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Well the deadline for MS to submit remedies to the EU is tomorrow, so it makes sense for Politico to highlight that. These deals are clearly relevant to both markets and help address both the EC's and CMA's concerns.
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Footnote 3 on page 2 of the FTC's motion says that Microsoft has already supplied 2.6M documents and ABK over 1M documents. This is definitely not them saying no to everything. It's probably a strategy delay tactic (like Sony did in response to MSFT's subpoena) and likely has to do with the fight over them having already complied and likely will end up being argued as duplicative because the FTC can't find what they want in 3.6M documents.
Bro, they killed that last week. Google has a quota of projects to kill and by god they'll deliver.
Just to be annoying, its "have your cake and eat it too" otherwise yeah, that would be the correct way to cook/consume cake 😆
I assume this is correct, but was wondering if you have a source for this regarding CMA's remedy process where negotiating is happening (counter proposals, etc. provided) with Microsoft right now?
I haven't seen anything clearly laying that out myself and also asked Idas & Pixis but unfortunately never got a reply.
I heard / read somewhere that it used to be eat your cake and have it too.
Dumb aside, but as a native English speaker this phrase used to confuse the hell out of me. I use "have" to mean "eat", like "We're having pizza for dinner." "I want to have a sandwich." I never stood around holding a cake, declaring to the world "I have cake!" I would certainly offer cake to someone (for eating!) by saying "have some cake!"
So it always reads to me as "eat your cake and eat it too." Wish it were "eat your cake and keep it too" or something.
I approve of the latest cake-based turn in this wild saga of a era thread.
As for the far less interesting developments of ABK, I think it's fair and not at all surprising that MS would want to keep some details confidential and has understandable reasons not to release trade secrets if they don't need to, while also that FTC would want some of them and probably has some pretty good legal basis for at least some of them. It will undoubtedly result in some additional documents being given to the FTC by MS. And I see nothing wrong with any of that. From the little information we've been given [about strictly this topic in particular], I would resist the impulse to paint one side or the other as villains or fools or schemers. Seems pretty reasonable on all sides IMO for now.
As for the far less interesting developments of ABK, I think it's fair and not at all surprising that MS would want to keep some details confidential and has understandable reasons not to release trade secrets if they don't need to, while also that FTC would want some of them and probably has some pretty good legal basis for at least some of them. It will undoubtedly result in some additional documents being given to the FTC by MS. And I see nothing wrong with any of that. From the little information we've been given [about strictly this topic in particular], I would resist the impulse to paint one side or the other as villains or fools or schemers. Seems pretty reasonable on all sides IMO for now.
Haha, brainfart on my end. I knew something was wrong with it, but I couldn't for the life of me figure it out.
The cake is a lie.
As it should be. It boggles the mind that people write, "have your cake and eat it", well duh, how else am I going to eat my cake if I don't have it? But if you eat your cake, you don't also have it.
It's amazing to think of the cost of all that. Figure every page is checked by multiple people on the sending and receiving end, some of them at very high hourly rates, and even the lower paid staffers at a law firm will no doubt have a large per hour premium by the time MS gets the bill.
Feels a little hypocritical of the FTC to say "we're not going to engage with you, we're not going to even give you a chance to explain or speak. But yeah, give me these docs you just signed, after we already blocked you because of political ideology, so we can attempt to poke holes in them to try to influence foreign agencies again".
If Microsoft's strategy is to close the deal and force the FTC to file an injunction, why would they give the FTC anything until then?
If Microsoft's strategy is to close the deal and force the FTC to file an injunction, why would they give the FTC anything until then?
I believe it was Idas that said there will be back and forth discussions until the deadline (the beginning of April but I'm not sure of the date off the top of my head).
GeForce now isn't really a direct competitor to xCloud, I'd argue. The difference between "cloud service for playing PC games you already own" versus "cloud service for playing a large library of console games bundled with the sub" is pretty vast.
Beyond that, GeForce Now, Boosteroid, and Ubitus aren't platforms, in the same way you would consider Xbox or Playstation gaming platforms. You don't buy games you can only play on GeForce Now, nor do developers have to make new builds of their game for the service. They're just services for playing games on a cloud server. Luna is closer to a proper platform, with purchases that only count for playing games through it, which I'm guessing is the dividing line for if Microsoft would make a deal with them.
The new Microsoft deals are targeted at ALL regulators.
