It's not that Teams has more integrations with the rest of Office, it's that it is bundled for free with Office.
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It's not that Teams has more integrations with the rest of Office, it's that it is bundled for free with Office.
While that would be awesome. It'd also require Slack to integrate with Teams in order to pull it off. Software isn't just as simple as waving a magic wand and suddenly you have integration. If you want integration on this level you need both sides to cooperate over it. And to cooperate that means both parties have to actually want it and work towards it. And security also has to be decided upon because you have to remember, these are corporate tools filled with confidential information; and any weakening of security will result in both products having their throats slit by companies and governments.
In reality, Slack is going to want to make it harder to leave slack, just the same way that Microsoft would make it harder to leave Teams. So its going to be hard to get cooperation. And thats the exact reason the EU had to recently legislate in their Digital Markets Act that gatekeepers are forced to integrate their platforms.
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But as was mentioned previously, as a paying Office/Microsoft 365 customer I expect them to add features to the suite, including real-time communication and collaborative tools. That and they already had many of the features of Teams in other apps, Teams just better integrates them.
This isn't actually true, though. Microsoft has a dizzying array of levels of subscription, but Microsoft 365 Apps for Business – formerly known as Office 365 and, essentially, the Office suite we all know and talk about as "Office" – does not include Microsoft Teams. You have to pay more for a tier that includes Teams.
I think these are better arguments than the typical exclusivity one. But neither of these are absolutes. Consolidation doesn't necessarily lead to any change in worker's rights at all. In many plausible scenarios, it even improves their absolute situation and their relative power. My guess is that you're envisioning a specific thing when you say "consolidation" and you're lumping all acquisitions into that mold. But consolidation to the point of lack of choice in publishing or working elsewhere is not a reasonable fear in gaming - not with this acquisition, not with any other single acquisition. The gaming market is extremely fragmented right now. The idea that fragmenting it less in certain ways is going to fundamentally destroy the industry or workers' right is a logical leap that is not self-evident.
Remember, just because a bun is a necessary condition to make a burger, does not mean we can call a bun a Big Mac [or locally equivalent famous sandwich/burger object]. [A different take on slippery slope.]
Big corps dominating the industry hasn't led to any meaningful decrease in independent studios/pubs. I mean, do you think that the CURRENT landscape is one where big corps don't dominate? Sony dominates. TenCent dominates. Steam/Valve dominates. Apple dominates. Google dominates. Microsoft and Nintendo have very successful fiefdoms. The platforms are currently ruled by big corps already. They have been for decades now, in fact, but they're more in control now than ever. And yet... we also have MORE independent studios and publishers than ever before. And there's more access to self-publishing or niche-publishing than ever before. AND there's more chance than ever that low level publishing is able to break into those top slots on their own merits than ever before.
Am I saying that big corporations are better? Not at all. But the idea that acquisitions are an inherent universal evil according to the laws of physics and reality is... overblown at best. Especially when people act like any other evil is acceptable, so long as consolidation doesn't happen. Like no, if workers rights are the problem, let's actually tackle that problem. If exclusivity is the problem, let's actually tackle that. Consolidation is not actually a proxy for those ills. We have to stop ignoring the actual effects. The vast majority of this forum has no problem with Steam's monopoly on this forum (even with their smaller acquisitions).
I actually think this is well argued and you're pulling in some of the concerns from CMA, especially. And I won't treat it dismissively, but some of these same points are also why people are arguing that this doesn't meet the standards set forth by regulators. You are right that regulators are looking at the future. They didn't use to. This is a pretty recent shift in thinking - and one that isn't even legal in some jurisdictions yet (really, possibly only the CMA is supposed to look at this at all because of a recent change in the law). You and the CMA suggest that streaming is a growing market that MS could corner and stifle competition in. CMA's Theory of Harm 2, I believe.
There are two questions to ask here, though. First, is the streaming market an ACTUAL independent market? Do you play fundamentally different games on cloud than you do on your console? No, indeed, there are no cloud exclusive games. Cloud gaming is also intimately tied to existing platforms and distribution models. PS Now couldn't exist if it weren't supported by PlayStation's retail/digital business. PS streaming today is tied directly into PS+ and can't be unbundled, because it can't stand on its own. Same is true with xCloud, which has never been standalone. Google and Luna both tried to do similar things, tying streaming to successful existing segments of their business: YouTube and Twitch. But they didn't struggle/fail because MS withheld Halo from them and they didn't get God of War. Streaming is a clearly hard business - one that is not guaranteed to grow at all, certainly not to the point where it supplants traditional distribution models within the next 5-10 years.
If we're regulating by trying to forecast the gaming market 10 years down the line, are we really regulating? Or are we just picking winners and losers?
Second, can others compete? Yes, absolutely. Google and Amazon absolutely COULD have competed, and Amazon could maybe still save themselves. For example, Nintendo could compete tomorrow (well, maybe next year) if they choose to partner with Amazon Luna to provide exclusive streaming services to Switch. That could literally get announced tomorrow, and it would fundamentally change the landscape and challenge Microsoft's leading position. As it is, they're using a mix of 3rd party providers like Ubitus to provide cloud streaming delivery of games to that platform.
Ubitus, btw, uses both Azure and Amazon cloud services as a backend. This is one of the complaints that the CMA and Sony had against Microsoft. They own Azure! It's an advantage. And it is, to an extent. xCloud doesn't actually use Azure technology. It uses their racks and datacenters, but their hardware and software are distinct from the Azure tooling, because it fucntions differently and addresses a different need. So CMA complains that Microsoft doesn't allow other players to use xCloud for their cloud streaming, which is true - but that's because no one provider wants to use XBOX HARDWARE as the basis for their cloud streaming service. Meanwhile, MS has no problem with allowing competitors to use Azure at a fair market rate. (CMA also mentions something about Windows Server that apparently may be a misunderstanding of how the tech works, but whatever).
More broadly, how does ABK prevent Sony from competing? Which ABK games were on PS+? Which ones were on Stadia, Luna, or xCloud? They're clearly not a necessary condition for the operation of a cloud service. The worry is that MS will put it on theirs and now put it on other services. But.. what's the actual problem there? Is the provision of COD on xCloud going to fundamentally change the landscape? Because that didn't happen when other big games like GTA and RDR2 have shown up on Xbox or PlayStation's services exclusively. That isn't happening today when Fortnite is only playable on Xbox's cloud (for free). You've really not heard anyone complaining about that, have you? And Fortnite on cloud (literally the only way many people can even play the game on mobile) is a WAY bigger deal than COD is.
The 'what about' stuff is indeed whatever. (Though, I don't think it's unreasonable to think that Sony can come up with some pretty good alternatives if they have the promised 10 years of guaranteed COD (at parity - more than Sony ever offered) to think about it.)
Beyond that, you said it well yourself: the current market leader is not guaranteed. It changes on a dime sometimes. One press conference can ruin the entire image of the company and set it into a spiral for the next 5 years. You're right that "MS will only be in 3rd place" isn't a sufficiently convincing argument for regulators that this deal is ok (and it's not the argument MS is leading on with them). But by that same token... what's the problem with this deal hurting Sony? Sony doesn't have a God-given right to be on top of the industry. No one is arguing that this will leave Sony unscathed and we can quibble about degrees. But there's really no scenario where Sony waffles in shock for 10 years and then unceremoniously dies once COD finally leaves the platform. The only question is whether this deal affects Sony's ability to compete. And it does not. It maybe forces them to compete differently. Just like how Sony's dominance forced Microsoft to compete differently by expanding into Game Pass and really taking the ball and running with it with xCloud, where Sony had let PS+ and their GaiKai acquisition languish for years. And to me, there's nothing wrong with that at all. That looks like more innovation and better competition to me, not less.
Note: the first part of this crazy essay I've written is about what regulators need to do to win. If CMA is convinced that streaming (or multi-game subs) aren't a market, then that whole theory of harm collapses. But the second part is more my opinions about the appropriateness of the regulatory action in general. Don't want to pretend I'm writing from some legal rule there.
My only off topic convo re Slack, the turn around was pretty funny.
https://www.theverge.com/2020/5/1/2...eams-competition-stewart-butterfield-comments
techcrunch.com
Back to the ABK deal.
https://www.theverge.com/2020/5/1/2...eams-competition-stewart-butterfield-comments
Slack has filed an antitrust complaint over Microsoft Teams in the EU
Workplace instant messaging platform Slack has filed an antitrust complaint against Microsoft in the European Union, accusing the tech giant of unfairly bundling its rival Teams product with its cloud-based productivity suite. A spokeswoman for the Commission’s competition division confirmed...
techcrunch.com
Back to the ABK deal.
After a quick google it looks like MS 365 business basic, standard and premium include Teams but Enterprise does not. Enterprise is businesses over 300 employees it seems.
DukeBlueBall is probably right that Teams stuff should be in a different thread.
By this logic, Slack now being bundled into the incredibly popular and even ubiquitous Salesforce package should be Illegal™?
