets. For example, X-Box and Playstation basically compete everywhere. There are plenty of geographical areas where Kroger and Albertsons are the only two discount grocery stores. If I live in Winchestertonfieldville, Iowa, and the only three grocery stores within twenty miles of my house are Kroger, Albertsons, and Whole Foods, then the merger gives the new Kroger/Albertsons merged entity a monopoly in my local discount grocery market. All they have to do is charge slightly less than Whole Foods, a premium grocery store, and they are still the discounted entity. They therefore have the ability to unilaterally raise prices without losing customers.

Divestiture in the discount grocery market has not been successful in creating viable competition in the past. It has been tried. The problem is, if you spin off stores in the few areas where it is necessary in order to keep competition alive, then those spun off stores now lack access to the scale of supply chain necessary to effectively and profitably run a discount grocery store. They either have to raise prices, or they go out of business. Either one substantially reduces competition in that market.

Antitrust concerns can be very problematic in things where you are looking at local markets, particularly when administrative agencies are inclined to look very carefully at the viability of divested assets as a going concern. This iteration of the FTC seems likely to be interested in looking at that, and it would seem to not bode well for that merger. I will also point out that the FTC is accustomed to dealing with examining individual local markets, and it is something they are pretty good at. They examine hospital mergers regularly to make sure that one hospital in a region is not acquiring their only viable competition for any subset of customers.

MSFT/ATVI is a much more difficult case for the FTC. This is primarily because anyone who competes with them anywhere can compete with them pretty much everywhere. (Geographically that is.) That gives them a lot of less options for how to define markets. They cannot limit it regionally, except to the US market, and are instead forced to differentiate only along the lines of product offerings. When you have the FTC run by people that are anti-merger generally, or anti-merger in your particular field, less tools in their tool chest is always a useful thing. Even when they have the right tools, they don't always know when to use a hammer, when to use a screwdriver, and when to use a socket wrench. Accordingly, they have let some grocery mergers through that, in retrospect, seem to have been a mistake. But now they've tried selective divestiture and seen it fail. That's why I personally did not want to bet on them making the same mistake again.

Splader · Jun 19, 2023

Wereroku said:
As far as I know MS and ABK signed off on the CMA communicating with the FTC and there is nothing illegal about sharing the information and ideas while you have that approval. I am not sure why MS is pursuing this unless they think they were talking after they removed permission.

I mean, if MS is pursuing this, then clearly they think there's something worth pursuing and it wasn't all squeaky clean.

Tsunami561 · Jun 19, 2023

Are regulators not allowed to share info and such? Is the problem that they may have agreed to block the deal in tandem?

Wereroku · Jun 19, 2023

Tsunami561 said:
Are regulators not allowed to share info and such? Is the problem that they may have agreed to block the deal in tandem?

No there is nothing against them working together and sharing info or even agreeing to block the deal together. The issue is they can only share this information with permission from the parties and MS and ABK removed that permission shortly after the FTC decided to block the deal if I remember right. Not sure of the exact date. So it could just be a fishing expedition that will turn up nothing. However MS is turning over every rock they can to invalidate the ruling.

rscardinals · Jun 19, 2023

Tsunami561 said:
Are regulators not allowed to share info and such? Is the problem that they may have agreed to block the deal in tandem?

There is a limit on how much they can share with each other and is dependent on whether the merging parties give them a waiver to share info with other regulators. Microsoft withdrew their waiver in Phase 2 for the CMA in regards to the US/FTC. So the question is, if you couldn't share detailed information why did you have 26 meetings with the FTC?

DopeyFish · Jun 19, 2023

If CMA did share info and violated confidentiality, the fireworks will be glorious

Yoga Flame · Jun 19, 2023

DopeyFish said:
If CMA did share info and violated confidentiality, the fireworks will be glorious

Yeah, let's see how it plays out 😉

Wereroku · Jun 19, 2023

rscardinals said:
There is a limit on how much they can share with each other and is dependent on whether the merging parties give them a waiver to share info with other regulators. Microsoft withdrew their waiver in Phase 2 for the CMA in regards to the US/FTC. So the question is, if you couldn't share detailed information why did you have 26 meetings with the FTC?

There was a period of time where the CMA had permission in Phase 2. MS and ABK have the dates and times of the meetings so if there is really anything concerning they will bring it up.