Edit: I wanted to participate in the derail before we all got tired of it.. But I was held up by trying to figure out how to make the ™ show up. Not to worry, I figured out why my AutoHotKey script wasn't working. Now I can spam ™ without having to look it up on Google™ (actually Bing™) anymore!
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Only if I can be guaranteed that Tony Hawk will be driving a skateboard. I fear my words were not heard. Driving. Not skating.
If the first crossover game isn't a Microsoft Dating Sim where the Forza car can have a meaningful relationship with Bastion, then we as a society will deserve every ounce of the coming punishments for our sinful sicknesses.
Clippy obv ends up with Dr Neo Cortex.
Seems to me that a lot of members here are rooting for Microsoft to acquire studios and publishers left and right. For the last 20 pages or so, lots of Era members are rooting that if this deal with Activision goes through that Microsoft should go on to attempt to buy Sega, Namco, Take Two, Valve, Square-Enix, Capcom, and the biggest prize of all that Microsoft tried to buy 20 years ago, Nintendo.
In a hypothetical scenario, let's say the Activision deal goes through and Microsoft succeeds in buying some or all of the other publishers and developers. As a consumer how is this good for me? And most important of all, how is this good for the industry to have so much consolidation?
BTW, I have no dog in this fight. I'm mostly a PC gamer with Switch as my only console.
I mean they wouldn't be able to buy another big one. They should be able to buy this one though because as was mentioned multiple times the playing field is uneven everywhere not named America or the UK and even then Sony trounces them in both of those areas.
Can you, uh, show me someone "in the last twenty pages or so" who was rooting for Microsoft to buy Nintendo? Or Valve?
Most of the people I've seen saying MS should buy a lot of smaller publishers after this have been saying that they should do that if this deal is blocked, not if it goes through. Which, like, isn't necessarily great, and isn't really how companies that have just had their wrists slapped by regulators typically operate, but it's a very different scenario than "MS should buy AB, and then Take Two!" which I haven't really seen anyone argue for, much less the rest of it.
That's the strength of world-wide market dominance held by Sony though. I think some of the "pro acquisition" talk, specifically against the talking points from Sony, boil down to the fact that Sony has the advantage of a lot of "freebies" by way of just being #1 for so long. If you're a tiny team with limited resources, you'd pick the larger install base (sometimes of 3:1) every time to hedge your bets. If you're a mid-seized team and want to release something niche, the same factors determine if there's a cost-benefit to supporting the other thing. Sony built this over the years, some regional, some cutthroat, and some through smart deals. The idea of "legacy" is hard to circumvent once it's there. iPhone was initially the "clean, just works, easy" alternative to Android. Now they're adding as many customization options and widgets and whatever else. The brand is still perceived as "clean, just works, easy" when two of those elements aren't the case for a first-time user. It's the legacy users and influences that push that narrative because, for them, it's what they're accustomed to. There's a lot of familiarity build-up that people ignore.
This 100%. Nothing about this now is anti-competitive, and if there start to be those practices identified, the FTC or EU can come in a break things up or make demands. They do this all the time.
You do when you're adding that many employees. Or are you suggesting the current HR department should absorb the influx of people?
If stealing chocolate in a time and economy where chocolate was the currency, then yes. You have to scale everything if you want to scale anything, and look at the landscape at each point in time. Otherwise, it's just a false equivalency.
This point exactly.
Am I mistaken in remembering that Activision investors wanted to sell? When you're that size, there are a finite amount of entities that can be part of the conversation. Microsoft is one of them and had a business case/plan for that kind of purchase, so they're going for it. This isn't a hostile takeover.
Size matters, yes. Always. But why don't you think Sony wouldn't try if they could? They clearly value CoD a ton. It also depends on who wants to sell, who fits their corporate strategy, and where their priorities are. MS has also acquired studios they have a long relationship with over the years, but not as directly tied to as Sony, for sure. I don't see why that matters. If anything, Sony is just slowly investing and then buying the studio when they believe them to be at a certain level of success.
I'm not a fan of the Walmart/Amazon dominance either (as a user of both) but that's because they can control finite resources. There's not really a supply-chain for gaming anymore, outside of consoles to a degree. I can get a license to Unreal or Unity and make a game where I sit. Budget doesn't even truly matter, and only informs what your returns have to be. We live in a world where Avatar 2 needs to make $2 billion to start being profitable, and Smile is well in the green at $200 million on a $17 million budget. A movie that was adapted from a short made by a few people. Being successful isn't tied to being the biggest most-expensive thing. Vampire Survivors says hello.
This. I'm always mystified when I hear people talk about "release droughts" as if there aren't more games released daily than the average person can even research.
Others have asked as well, but I'm also curious about your perspective on why it's bad for the industry. I don't see what's being taken away versus perhaps a shift in where people play things.
From the stuff MS is talking about openly, they want CoD in more places (Switch) might bring some dead IP back, may combat crunch with CoD by relaxing the release cadence (which would also open space for competition), wants to support lower barriers for more people to play and engage, wants to use King as a way to give relevancy to alternative app stores in iOS and Android, and seems to be uninterested in stopping unionization (at ABK). What am I missing?
How though? It's not a finite industry with massive barriers to entry. Tunic, a GOTY contender in many places, was made by a few people. Cuphead as well. Vampire Survivors. Yes, not everyone can be a massive AAA studio - there will always be a limit to how many of those can be sustained, but that's not a requirement to be relevant in the gaming space. I feel like 20 new studios have been formed this year alone. And these are the ones announcing their creation because they're tied to bigger names who left other entities. There's no reason to think that will just stop happening.
This point exactly.
Right? Now, I can see the argument that Slack should be given the tools to integrate would an end user chooses (which I think they do with other add-on services across their products) but saying they can't do something with their own products is a little odd to me
Admittedly lost in the weeds as to what this was a response to, but:
If the Slack/Teams thing: Adding feature benefits internally shouldn't be immediately anti-competitive. Outside of announcing the intent to develop that option to Slack so they could build something concurrently, the only anti-competitive measure would be to hinder Slack from the tools to build their own solution as well. Outside of the fact that Slack could try to do this with Sheets, Google Docs, or LibreOffice? Or why isn't it an issue that Apple and Google haven't allowed that kind of integration already? It's only a thing because someone started doing it. To a degree, I genuinely think because Microsoft is doing it. If Apple integrated Sheets with FaceTime I don't think we'd hear about it honestly.
Well said.
You're not wrong that concerns need to be looked at, but I don't see what the strangehold is exactly. Sony has more overall subscriptions by way of having a larger user base, without CoD or putting their games on there day one. They can "compete" right now by changing that. Apple has a subscription service that is apparently doing well right now. They could also invest in bigger publishers or studios and be competitive pretty quickly within the Mac community (seeing as they tend to be very insular in their offerings). Google could have continued with Stadia by shifting their core business model. They gave people all of their money back instead of shifting to a Netflix-style service. Their tech was better. Their distribution was worse. If Nintendo announced today that you could pay $20/month to access all of their back-catalogue up to Gamecube on Switch, they'd crash the e-Shop. Imagine that translated into streaming to browsers as well... The issue isn't that they can't, it's that it doesn't fit the business model they prefer. Nintendo wants to sell you an old game for $20, not give you access to all of them for that same price (I know they have a thing, but the offerings are very limited). Sony wants to sell you premium-priced products upfront. Their desire to do what they know isn't indicative of their inability to do so.
Anyone else trying to break in from the outside needs to have some level of "in" already, and they get to decide how they want to proceed. That might be a large publisher investing in cloud services and incentivizing smaller developers to their platform, for a cloud company investing in gaming to put more eyes on their cloud services.
Sony is absolutely competing. So is Nintendo. But it's silly to say they have to work as hard in the gaming sphere to have their respective impacts. You mention the dark PS3 days - that mostly comes down to high pricing (necessary for BluRay) and didn't really need anything other than the time before people migrated back. Brand loyalty is a huge factor. It's easier to accept a falter when it's not the norm, and it's easier to regain the momentum that already existed. The launch follies of PS3 and Xbox One are closer than people like to remember, yet Sony still outsold the Xbox 360 and Microsoft got utterly destroyed for an entire generation. The gaming community, at large, gives Sony a bigger pass because so many of the current players literally grew up with that brand. This is trying to convince a Coke drinker that Pepsi is good. They won't have it. It's reflected in the drive-by post a couple of pages back, arguing that MS just needs to make "good games," as if that's not a thing that has happened consistently over the past few years.
Nintendo has a lot of the same things. Wii, for a large part of the "gaming" community, was a joke. It sold gangbusters to the general public, though. The brand itself can withstand a ton of bad years or press because the name has become an institution. It helps them get away with a lot. Like, re-releasing old games at a higher price point and then never dropping that price point over the course of 4 years. Perhaps not as anti-competitive, but predatory in practice for sure (knowing that parents and kids are the targets and will just have to pay what is on offer). They don't have to be competitive with MS and Sony directly in that way, which helps them a lot. God of War 2018 can be grabbed for $15 new, but Breath of the Wild (2017) is still a $60 game. Why? Because they don't have to. That's market power.