T0kenAussie · Jun 19, 2023

Wereroku said:
As far as I know MS and ABK signed off on the CMA communicating with the FTC and there is nothing illegal about sharing the information and ideas while you have that approval. I am not sure why MS is pursuing this unless they think they were talking after they removed permission.

It looks like you answered your own question there at the end well done :)

They have complained a few times about what they see as the CMA and ftc communications that were happening up to the block decision (which was after they rescinded the permission) and the CMA was avoiding / not communicating with MS or ABK in that 2 week period

Mobius and Pet Octopus · Jun 19, 2023

It sorta does seem like a fishing expedition. But considering the stakes and the likelihood of success, they're probably going to try any avenue of attack they can possibly think up and support as long as it can move the needle even a little bit.

samiwami · Jun 19, 2023

I am having hard time gauging the vibe, are people in ERA for or against the merger?

Dega · Jun 19, 2023

samiwami said:
I am having hard time gauging the vibe, are people in ERA for or against the merger?

In this thread? I'd say most of the regulars are for it for one reason or another.

Disco Infernal · Jun 19, 2023

samiwami said:
I am having hard time gauging the vibe, are people in ERA for or against the merger?

Yep.

Raspyberry · Jun 19, 2023

This deal is going to go through by the end of this year.

Agent Icebeezy · Jun 19, 2023

samiwami said:
I am having hard time gauging the vibe, are people in ERA for or against the merger?

There has been a variety of responses. Some console war related in that they don't care about the process but just the result. Most of the people here (including myself) seem to care about the process of how it has been conducted and portrayed and are for the merger on the basis of what we interpret as our understanding of law and due process in that, to date, a good argument as to why this deal shouldn't happen has not been made that can stand up in court.

Vigilante Joker · Jun 19, 2023

samiwami said:
I am having hard time gauging the vibe, are people in ERA for or against the merger?

The general sentiment amongst most gamers, it feels, is that the deal will be positive for gaming for a multitude of reasons (employees, unionization, less ABK IP stagnation and revival of dormant IP, competition, cloud provider deals, Nintendo deals, Game Pass, Kotick getting kicked the fuck out, Google/Apple storefront duopoly getting a real challenge, much more) and that sentiment goes beyond this website.

The thing about this topic in particular is that 99% of deal dissenters cannot give a logical, justifiable and/or cohesive idea as to why the deal is bad, so most of the time they end up resorting to console wars, hostility and/or mainly shitposting (thus getting banned in the process) and then end up avoiding the topic altogether. Even with that, there are definitely still people who aren't for the deal that reguarly post here and are able to have meaningful discussion.

Wereroku · Jun 19, 2023

samiwami said:
I am having hard time gauging the vibe, are people in ERA for or against the merger?

I think many people are just watching it and don't have an opinion one way or the other. It would certainly improve Gamepass abd XCloud along with Xbox's position in the industry. At the same time neither ms or ABK will be hurt if it falls through. Sony and Nintendo will be fine will either result as well.

Deleted member 133522 · Jun 19, 2023

samiwami said:
I am having hard time gauging the vibe, are people in ERA for or against the merger?

At the present time, it seems to be that most, but not all, people in this thread are for it. But there are plenty of us that lean closer to neutral and are mainly interested in the case from a legal perspective.

However, there are times where it is more balanced. Like when the initial CMA decision to block was announced, there was an uptick of users voicing their approval of that decision

It's kind of hard to gauge Era-wide at the moment, because I think the majority of users in this thread are either here because they're holding out hope things can turn around or, as I mentioned earlier, are interested in the legal aspect. There's not a lot of incentive for those against to have hung around, since I think their perception is they've already received the outcome they were looking for.

If there are some significant wins in this FTC case and positive developments for MS, maybe we see more posts with opposing views pop up. Maybe not! That's my perspective on the thread anyway.

BBallFanatic53 · Jun 19, 2023

samiwami said:
I am having hard time gauging the vibe, are people in ERA for or against the merger?

What do you want the vibe to be? Right now seems for because the evidence is looking good there. The against come back but nowadays rarely because nothing's happening on that front.

chubigans · Jun 19, 2023

Vigilante Joker said:
The general sentiment amongst most gamers is that the deal will be positive for gaming for a multitude of reasons (employees, unionization, less ABK IP stagnation and revival of dormant IP, competition, cloud provider deals, Nintendo deals, Game Pass, Kotick getting kicked the fuck out, Google/Apple storefront duopoly getting a real challenge, much more) and that sentiment goes beyond this website.