With all that laid out, I don't see what inherently gives MS that kind of brand power and dominance with this ABK deal, now or in the future. They can make other moves to prevent competition in the future, but regulators should and can step in at that point to knock them down a peg if it's deemed unacceptable. This is literally happening with Teams and Slack (being discussed above). MS is leveraging its in-house product, and a competitor says it puts them at an unfair disadvantage. Now a governing body is stepping in to take a look. This may or may not be a long or drawn-out thing, but it needs to be looked into because it might be a valid point. The fix might just be "allowing tools to similarly integrate publically available." Playing field evened. MS can't even price Azure differently to competitors than it would itself. That stuff is monitored. The operating budget of GamePass has to account for the "cost" of Azure. It's similar to the MS Store on PC and Steam. Microsoft has cross-buy as an incentive, but people still use Steam because of what that product offers that's better. Doesn't matter that it's within Windows - that fact doesn't hurt Steam or any of the people who make games for Steam.
They should block a hostile takeover if it were to happen. This is a "what's next, marrying dogs is legal?!" kind fo escalation. That's not what's happening here, and if it was going in that direction it should be treated differently.
Which should be done. But also, why can't slack team with another "office" competitor and have the best Slack integration there? Wouldn't that incentive more of a movement from MS Office's dominance entirely? If I were Google I'd be offering a branch right now.
I don't want them to get others just to get others. That line of thinking is odd. But the question is more how is it bad for you? The intent of the push (right now) is to reduce barriers and lower end-user costs. "You can access and enjoy the way you always have, or do so this other cheaper way." The secondary hope (and Phil seems to be interested in this direction) is releasing devs from the CoD mill and allow them to do unique stuff again. This just adds variety to the landscape.
Consolidation is hard in its industry because we are very far from a place where you have to pay one of the industry leaders to participate. New studios pop up all the time. More games are being made on every scale than ever before. The current "big" ones exist within a dozen or so companies, largely, but that hasn't prevented others outside of those to make an impact (and money).
In the long run, the competition in this area can absolutely foster more unique experiences from smaller devs, whether on GamePass, PS+, Luna, or whatever comes next. Looking to streaming content, for all of the consolidation and competition there, I have also never watched more native Korean or native Urdu content in my life than I have in the past year alone. That stuff would have never come across my radar, and if it did I would likely ignore it for the price of admission. Some people seems to have an issue with who is doing it, but that it's being done is a very good thing overall.
Quite - I also need to stop with the wall posts.
I'd rather have a Microsoft Fuzion Frenzy reboot with all the IP. They can even borrow a bit from Wario Ware and have some micro-challenges using their wealth of IP. The kart-racing genre seems to be very finicky, similar with stage-fighters (though give me an MS Power Stone and I'm in).
No, the simple act of bundling isn't what got MS in trouble.
They got in trouble because it was unreasonably arduous for customers to discover and instal products that competed with IE.
Netscape had to spend loads to ship their software to potential customers and hope they installed it. Or hope customers would jump through hoops to download it over dial up.
There's no such dynamic today with regards to competitors to the office suite or anything MS bundles today.
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Tony Hawk belongs in the lightweight class. I want The Lost Vikings to be heavyweights and their inclusion makes it so shields are thrown just like green shells.
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I'm not optimistic that this deal will be approved. And I'm okay with the rationale behind it.
However, I am perturbed by some of the embellishments and statements made in Sony's response to the CMA Issues Statement. It says things like Microsoft will raise prices of consoles if they become dominant - something that Sony themselves has done. It says Microsoft should not be trusted when they make claims about games being multiplatform - something that seems very disingenuous, given Microsoft has honoured the Deathloop and Ghostwire timed deals, has continued to support pre-existing multiplatform games (like Doom Eternal or Fallout 76), given they have never lied about their intentions to make Starfield and other similar new games exclusive, and given their support of Minecraft being multiplatform. Just seems ridiculous to me.
However, I am perturbed by some of the embellishments and statements made in Sony's response to the CMA Issues Statement. It says things like Microsoft will raise prices of consoles if they become dominant - something that Sony themselves has done. It says Microsoft should not be trusted when they make claims about games being multiplatform - something that seems very disingenuous, given Microsoft has honoured the Deathloop and Ghostwire timed deals, has continued to support pre-existing multiplatform games (like Doom Eternal or Fallout 76), given they have never lied about their intentions to make Starfield and other similar new games exclusive, and given their support of Minecraft being multiplatform. Just seems ridiculous to me.
While it might make sense. Slack is owned by Salesforce, which is another major corporation making software and products for enterprise. Enterprise is also a market that Google themelves are trying to break into with varying levels of success. Salesforce directly competes with Google in some areas and Google isn't going to give away their Office Competitor for Slack integration when they can just improve their own versions of Enterprise Communiations Tools (Chat/Meet).
Basically, even if it makes sense on a surface level. Everyone is in it for themselves and nobody wants to share such a lucrative market and give corporations who generally love to throw money around, a reason to throw their money at anyone but themseleves.
Did Microsoft have another legitimate option other than honoring the contracts for Deathloop and Ghostwire?
I'm 100% sure those contracts had cancellation clauses baked into them. Microsoft could have absolutely used them if they wanted, and were willing to pay the price to do so. That said, Microsoft isn't stupid and if these games were Playstation Exclusive from the very beginning then an Xbox Port isn't going to exist. The release date would have to get pushed back to go create an Xbox version, and it'd have to be brought up to parity to keep Microsoft from making a mockery of itself and Bethesda. And if they went full-on in the other direction by making it Xbox Exclusive, they'd piss off retailers and Playstation, and Playstation Fans would write off the console even more out of spite. Regulators would also note this down as a big-ass red flag for future deals (like this one).
So take from that what you will.
That's fair. It's equal parts "then make a better product Salesforce," "why not complain that nobody would allow it" (as in, if Google did create the solution and integrated, would it be looked at?), and "MS should release the tools/directions to allow that kind of integration."
You can't improve if you're already on top (which is slightly reductive, and shouldn't be applied to everything) even if it's with your own in-house efforts.
100 people dude. The stupidest argument on the net. Activision(10k) square(3k or more) UBI(10k)
You are citing a magazine from 1996 that says that in 1995, Psygnosis games accounted 40% of game sales. In 1995, Psygnosis was already owned by Sony.
Sony acquired Psygnosis before they entered the video game console industry, before they had even established Sony Computer Entertainment.
Now, as for that article, it says that PlayStation had launched in September 1994 in the US and EU, and per that article, had already become the market leader in one year since release. Well, that's incorrect, because the PlayStation launched in December 1994 in Japan and September 1995 in the US and EU. So already, the article is misrepresenting easily verifiable information, so I'm not certain why we would place an emphasis on the 40% figure cited.
But taking that at face value, let's assume that Psygnosis titles (which were already under the Sony umbrella for 2 years at that point) accounted for 40% of game sales in Europe in 1995. What was the market share of Psygnosis prior to the acquisition (so 1992)? That would probably be more of an apt comparison. Now I can't really ascertain the best way to go about looking it up, but 1995, Psygnosis had three titles in the top 10 games sold in the UK (a proxy for EU): Destruction Derby, Discworld, and Wipeout. Good year for them! But in 1992, I can't really find any of their titles on any best selling list in UK or Europe, in an admittedly quick glance. But given SF2 and Sonic 2 were released that year, I will say it's unlikely that they held a 40% market share.
So long story short, not really sure how comparable Psygnosis is to Activision, in many ways, such as the one plato pointed out.
This is a lotta words to try and circle back to "Sonys organic growth model is virtuous" lmao
And who's fault is that? Who had a big part in that after a successful Xbox 360 generation... going into the Xbox One generation? Who chose the approach they did with the Xbox One? Chose to let Sony get a bunch of marketing deals to start that gen going into the middle of that gen? Allowed them to jump out to a big lead.
We didn't get here with just bad luck.
Edit- and I'm just saying one of the largest corporations already bought one of the largest publishers (which includes many studios and bunch of storied IPs...and a few game engines)....and again plans to buy another of the largest publishers with more studios and a bunch of storied ips....and one of the best game engines. I thinks some look over that, when the focus for some reason is only COD.
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And here they are using the tools at their disposal to make better games, grow studios, create new business models, create new genres and games, make more compelling hardware, plan for the long term, and yes also buy some valuable studios and IP that will allow them to sell better, make more money, and grow their brand.
But I don't know if many of the people on this forum or on Twitter who currently believe that Sony is the better publisher, also believe that MS + COD suddenly becomes the better publisher. I think you also have to stretch to think that MS + COD suddenly becomes the more successful or profitable publisher. And I think you're misreading some major signs if you think that MS + COD suddenly makes PlayStation irrelevant.
People who are against this acquisition (which is fine), just keep telling us that it's bad. (IMO without much of a good argument why, but ok that's debatable.) But what I don't see basically anyone addressing is why it's illegitimate. Why is this tool off limits legally or logically?
The whole organic vs inorganic debate is funny when Jim Ryan said Sony is pursuing inorganic growth earlier this year.
Sony 'Not at All Finished' Growing PlayStation Studios via Acquisitions
Inorganic growth not done yet
www.pushsquare.com
I mean that's different leadership.
Having Mattrick was the embodiment of bad luck every time he opened his mouth.
I don't feel some need to.... many here are not legal experts on the matter.
But I did say why I feel it's not good as a gamer...a bunch of great previously multiplat studios, IPs, and game engines...under one console manufacturer.
edit- edited out the original part because I don't want to take this off-topic....there's other threads for that.
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The whole organic vs inorganic debate is funny when Jim Ryan said Sony is pursuing inorganic growth earlier this year.
Sony 'Not at All Finished' Growing PlayStation Studios via Acquisitions
Inorganic growth not done yet
Well yeah… that's different! For… reasons….
I'd argue that Gamepass can change how games are made in a good way. Just look at Pentiment.
And who did Mattrick work for? The company knew what was going on... they have meetings. Mattrick had folks to answer to as well.
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What does virtuous organic growth have to do with pointing out the inaccuracies of an article cited to minimize the differences between Sony's purchase of Psygnosis and Microsoft's purchase of Activision? Lol
Is the point being made that Xbox fucked up (duh) and certain ways to right that ship are off limits to them because of that?
Otherwise, I don't even understand why you'd bring up how they fucked up in the past as something relevant to the Actiblizz acquisition.
When some in the forum (and Microsoft themselves) bring up their "3rd Place" status...or how far they are from PlayStation...as a reason why something like this is need... for competition, I don't have sympathy. They got themselves in that scenario with decisions they made for Xbox One..and after that imo.
They have money to start as MANY studios as they want...and start and fail...and keep going until they get successful stories like Playground Games. How many times have we seen Sony shut down studios every gen (as much as I hate it)... then start again, or invest to eventually buying studios they have worked with.
As much as I love Ninja Theory's games... I wasn't too mad when they were bought. Felt I could finally see what they can do without feeling constrained by money. So I'm cool with those and Obsidian..etc.
But buying a huge Publisher with a bunch of studios? Then a second Huge Publisher?
I'm probably one of the few folks that thinks about game engines.. but I still feel the disappointment of when EA bought Criterion along with RenderWare (felt EA should have had to sell off the engine, especially if they weren't going to use it)... many game series used RenderWare...and more would have that gen, if EA didn't have the rights to it.
idTech and IW Engine are some of the best first person game engines... they run great and look great on both consoles, and did on last gen consoles. But they would be under one console manufacturer going forward, and I feel that's unfortunate.
There's a lot here that seems unrelated to the topic but the overuse of ellipses make it really hard to read.
Thanks for trying to explain it to me, though.
This is just a fundamental misunderstanding of the entire console market.
The Original Xbox came in last place by the end of the generation at 24 million compared to the PS2's 158 million
The Xbox 360 came in last place by the end of the generation with 84 million sold compared to the PS3's 87.41 million
The Xbox One came in last place at the end of the generation at 58.5 million compared to the PS4's 117.2 million
The Xbox Series in all likelyhood will come in last place at the end of the generation
Microsoft has never once won a console generation. And even when Microsoft did its absolute best at the height of its sales. It was still being outsold by Sony in several regions. And the only reason the gap wasn't larger was because the PS3 came out a full year later than the Xbox at a higher original price.
So yeah, blame Microsoft for fucking up with the Xbox One all you want, it's absolutely true. But the numbers also speak for themselves by showing that their market position and mindshare has never been one of being on top. Yeah they've had some good runs at times. But even at their absolute best it couldn't beat the brand power of PlayStation. And even right now with the Xbox Series, despite have Game Pass and all the studios they've purchased and spun up from the last generation. Its still not swaying the market much in the grand scheme of things.
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There is an argument that slack had to sell to Salesforce because they couldn't take on Microsoft by themselves after Teams started being bundled into Office.
idTech started out as an engine available for external licensing and when Bethesda acquired id Software back in 2009, it became an engine reserved for studios under the Zenimax umbrella. On a purely technical basis I think idTech is an incredible engine and I would have liked it to remain available for external licensing, so I understand the sentiment behind the idea of these engines being locked up - but I recall Phil saying shortly after the Bethesda acquisition wrapped up that they were looking into what idTech could mean within the context of Xbox:
Phil Spencer Teases idTech Engine Usage by Xbox Game Studios
During today's roundtable chat, Phil Spencer heavily teased that the idTech engine will be used widely throughout the Xbox Game Studios.
wccftech.com
And I recall Digital Foundry did at one point briefly touch upon there being some value to the technology in the IW Engine and whatever engine(s) powers Blizzard games, but again, proprietary engines that do have value within the context of an acquisition but isn't something being locked away in the same vein idTech or Renderware was years before. The most interesting thing that could happen for the engines under this hypothetical consolidated scenario where ABK/Bethesda can share resources/technology with sister Xbox studios is other studios using these engines, or these engines getting improved thanks to the additional resources (example: The Coalition " ...integrated some GPU spawning technology from Rare which helped ease the particle burden on the CPU and helped us achieve 60fps on Xbox One X."), but ultimately studios will have their reasons for using a licensed solution such as Unreal/Unity or in house technology, and I don't think proprietary engines remaining proprietary will really tip the scales in the good/bad effects of this sort of consolidation.
I'm curious what the concessions would end up being, should they be sought after.
I know the console side of things is likely CoD availability (easy to do, I think), but I'm curious about what might be asked for the cloud and mobile side of things if any.
There doesn't seem to be concern about the PC space, and I don't know that there needs to be, but wonder if there's anything there to be said as well.
King seems necessary for their mobile push (and, funny enough, their battle towards breaking up iOS and Android walled gardens). Blizzard is being Blizzard - I'm not sure what MS adds other than potentially the ability to expand into stagnant IP.
I know the console side of things is likely CoD availability (easy to do, I think), but I'm curious about what might be asked for the cloud and mobile side of things if any.
- A guaranteed Azure pricing structure to allow fair competition?
- Some "market price" guarantee on ABK games for other sub or streaming services?
- Divestments? Not just of ABK assets, but potentially other tools and services they've gained since Zenimax?
- If CoD is put under a guarantee, will a release cadence also be enforced? Can it be? If they "promise" 10 years but only release 5 games, is that true to the concession?
There doesn't seem to be concern about the PC space, and I don't know that there needs to be, but wonder if there's anything there to be said as well.
King seems necessary for their mobile push (and, funny enough, their battle towards breaking up iOS and Android walled gardens). Blizzard is being Blizzard - I'm not sure what MS adds other than potentially the ability to expand into stagnant IP.
They had momentum going into the Xbox One/PS4 gen.... the closest they have ever been. 87mil to 84mil.
I believe I've read many Xbox 360 owners say they initially switched to the PS4 early in that gen because of Microsoft's approach to the Xbox One... then later went back or bought XboxOne S/X when the messaging and priced changed. If they started that gen with that approach, I'm sure the gen would have been much closer or who knows 👀.
Again this is getting off topic... I'm going to stop on this part of it. PM me if you want.
I'll just be waiting for more news/articles/or Idas.
So the danger with the FTC block isn't that MS wasn't going to win in the end. The administrative law justice will rule in favor of the deal as they take a very conservative view of the laws and vertical mergers require imminent and extremely probable ability of foreclosure for the deal to be blocked. They ruled in favor of Grail and Illumina despite both entities having 70%+ marketshare in respective markets.
The danger is that since the case and proceedings will be long, at least an year extra to the timeline, AKB and MS will have to renegotiate the deal. If EC and CMA both approved, they likely will do so. If one of EC and CMA approved, then I'm not confident in predicting. If both CMA.and EC blocks then the deal is likely abandoned by both parties.
The danger is that since the case and proceedings will be long, at least an year extra to the timeline, AKB and MS will have to renegotiate the deal. If EC and CMA both approved, they likely will do so. If one of EC and CMA approved, then I'm not confident in predicting. If both CMA.and EC blocks then the deal is likely abandoned by both parties.
New response from MS; Nov 23th
OP
OP
Well, I finally read the whole response from MS (111 pages). So, long post incoming :p
I think that it is quite good. For starters, the tone is very different from the first one, where you could feel that they were annoyed by the decision.
From pages 13 to 69 everything is about Call of Duty: There is an insane amount of work on those pages. :O I really like how they dissect piece by piece every potential issue. And the amount of data presented is staggering.