News to me. Only 17% of GDC attendees think this merger will benefit the industry. 44% says it will have a negative impact, myself included.

Game developers aren’t so hot on NFTs, the metaverse, or huge acquisitions

NFTs? No Friggin’ Thanks

www.theverge.com

vixolus · Jun 19, 2023

chubigans said:
News to me. Only 17% of GDC attendees think this merger will benefit the industry. 44% says it will have a negative impact, myself included.

Game developers aren’t so hot on NFTs, the metaverse, or huge acquisitions

NFTs? No Friggin’ Thanks

www.theverge.com

game developers attending GDC isn't "gamers" like general population, but I also do not think there's been any significant general population polling on the matter.

BBallFanatic53 · Jun 19, 2023

chubigans said:
News to me. Only 17% of GDC attendees think this merger will benefit the industry. 44% says it will have a negative impact, myself included.

Game developers aren’t so hot on NFTs, the metaverse, or huge acquisitions

NFTs? No Friggin’ Thanks

www.theverge.com

Is there not a distinction between mergers like this one vs this specific merger in the survey. The link says "Only 17 percent of respondents think major acquisitions like this one will benefit the industry." It's possible to be for the ABK merge but not be for regarding other mergers.

Vagabond · Jun 19, 2023

chubigans said:
News to me. Only 17% of GDC attendees think this merger will benefit the industry. 44% says it will have a negative impact, myself included.

Game developers aren’t so hot on NFTs, the metaverse, or huge acquisitions

NFTs? No Friggin’ Thanks

www.theverge.com

Were they asked about mergers and acquisitions as a whole or specifically this one? The article makes it seem like it was more general.

Because Google, Amazon, and Meta (And Netflix to a point) have made some large acquisitions and ultimately messed things over as well, but I don't think they should be lumped in with this particular one. Not to mention some of these international investment firms and Embracer Group.

As a whole, major acquisitions and industry consolidation can be godawful. That I agree. I think the points to be made in this case are a bit different, IMO.

Vigilante Joker · Jun 19, 2023

chubigans said:
News to me. Only 17% of GDC attendees think this merger will benefit the industry. 44% says it will have a negative impact, myself included.

Game developers aren’t so hot on NFTs, the metaverse, or huge acquisitions

NFTs? No Friggin’ Thanks

www.theverge.com

I know you've been responded to multiple times, but I have to agree with everyone here. Those questionnaire results seem like they're about consolidation as a whole and not specifically the ABK merger.

Deleted member 133522 · Jun 19, 2023

vixolus said:
game developers attending GDC isn't "gamers" like general population, but I also do not think there's been any significant general population polling on the matter.

This is the factual answer.

We've had polling in the UK show that consumers support the acquisition, but again these are not necessarily gamers and it's not global.

I don't think we have anything reliable we could point to and reach a conclusion either way , in terms of whether gamers support this globally or not.

chubigans · Jun 19, 2023

This is what I'll say from a dev perspective on the merger.

You'll notice more and more indie devs skipping Xbox altogether. This is because it's increasingly harder to sell games on that platform. And so the only on ramp to making an Xbox port is by getting a gamepass deal.

Getting a gamepass deal is extremely difficult. I've been going through the process for well over a year and a half now. Sometimes you luck out and you have a smash hit and get an easy gamepass deal. But for a majority of devs, we're all fighting each other for the increasingly smaller bite of the pie.

Now because it's just Xbox it's easy enough to focus on PC/PS/Switch and make a go of it there. And of course there are a number of other subscription based offers, of which I've been a part of, and they're great. And I know that when you're on gamepass it's also a net win for yourself because it rarely damages other platform sales.

So what's the difference between PS+ on PS and gamepass on Xbox? Gamepass is very aggressive- you get day one AAA titles, something no other service can offer on a consistent basis (well, consistent in the kind of lineup that MS has year to year). At some point it makes less sense to buy games on that platform than it does subbing to them. And that's where sales can't really live harmoniously anymore, and you start to not just want a gamepass deal, but absolutely need it to survive.

Perhaps it's contradictory to want gamepass to exist, but not be too successful. I dunno. But MS gobbling up a massive company and putting all their titles under the gamepass wing just makes it more and more difficult to survive out here.

BBallFanatic53 said:
Is there not a distinction between mergers like this one vs this specific merger in the survey. The link says "Only 17 percent of respondents think major acquisitions like this one will benefit the industry." It's possible to be for the ABK merge but not be for regarding other mergers.

If I remember right the survey used the MS/Acti merger as an example.