A paragraph that I liked in this case: MS is not denying the relevance of COD, but the data doesn't automatically show that COD is the only game to attract gamers to a console or that losing it would become critical (Page 25)
While these assertions are central to the case for referral, they are not supported by any evidence. Instead, the Phase 1 Decision relies on high level points such as "CoD is currently one of the largest game franchises", "has a high level of awareness amongst gamers" and "has been consistently successful for nearly a decade". These points may all be true (as they are equally for other popular games), but do not show that the franchise is critical to attracting gamers to a console platform, nor that the loss of that one franchise would foreclose the console in question from the downstream market. No evidence has been provided to suggest that other Activision titles have any degree of market power. As above, the share of these titles is minimal ([0-5]% or less).
From pages 70 to 90 everything is about Gamepass: I think that they offer good arguments, specially the ones about ABK (extensively) being against subscriptions if there is no deal. Therefore, saying that without the merger all competitors could potentially have access to all the ABK content doesn't make a ton of sense because all the evidence points against that: without the acquisition Activision is not interested in subscription services (not even their own).
From pages 91 to 111 everything is about cloud gaming: I thought that it was the most complicated issue but they again present a ton of (internal) data, in this case to downplay cloud gaming as viable option in the short - medium term. The ecosystem theory of harm is counter-argued by also downplaying the importance of Azure for xCloud or the lack of economic incentive to 'block' similar services in the future.
All in all, a very good answer with tons and tons of data.
Anyway, I took notes of things that I believe are new and interesting:
Specific notes from the CMA
The page for the case now includes a notice that is not present in other mergers in Phase 2 (I guess that they felt some pressure):
Evidence
The publication of the evidence of any party on the CMA's webpages does not indicate in any way endorsement by the CMA of the views expressed in the evidence or acceptance of that evidence. Publication in this way is designed to assist public understanding of the issues.
On the other hand, it looks like they'll share more responses from other third parties:
The CMA received a large number of submissions from the public, which it is still in the process of reviewing, and which it will take into account, where appropriate, in the course of its merger investigation.
The future Universal Store is a risky move (pages 12-13)
As Mr. Spencer explained because of "[X]." In particular, the concept of a next- generation game store that operates across a range of devices ("Universal Store") is risky… Moving consumers away from the Google PlayStore and Apple AppStore on mobile devices will require a major shift in consumer behaviour. Microsoft hopes that by offering well-known and popular content, gamers will be more inclined to try something new. But this is far from guaranteed and also depends on proposed regulations and legislation in the U.S., and around the world, that would require Apple and Google to make their platforms and app stores more open to third-party stores and commerce platforms. As such, in seeking approval from its Board of Directors as a public company, Microsoft leadership could [X]. Nevertheless, as Mr. Spencer confirmed, Microsoft will measure the strategic success of the Merger on [X].
MAU for PlayStation and Xbox (page 35)
Publicly available data suggests that PlayStation MAUs in 2021 are more than double Xbox MAUs (107 million versus [X] million).
Steam Deck is a new console for MS (page 38)
Steam has launched a new console without Call of Duty: The Steam experience is also directly relevant to console, as Steam has recently launched a new console, the Steam Deck, without Call of Duty. The Steam Deck is a handheld console which has a docking station that allows it to be plugged into a television or used as a PC. 141 The console runs on a Linux-based operating system and allows gamers to access Windows PC games through the Steam digital storefront. In the words of Valve, "[t]he Proton translation layer allows most Windows games to run with equal or better performance on Steam OS without requiring game developers to do any heavy porting work to get their games running". This means that there are thousands of games available to play on the Steam Deck – and as explained above this does not currently include Call of Duty. Valve has promoted the Steam Deck using a range of other popular titles (including a number of Sony first-party titles) – see Figure 32 below.
The extreme levels of monetisation used by ABK regarding COD (pages 39-40)
Even though Activision has faced a strong incentive to monetize every form of exclusivity which makes sense for Call of Duty, there has been no foreclosure: Activision has had a strong incentive to come up with different forms of content and marketing exclusivity which it could monetize in its negotiations with Microsoft and Sony. Since 2005 these marketing arrangements have included: (i) exclusive console marketing arrangements following the release of new titles and downloadable content; (ii) priority access to new maps (until these were phased out following the introduction of cross- platform play); (iii) exclusive access to the online alpha version of the game and access to the beta version of the game 5 days earlier than gamers on Xbox consoles or PC; (iv) game bonuses such as extra "tier skips" on the battle pass; (v) the ability to access additional "experience points" (e.g., through exclusive events); and (vi) certain in-game character customisations and content bundles.
MS left ABK in 2015, not the other way around (page 41)
Sony was not foreclosed when Call of Duty was exclusive to Xbox: There is no indication, based on Call of Duty's prior history of differentiation between versions of Call of Duty on Xbox and PlayStation, that this could in any way affect rival consoles' ability to compete effectively. Sony's share of console sales grew in the period from 2005-2015 when Xbox had certain exclusive rights to Call of Duty content. There are many more popular games available in the market in 2022 than there were between 2005 and 2015 (including Fortnite, PUBG, Apex Legends, Elden Ring and many others). If anything, Call of Duty's importance as a franchise was greater in 2005-2015. When Xbox decided not to continue with the Call of Duty co-marketing agreement in 2015, it simply found other ways to market and promote its platform. Sony, as the market leading console with an extensive first-party and third-party exclusive game catalogue, is even better placed to do the same.
(c) Microsoft [X] Call of Duty exclusivity: Microsoft's exclusive arrangements for Call of Duty content expired at the end of 2015. (Page 31)
(d) Microsoft did not expect [X]. Microsoft did not [X], but does not believe this agreement [X]. Microsoft was not foreclosed as a result of the agreement. (Page 31)
The EMEA (Europe, the Middle East and Africa) market is where COD has more players? (Page 54)
Second, as noted in Microsoft's deal model, "continued sales of Activision Blizzard's portfolio on all platforms (console, PC, mobile)" accounted for [X] of the estimated "Value to Microsoft" from the Merger.200 Given that ca. [X]% of Call of Duty's total MAUs (and ca. [X]% of console MAUs) are on PlayStation, a hypothetical foreclosure strategy would involve putting at risk a significant portion of Activision's revenues. The consequences would be even more severe in the EMEA region where ca. [X]% of Call of Duty's total MAUs (and ca. [X]% of console MAUs) are on PlayStation. This would be a commercially irrational strategy, in particular in circumstances where Microsoft could not conceivably expect to foreclose Sony from the market.
MS is expecting to lose market share in UK
As the table below shows, Xbox in 2021 accounts for [20-30]% of the installed base of gaming consoles globally, [30-40]% in the UK, while Sony accounted for [40-50]% globally and [40-50]% in the UK – this is even excluding handheld console devices. Xbox's share of yearly sales is even lower, suggesting that its share of installed base is likely to decrease against Nintendo and Sony in the near future. The global and UK leader Sony just cannot be foreclosed by losing access to a single franchise among the broad range of alternatives for gamers available on the PlayStation platform.
20-30% of PlayStation 5 users also have an Xbox: 10-20% of Xbox users have a PlayStation 5 (page 67)
Gamers often multi-home across gaming consoles: Gamers who multi-home simultaneously own more than one gaming console. Multi-homing gamers who already own an Xbox are not impacted by a withholding of Activision content from PlayStation and/or Nintendo. They are unlikely to "abandon" their PlayStation or Nintendo console and instead simply purchase the exclusive content for their Xbox console. This severely reduces any impact on rival platforms and further hinders Microsoft ability to foreclose rivals. Third-party data procured by Microsoft in the ordinary course of business suggests that at the very least [20-30]% of PlayStation 5 users also owned an Xbox Series X/S and [X] also gamed on a PC. These metrics are as of December 2020 and are likely to have [X] at the time of this submission.
Microsoft regularly procures third-party data from NPD on console cross-ownership in the USA. The latest available data from NPD shows that in the fall of 2020, ca. [20-30]% of PlayStation 5 users also owned an Xbox Series X/S whereas [10-20]% of Xbox Series X/S users also owned a PlayStation 5. The same data also suggests that [] of PlayStation 5 and Xbox Series X/S owners also plays on their PC. The difference in share of cross-owners across consoles is likely to be explained by the ongoing semiconductor shortage caused by the COVID-19 pandemic and the fact that PlayStation 5 has witnessed a higher excess demand compared to the Xbox Series X/S. As the latest available data refers to the very beginning of the console generation, Microsoft expects the share of multi-homing console gamers to have increased materially over the course of the past months.
Users with multiple consoles generally prefer PlayStation (page 68)
In the context of a survey, Microsoft has asked gamers which of their consoles is their "favourite" to play on. Generally, gamers that multi-home across consoles have reported to prefer their PlayStation over their Xbox More specifically, in response to the question: "Of the consoles you play games on, which one is/was your favourite to play on?", [60-70]% of gamers owning an Xbox and a PlayStation have reported their favourite console to be a PlayStation – [30-40]% PlayStation 4, [20-30]% PlayStation 5, [10-20]% Xbox Series X, [10-20]% Xbox One. Of the gamers owning all three consoles, [40-50]% have reported their favourite console to be a PlayStation – [30-40]% PlayStation 5, [10-20]% PlayStation 4, [10-20]% Xbox Series X, [10-20]% Nintendo Switch, [10-20]% Nintendo Switch OLED, [0-10]% Xbox One, [0-10]% Nintendo Switch Lite.
Sony and Nintendo could allow access to Gamepass via browser but they don't want to (page 68)
Gamers can access content via the web browser on their console – if their console provider allows them to: Microsoft allows other content services to be accessed on Xbox consoles via the web browser on the console (e.g., Luna, GeForce Now and Stadia can be accessed via Xbox consoles). Other console providers would have the option to do the same and allow gamers using their consoles to access Game Pass through the console browser. In that scenario, gamers would be able to access content which is exclusive to Game Pass without the need to purchase a new Xbox console. From a technical perspective, a gamer on any platform can access Game Pass, as long as the platform supports a modern implementation of a chromium-based browser and does not block the site. Game Pass is available via the browsers on increasing range of other devices, including Valve's Steam Deck, Razer and Logitech handheld gaming devices, the Meta Quest platform, new Samsung smart TVs, and Google Chromebooks. Sony and Nintendo do not currently allow gamers on their platforms to access Game Pass or other gaming services via the browsers on their consoles – but could easily do so.
The potential problems of having content from ABK on Gamepass (page 70)
The reality is that Activision content is present today on multi-game subscriptions only to a very limited extent. For reasons previously explained and reiterated below, publishers like Activision have conflicting incentives when it comes to the economics of placing their content on multi-game subscription services. Moreover, Microsoft would have to navigate current contractual restrictions to place Activision content into Game Pass. However, the intention of improving Game Pass with the inclusion Activision content would be to differentiate the service give gamers the benefit of accessing these titles more cheaply via a subscription.
ABK seems to be "against" subscription services and cloud gaming (page 76)
Activision has never published any newer content on multi-game subscription services and has no intention to do so in the future.
This stance is reflected in statements made by Activision's senior leadership, who in recent Investigational Hearings with the FTC in relation to the Merger have stated on the record that [X]. The Parties specifically note that:
(a) Bobby Kotick, CEO of Activision stated that [X]. Specifically, Mr. Kotick stated that [X]. Mr. Kotick was even more unequivocal in his position on cloud streaming, calling it [X]. Regarding the technical requirements, Mr. Kotick stated that even if latency and control issues could be improved, he considered that game developers were [X]. Likewise, Mr. Kotick stated [X]. For the reasons stated above, Mr. Kotick considered cloud-based game streaming to be [X].
(b) Mr. Kotick's position has been reiterated by numerous other senior leadership figures in Activision. Mike Ybarra, President of Blizzard Entertainment, stated that [X]. Additionally, Mike confirmed that [X]. Moreover, with regards to cloud-based game streaming, Mr. Ybarra stated that [X]. Mr. Ybarra stated that [X]. Mr. Ybarra has stated his view that [X].
World of Warcraft likely not coming to Gamepass (page 78)
A large component of Activision's share of PC game publishing is due to World of Warcraft, a single-game subscription title that is not part of any multi-game subscription service and would be technically very challenging to integrate into a multi-game subscription service.
Gamepass was expected to be around 35 million in July 2022 (page 82)
Since its launch in 2017, Game Pass has gradually grown to approximately 25 million subscribers. As above, this is 10 million fewer subscribers (28%) than what was forecasted for Fiscal Year 2022.
A bit more about Sony preventing games from being included on Gamepass (page 85)
Any potential growth of Game Pass, whether or not it elicits competitive response from Sony, would only be beneficial to gamers. For completeness, Microsoft is aware that Sony has secured contractual rights to prevent games from a number of publishers from being included on Game Pass. Sony engages in conduct today which is reflective of its market power in multi-game subscriptions, including charging a significant pricing premium for its subscription services without fear of losing share in either subscriptions or consoles, as well as restrictive provisions in its agreements with publishers. Accordingly, any concerns raised by Sony in relation to the potential impact of the Merger on multi-game subscription services must acknowledge this conduct, which suggests that Sony has prioritised its own profits, rather than benefits to gamers.
For example, Microsoft understands that [X]. 👀
PC Gamepass having a small market share (page 89)
While Microsoft's share of revenue generated by multi-game subscriptions services on PC is [X] than the Parties' share of game publishing on PC, these should not be taken as an indication that anticompetitive effects are likely to arise from any strategy involving the withholding of Activision's games from rival services. It is not appropriate to sub-segment the PC gaming segment and carve out subscription services. As explained, these are just another means of paying for gaming content and do not represent a meaningfully different offering from a demand-side perspective. Game Pass' share is miniscule on PC: the overall revenue from subscription services on PC accounts for less than [X]% of the global PC gaming segment and [X]% in the UK. The beta for PC Game Pass was only launched in June 2019 and Microsoft has not seen any evidence of a cannibalisation effect in PC gaming to date. Microsoft notes that its share of distribution in PC games is limited in any event (ca. [X]% in the UK in 2021).
xCloud numbers are really small? (Page 92) We don't know the numbers, but I guess that they wouldn't frame them this way if they were good.
In December 2021, there were only around [X] million MAUs on xCloud worldwide, representing [X]% of total Xbox MAUs in the same period. These proportions are even smaller if one considers the percentage of game time: the total game-time on xCloud is only [X]% of the total game-time on Xbox console in 2021, and only [X]% in 2022. Over January - March 2022 the average share of xCloud MAUs to Xbox MAUs was [X]%
Fortnite on xCloud is having worse numbers than MS expected (page 94)
While cloud gaming on mobile may grow, adoption is not expected to be rapid as it requires a significant change in consumer behaviour. Research published by the CMA shows that, both worldwide and in the UK, where cloud gaming app users had a choice between a provider's native or web app on Android, around 99% of users used the native app, with 1% using either the web app or a combination of the web and native app. Microsoft's experience with adding Fortnite on Xbox Cloud Gaming illustrates these challenges.
Microsoft added cloud gaming as a feature of its top-tier subscription service offer, Game Pass Ultimate (which also includes the multi-player functionality of Xbox Live Gold) in September 2020. Yet, more than two years later, Xbox Cloud Gaming is still available as a "beta", meaning that it is still in second- stage testing.
(b) At launch, Microsoft was hopeful that [X].373 But even then, Microsoft understood [X].374 The 'market signal' Microsoft received, [X].
(c) Fortnite was launched as a free-to-play game on Xbox Cloud Gaming in May 2022. 375 As the game was free-to-play and available separately from Game Pass, Microsoft was relatively optimistic as to the number of potential users of the service. [X].
(d) As shown by Figure 53 below, the number of players on Fortnite on Xbox Cloud Gaming [X].
Premium COD maybe not be coming to xCloud because that would damage COD: Mobile (pages 102-103)
As outlined above, Activision has developed a native mobile version, Call of Duty: Mobile. Since its launch in 2019, Call of Duty: Mobile has been extremely successful and has MAUs of ca. [X] million, ca. [X]% of the total MAUs of the franchise. Call of Duty: Mobile is available via the App Store and Google Play Store. Because of the success of Call of Duty: Mobile, the inclusion of Call of Duty on Xbox Cloud Gaming would be likely to cause consumer confusion and damage the Call of Duty: Mobile brand (particularly as the user experience and game-play would be different between the two versions).
As noted above, minimising latency is critical to the gamer experience and high latency can have a significant detrimental effect on the quality of gameplay, particularly for competitive multiplayer gameplay – a central element of the appeal of Call of Duty. As such, if Call of Duty were offered over a cloud streaming service, players would [X] particularly given the success of Call of Duty: Mobile (i.e., the native mobile version of the game).
Azure is not optimised for gaming (page 104)
Azure has a limited number of data centres in the UK: Azure provides IaaS from a limited number of [X] data centres in the UK. The locations of Azure's data centres are optimized for enterprise customers, not gaming customers. Azure GPU optimised servers suitable for cloud gaming are located at third- party data centres in London. Azure does not, therefore, offer a broader footprint in the UK than its competitors.
Cloud gaming is losing money for MS right now (page 107)
Microsoft has no history of using Windows OS to target cloud gaming providers: Cloud gaming providers such as Amazon, Google and Nvidia have been SPLA partners for many years. Microsoft has not withheld access to the SPLA program, nor has it degraded access to Windows Server under SPLA in the past. The revenue Microsoft receives from licensing Windows Server via SPLA is substantial at ca. USD [X] billion [X] (equating to approximately [X]% of SPLA revenues) and it is not credible that Microsoft would forgo this revenue in order to protect its position in cloud gaming which does not generate material revenues and is loss-making.
I think that it is quite good. For starters, the tone is very different from the first one, where you could feel that they were annoyed by the decision.
From pages 13 to 69 everything is about Call of Duty: There is an insane amount of work on those pages. :O I really like how they dissect piece by piece every potential issue. And the amount of data presented is staggering.