GulfCoastZilla · Jun 19, 2023

chubigans said:
News to me. Only 17% of GDC attendees think this merger will benefit the industry. 44% says it will have a negative impact, myself included.

Game developers aren’t so hot on NFTs, the metaverse, or huge acquisitions

NFTs? No Friggin’ Thanks

www.theverge.com

GDC, the same place women were sexually harassed and drugged this year? Sounds like not a great pool of people to poll.

vixolus · Jun 19, 2023

EZMode said:
GDC, the same place women were sexually harassed and drugged this year? Sounds like not a great pool of people to poll.

this is a dumb comment really

chubigans · Jun 19, 2023

EZMode said:
GDC, the same place women were sexually harassed and drugged this year? Sounds like not a great pool of people to poll.

Are you fucking kidding me? What the fuck is wrong with you?

Now I remember why I don't post in this thread, holy shit.

Fabs · Jun 19, 2023

No doubt Games sell worse on Xbox but I'm sure that has way more to do with their install base rather than their users refusing to buy games. That Capcom data showed Ace Attorney selling a small number compared to other platforms yet it's still getting its sequel ported. A more competitive platform is best for the industry all around. The more competitive options the better for everyone.

GulfCoastZilla · Jun 19, 2023

chubigans said:
Are you fucking kidding me? What the fuck is wrong with you?

It's a thing that happened? There was a bunch of news stories about it?

The attendees are people in the business and developers. It seems like the industry is not filled with pleasant people? Not that it's news, but I don't know why we would take a survey seriously when the participants could be trash humans.

PoeticProse22 · Jun 19, 2023

chubigans said:
If I remember right the survey used the MS/Acti merger as an example.

Yes, it did:

IIRC, there were also numerous comments from developers accompanying that particular question, several of which referenced the MS/Acti deal.

Corrik · Jun 19, 2023

chubigans said:
News to me. Only 17% of GDC attendees think this merger will benefit the industry. 44% says it will have a negative impact, myself included.

Game developers aren’t so hot on NFTs, the metaverse, or huge acquisitions

NFTs? No Friggin’ Thanks

www.theverge.com

This is a super old poll, but as we discussed then, the people polled would have a reason to be against big acquisitions. They could be the ones who would be a redundant role, create uncertainty for their career going forward, possibly take away creativity, or just make them part of a poor company.

It's not the best people to poll regarding it.

chubigans · Jun 19, 2023

EZMode said:
It's a thing that happened? There was a bunch of news stories about it?

The attendees are people in the business and developers. It seems like the industry is not filled with pleasant people? Not that it's news, but I don't know why we would take a survey seriously when the participants could be trash humans.

I know it was a thing that happened because I was there. Do I really have to spell out that the 28,000 people that attended are not all "trash humans"? Are you seriously that dense? What is wrong with you.

Dega · Jun 19, 2023

So it was in general not specifically this case.

Cantaim · Jun 19, 2023

EZMode said:
GDC, the same place women were sexually harassed and drugged this year? Sounds like not a great pool of people to poll.

I've been read only on this thread since its inception but I'm breaking almost a year of silence to tell you that it is time to log off for the day

Bengraven · Jun 19, 2023

Vigilante Joker said:
The general sentiment amongst most gamers, it feels, is that the deal will be positive for gaming for a multitude of reasons (employees, unionization, less ABK IP stagnation and revival of dormant IP, competition, cloud provider deals, Nintendo deals, Game Pass, Kotick getting kicked the fuck out, Google/Apple storefront duopoly getting a real challenge, much more) and that sentiment goes beyond this website.

Honestly yeah, I'm for it for the majority of reasons you mentioned. You literally covered everything. Though I don't really care about Gamepass since I usually just buy the games I want, but for me this has always felt less about what *I* get out of this and what ABK employees and to a lesser extent gamers get out of it.

AngelL0ls · Jun 19, 2023

EZMode said:
It's a thing that happened? There was a bunch of news stories about it?

The attendees are people in the business and developers. It seems like the industry is not filled with pleasant people? Not that it's news, but I don't know why we would take a survey seriously when the participants could be trash humans.

Posting such garbage in a thread about ABK of all companies is just stupid man. People get it, you want the deal to go through, thats fine, but that comment was just weird..
I dont blame Chubigans for not wanting to engage in this thread.

The Microsoft / Activision Blizzard acquisition |OT| Antitrust Simulator (completed; discussing post-merger issues)

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