A paragraph that I liked in this case: MS is not denying the relevance of COD, but the data doesn't automatically show that COD is the only game to attract gamers to a console or that losing it would become critical (Page 25)
While these assertions are central to the case for referral, they are not supported by any evidence. Instead, the Phase 1 Decision relies on high level points such as "CoD is currently one of the largest game franchises", "has a high level of awareness amongst gamers" and "has been consistently successful for nearly a decade". These points may all be true (as they are equally for other popular games), but do not show that the franchise is critical to attracting gamers to a console platform, nor that the loss of that one franchise would foreclose the console in question from the downstream market. No evidence has been provided to suggest that other Activision titles have any degree of market power. As above, the share of these titles is minimal ([0-5]% or less).
From pages 70 to 90 everything is about Gamepass: I think that they offer good arguments, specially the ones about ABK (extensively) being against subscriptions if there is no deal. Therefore, saying that without the merger all competitors could potentially have access to all the ABK content doesn't make a ton of sense because all the evidence points against that: without the acquisition Activision is not interested in subscription services (not even their own).
From pages 91 to 111 everything is about cloud gaming: I thought that it was the most complicated issue but they again present a ton of (internal) data, in this case to downplay cloud gaming as viable option in the short - medium term. The ecosystem theory of harm is counter-argued by also downplaying the importance of Azure for xCloud or the lack of economic incentive to 'block' similar services in the future.
All in all, a very good answer with tons and tons of data.
Anyway, I took notes of things that I believe are new and interesting:
Specific notes from the CMA
The page for the case now includes a notice that is not present in other mergers in Phase 2 (I guess that they felt some pressure):
Evidence
The publication of the evidence of any party on the CMA's webpages does not indicate in any way endorsement by the CMA of the views expressed in the evidence or acceptance of that evidence. Publication in this way is designed to assist public understanding of the issues.
On the other hand, it looks like they'll share more responses from other third parties:
The CMA received a large number of submissions from the public, which it is still in the process of reviewing, and which it will take into account, where appropriate, in the course of its merger investigation.
The future Universal Store is a risky move (pages 12-13)
As Mr. Spencer explained because of "[X]." In particular, the concept of a next- generation game store that operates across a range of devices ("Universal Store") is risky… Moving consumers away from the Google PlayStore and Apple AppStore on mobile devices will require a major shift in consumer behaviour. Microsoft hopes that by offering well-known and popular content, gamers will be more inclined to try something new. But this is far from guaranteed and also depends on proposed regulations and legislation in the U.S., and around the world, that would require Apple and Google to make their platforms and app stores more open to third-party stores and commerce platforms. As such, in seeking approval from its Board of Directors as a public company, Microsoft leadership could [X]. Nevertheless, as Mr. Spencer confirmed, Microsoft will measure the strategic success of the Merger on [X].
MAU for PlayStation and Xbox (page 35)
Publicly available data suggests that PlayStation MAUs in 2021 are more than double Xbox MAUs (107 million versus [X] million).
Steam Deck is a new console for MS (page 38)
Steam has launched a new console without Call of Duty: The Steam experience is also directly relevant to console, as Steam has recently launched a new console, the Steam Deck, without Call of Duty. The Steam Deck is a handheld console which has a docking station that allows it to be plugged into a television or used as a PC. 141 The console runs on a Linux-based operating system and allows gamers to access Windows PC games through the Steam digital storefront. In the words of Valve, "[t]he Proton translation layer allows most Windows games to run with equal or better performance on Steam OS without requiring game developers to do any heavy porting work to get their games running". This means that there are thousands of games available to play on the Steam Deck – and as explained above this does not currently include Call of Duty. Valve has promoted the Steam Deck using a range of other popular titles (including a number of Sony first-party titles) – see Figure 32 below.
The extreme levels of monetisation used by ABK regarding COD (pages 39-40)
Even though Activision has faced a strong incentive to monetize every form of exclusivity which makes sense for Call of Duty, there has been no foreclosure: Activision has had a strong incentive to come up with different forms of content and marketing exclusivity which it could monetize in its negotiations with Microsoft and Sony. Since 2005 these marketing arrangements have included: (i) exclusive console marketing arrangements following the release of new titles and downloadable content; (ii) priority access to new maps (until these were phased out following the introduction of cross- platform play); (iii) exclusive access to the online alpha version of the game and access to the beta version of the game 5 days earlier than gamers on Xbox consoles or PC; (iv) game bonuses such as extra "tier skips" on the battle pass; (v) the ability to access additional "experience points" (e.g., through exclusive events); and (vi) certain in-game character customisations and content bundles.
MS left ABK in 2015, not the other way around (page 41)
Sony was not foreclosed when Call of Duty was exclusive to Xbox: There is no indication, based on Call of Duty's prior history of differentiation between versions of Call of Duty on Xbox and PlayStation, that this could in any way affect rival consoles' ability to compete effectively. Sony's share of console sales grew in the period from 2005-2015 when Xbox had certain exclusive rights to Call of Duty content. There are many more popular games available in the market in 2022 than there were between 2005 and 2015 (including Fortnite, PUBG, Apex Legends, Elden Ring and many others). If anything, Call of Duty's importance as a franchise was greater in 2005-2015. When Xbox decided not to continue with the Call of Duty co-marketing agreement in 2015, it simply found other ways to market and promote its platform. Sony, as the market leading console with an extensive first-party and third-party exclusive game catalogue, is even better placed to do the same.
(c) Microsoft [X] Call of Duty exclusivity: Microsoft's exclusive arrangements for Call of Duty content expired at the end of 2015. (Page 31)
(d) Microsoft did not expect [X]. Microsoft did not [X], but does not believe this agreement [X]. Microsoft was not foreclosed as a result of the agreement. (Page 31)
The EMEA (Europe, the Middle East and Africa) market is where COD has more players? (Page 54)
Second, as noted in Microsoft's deal model, "continued sales of Activision Blizzard's portfolio on all platforms (console, PC, mobile)" accounted for [X] of the estimated "Value to Microsoft" from the Merger.200 Given that ca. [X]% of Call of Duty's total MAUs (and ca. [X]% of console MAUs) are on PlayStation, a hypothetical foreclosure strategy would involve putting at risk a significant portion of Activision's revenues. The consequences would be even more severe in the EMEA region where ca. [X]% of Call of Duty's total MAUs (and ca. [X]% of console MAUs) are on PlayStation. This would be a commercially irrational strategy, in particular in circumstances where Microsoft could not conceivably expect to foreclose Sony from the market.
MS is expecting to lose market share in UK
As the table below shows, Xbox in 2021 accounts for [20-30]% of the installed base of gaming consoles globally, [30-40]% in the UK, while Sony accounted for [40-50]% globally and [40-50]% in the UK – this is even excluding handheld console devices. Xbox's share of yearly sales is even lower, suggesting that its share of installed base is likely to decrease against Nintendo and Sony in the near future. The global and UK leader Sony just cannot be foreclosed by losing access to a single franchise among the broad range of alternatives for gamers available on the PlayStation platform.
20-30% of PlayStation 5 users also have an Xbox: 10-20% of Xbox users have a PlayStation 5 (page 67)
Gamers often multi-home across gaming consoles: Gamers who multi-home simultaneously own more than one gaming console. Multi-homing gamers who already own an Xbox are not impacted by a withholding of Activision content from PlayStation and/or Nintendo. They are unlikely to "abandon" their PlayStation or Nintendo console and instead simply purchase the exclusive content for their Xbox console. This severely reduces any impact on rival platforms and further hinders Microsoft ability to foreclose rivals. Third-party data procured by Microsoft in the ordinary course of business suggests that at the very least [20-30]% of PlayStation 5 users also owned an Xbox Series X/S and [X] also gamed on a PC. These metrics are as of December 2020 and are likely to have [X] at the time of this submission.
Microsoft regularly procures third-party data from NPD on console cross-ownership in the USA. The latest available data from NPD shows that in the fall of 2020, ca. [20-30]% of PlayStation 5 users also owned an Xbox Series X/S whereas [10-20]% of Xbox Series X/S users also owned a PlayStation 5. The same data also suggests that [] of PlayStation 5 and Xbox Series X/S owners also plays on their PC. The difference in share of cross-owners across consoles is likely to be explained by the ongoing semiconductor shortage caused by the COVID-19 pandemic and the fact that PlayStation 5 has witnessed a higher excess demand compared to the Xbox Series X/S. As the latest available data refers to the very beginning of the console generation, Microsoft expects the share of multi-homing console gamers to have increased materially over the course of the past months.
Users with multiple consoles generally prefer PlayStation (page 68)
In the context of a survey, Microsoft has asked gamers which of their consoles is their "favourite" to play on. Generally, gamers that multi-home across consoles have reported to prefer their PlayStation over their Xbox More specifically, in response to the question: "Of the consoles you play games on, which one is/was your favourite to play on?", [60-70]% of gamers owning an Xbox and a PlayStation have reported their favourite console to be a PlayStation – [30-40]% PlayStation 4, [20-30]% PlayStation 5, [10-20]% Xbox Series X, [10-20]% Xbox One. Of the gamers owning all three consoles, [40-50]% have reported their favourite console to be a PlayStation – [30-40]% PlayStation 5, [10-20]% PlayStation 4, [10-20]% Xbox Series X, [10-20]% Nintendo Switch, [10-20]% Nintendo Switch OLED, [0-10]% Xbox One, [0-10]% Nintendo Switch Lite.
Sony and Nintendo could allow access to Gamepass via browser but they don't want to (page 68)
Gamers can access content via the web browser on their console – if their console provider allows them to: Microsoft allows other content services to be accessed on Xbox consoles via the web browser on the console (e.g., Luna, GeForce Now and Stadia can be accessed via Xbox consoles). Other console providers would have the option to do the same and allow gamers using their consoles to access Game Pass through the console browser. In that scenario, gamers would be able to access content which is exclusive to Game Pass without the need to purchase a new Xbox console. From a technical perspective, a gamer on any platform can access Game Pass, as long as the platform supports a modern implementation of a chromium-based browser and does not block the site. Game Pass is available via the browsers on increasing range of other devices, including Valve's Steam Deck, Razer and Logitech handheld gaming devices, the Meta Quest platform, new Samsung smart TVs, and Google Chromebooks. Sony and Nintendo do not currently allow gamers on their platforms to access Game Pass or other gaming services via the browsers on their consoles – but could easily do so.
The potential problems of having content from ABK on Gamepass (page 70)
The reality is that Activision content is present today on multi-game subscriptions only to a very limited extent. For reasons previously explained and reiterated below, publishers like Activision have conflicting incentives when it comes to the economics of placing their content on multi-game subscription services. Moreover, Microsoft would have to navigate current contractual restrictions to place Activision content into Game Pass. However, the intention of improving Game Pass with the inclusion Activision content would be to differentiate the service give gamers the benefit of accessing these titles more cheaply via a subscription.
ABK seems to be "against" subscription services and cloud gaming (page 76)
Activision has never published any newer content on multi-game subscription services and has no intention to do so in the future.
This stance is reflected in statements made by Activision's senior leadership, who in recent Investigational Hearings with the FTC in relation to the Merger have stated on the record that [X]. The Parties specifically note that:
(a) Bobby Kotick, CEO of Activision stated that [X]. Specifically, Mr. Kotick stated that [X]. Mr. Kotick was even more unequivocal in his position on cloud streaming, calling it [X]. Regarding the technical requirements, Mr. Kotick stated that even if latency and control issues could be improved, he considered that game developers were [X]. Likewise, Mr. Kotick stated [X]. For the reasons stated above, Mr. Kotick considered cloud-based game streaming to be [X].
(b) Mr. Kotick's position has been reiterated by numerous other senior leadership figures in Activision. Mike Ybarra, President of Blizzard Entertainment, stated that [X]. Additionally, Mike confirmed that [X]. Moreover, with regards to cloud-based game streaming, Mr. Ybarra stated that [X]. Mr. Ybarra stated that [X]. Mr. Ybarra has stated his view that [X].
World of Warcraft likely not coming to Gamepass (page 78)
A large component of Activision's share of PC game publishing is due to World of Warcraft, a single-game subscription title that is not part of any multi-game subscription service and would be technically very challenging to integrate into a multi-game subscription service.
Gamepass was expected to be around 35 million in July 2022 (page 82)
Since its launch in 2017, Game Pass has gradually grown to approximately 25 million subscribers. As above, this is 10 million fewer subscribers (28%) than what was forecasted for Fiscal Year 2022.
A bit more about Sony preventing games from being included on Gamepass (page 85)
Any potential growth of Game Pass, whether or not it elicits competitive response from Sony, would only be beneficial to gamers. For completeness, Microsoft is aware that Sony has secured contractual rights to prevent games from a number of publishers from being included on Game Pass. Sony engages in conduct today which is reflective of its market power in multi-game subscriptions, including charging a significant pricing premium for its subscription services without fear of losing share in either subscriptions or consoles, as well as restrictive provisions in its agreements with publishers. Accordingly, any concerns raised by Sony in relation to the potential impact of the Merger on multi-game subscription services must acknowledge this conduct, which suggests that Sony has prioritised its own profits, rather than benefits to gamers.
For example, Microsoft understands that [X]. 👀
PC Gamepass having a small market share (page 89)
While Microsoft's share of revenue generated by multi-game subscriptions services on PC is [X] than the Parties' share of game publishing on PC, these should not be taken as an indication that anticompetitive effects are likely to arise from any strategy involving the withholding of Activision's games from rival services. It is not appropriate to sub-segment the PC gaming segment and carve out subscription services. As explained, these are just another means of paying for gaming content and do not represent a meaningfully different offering from a demand-side perspective. Game Pass' share is miniscule on PC: the overall revenue from subscription services on PC accounts for less than [X]% of the global PC gaming segment and [X]% in the UK. The beta for PC Game Pass was only launched in June 2019 and Microsoft has not seen any evidence of a cannibalisation effect in PC gaming to date. Microsoft notes that its share of distribution in PC games is limited in any event (ca. [X]% in the UK in 2021).
xCloud numbers are really small? (Page 92) We don't know the numbers, but I guess that they wouldn't frame them this way if they were good.
In December 2021, there were only around [X] million MAUs on xCloud worldwide, representing [X]% of total Xbox MAUs in the same period. These proportions are even smaller if one considers the percentage of game time: the total game-time on xCloud is only [X]% of the total game-time on Xbox console in 2021, and only [X]% in 2022. Over January - March 2022 the average share of xCloud MAUs to Xbox MAUs was [X]%
Fortnite on xCloud is having worse numbers than MS expected (page 94)
While cloud gaming on mobile may grow, adoption is not expected to be rapid as it requires a significant change in consumer behaviour. Research published by the CMA shows that, both worldwide and in the UK, where cloud gaming app users had a choice between a provider's native or web app on Android, around 99% of users used the native app, with 1% using either the web app or a combination of the web and native app. Microsoft's experience with adding Fortnite on Xbox Cloud Gaming illustrates these challenges.
Microsoft added cloud gaming as a feature of its top-tier subscription service offer, Game Pass Ultimate (which also includes the multi-player functionality of Xbox Live Gold) in September 2020. Yet, more than two years later, Xbox Cloud Gaming is still available as a "beta", meaning that it is still in second- stage testing.
(b) At launch, Microsoft was hopeful that [X].373 But even then, Microsoft understood [X].374 The 'market signal' Microsoft received, [X].
(c) Fortnite was launched as a free-to-play game on Xbox Cloud Gaming in May 2022. 375 As the game was free-to-play and available separately from Game Pass, Microsoft was relatively optimistic as to the number of potential users of the service. [X].
(d) As shown by Figure 53 below, the number of players on Fortnite on Xbox Cloud Gaming [X].
Premium COD maybe not be coming to xCloud because that would damage COD: Mobile (pages 102-103)
As outlined above, Activision has developed a native mobile version, Call of Duty: Mobile. Since its launch in 2019, Call of Duty: Mobile has been extremely successful and has MAUs of ca. [X] million, ca. [X]% of the total MAUs of the franchise. Call of Duty: Mobile is available via the App Store and Google Play Store. Because of the success of Call of Duty: Mobile, the inclusion of Call of Duty on Xbox Cloud Gaming would be likely to cause consumer confusion and damage the Call of Duty: Mobile brand (particularly as the user experience and game-play would be different between the two versions).
As noted above, minimising latency is critical to the gamer experience and high latency can have a significant detrimental effect on the quality of gameplay, particularly for competitive multiplayer gameplay – a central element of the appeal of Call of Duty. As such, if Call of Duty were offered over a cloud streaming service, players would [X] particularly given the success of Call of Duty: Mobile (i.e., the native mobile version of the game).
Azure is not optimised for gaming (page 104)
Azure has a limited number of data centres in the UK: Azure provides IaaS from a limited number of [X] data centres in the UK. The locations of Azure's data centres are optimized for enterprise customers, not gaming customers. Azure GPU optimised servers suitable for cloud gaming are located at third- party data centres in London. Azure does not, therefore, offer a broader footprint in the UK than its competitors.
Cloud gaming is losing money for MS right now (page 107)
Microsoft has no history of using Windows OS to target cloud gaming providers: Cloud gaming providers such as Amazon, Google and Nvidia have been SPLA partners for many years. Microsoft has not withheld access to the SPLA program, nor has it degraded access to Windows Server under SPLA in the past. The revenue Microsoft receives from licensing Windows Server via SPLA is substantial at ca. USD [X] billion [X] (equating to approximately [X]% of SPLA revenues) and it is not credible that Microsoft would forgo this revenue in order to protect its position in cloud gaming which does not generate material revenues and is loss-making.
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