1. We have an article saying the EC will probably approve. We should not take it as a known fact that they will definitely approve. Likely is not definitive. Microsoft will not take that as a known fact, and will instead work to make it a fact until a decision one way or another is in their hands.
2. EC approving with the biggest tolerable behavioral remedies is a component of Microsoft's best path to CMA approval with purely behavioral remedies.
3. Creating Related Consumer Benefits that would not exist without the deal or with divestment is a component of Microsoft's best path to approval by the CMA. These deals arguably create those. (There are counter-arguments available should the CMA be inclined to disagree.)
4. One of the four biggest weaknesses of the FTC case for an injunction or on appeal of a final agency decision is that merging/acquiring parties don't have to argue that the deal alone isn't anti-competitive. They can argue that the deal combined with the proposed remedies are not anti-competitive. (The so called "litigate the fix" strategy has yielded wins for merging parties before.) Accordingly, these deals weaken the FTC's case in Federal Court.
5. The big 3 competition agencies have yet to rule, but approval by any of them increases the chances of approval by others, to wit: CMA is the harshest and hardest to appeal. Approval there means a disapproval anywhere else is absolutely headed for litigation until a complete exhaustion of remedies. EC approval likely comes with remedies and enforcement that other agencies can lean on, and won't necessarily want to discount the meaningfulness of. FTC approval would change the optics/politics. It is one thing for the EC or CMA to block one US company from buying another US company when the US government opposes the merger. It is a different thing to do when the US government supports it. Of course, these agencies have the power to do it, but they are also cognizant of the fact that the shoe will eventually be on the other foot, and there is some level of mutual respect among regulators.
6. Apart from purely regional remedies, which don't appear to remotely be a consideration at this point, it is my impression that every shot is aimed at three targets.
7. Yes, the CMA is still probably ultimately the most important of those targets.
1. We have an article saying the EC will probably approve. We should not take it as a known fact that they will definitely approve. Likely is not definitive. Microsoft will not take that as a known fact, and will instead work to make it a fact until a decision one way or another is in their hands.
2. EC approving with the biggest tolerable behavioral remedies is a component of Microsoft's best path to CMA approval with purely behavioral remedies.
3. Creating Related Consumer Benefits that would not exist without the deal or with divestment is a component of Microsoft's best path to approval by the CMA. These deals arguably create those. (There are counter-arguments available should the CMA be inclined to disagree.)
4. One of the four biggest weaknesses of the FTC case for an injunction or on appeal of a final agency decision is that merging/acquiring parties don't have to argue that the deal alone isn't anti-competitive. They can argue that the deal combined with the proposed remedies are not anti-competitive. (The so called "litigate the fix" strategy has yielded wins for merging parties before.) Accordingly, these deals weaken the FTC's case in Federal Court.
5. The big 3 competition agencies have yet to rule, but approval by any of them increases the chances of approval by others, to wit: CMA is the harshest and hardest to appeal. Approval there means a disapproval anywhere else is absolutely headed for litigation until a complete exhaustion of remedies. EC approval likely comes with remedies and enforcement that other agencies can lean on, and won't necessarily want to discount the meaningfulness of. FTC approval would change the optics/politics. It is one thing for the EC or CMA to block one US company from buying another US company when the US government opposes the merger. It is a different thing to do when the US government supports it. Of course, these agencies have the power to do it, but they are also cognizant of the fact that the shoe will eventually be on the other foot, and there is some level of mutual respect among regulators.
6. Apart from purely regional remedies, which don't appear to remotely be a consideration at this point, it is my impression that every shot is aimed at three targets.
7. Yes, the CMA is still probably ultimately the most important of those targets.
This is fun. Tencent makes a lot of money, huh? Not sure what the context of this is, exactly though. Maybe just to underscore MS's point that it's focused on mobile? Unclear.
View: https://twitter.com/DeekeTweak/status/1636101387653136384
jk jk said something dumb. Replacement: Apple's mobile gaming revenues is almost as much as all of Xbox o.o Which means Apple's profits have to be THROUGH THE ROOF.
View: https://twitter.com/DeekeTweak/status/1636101387653136384
jk jk said something dumb. Replacement: Apple's mobile gaming revenues is almost as much as all of Xbox o.o Which means Apple's profits have to be THROUGH THE ROOF.
I think the point Microsoft is trying to make here is that the gaming industry is so much larger than regulators are giving it credit for. That they are so hyper focused on this one specific detail of Call of Duty on consoles that they are completely ignoring the rest of the industry in the process. To the point that they're stabbing themselves in the foot on other more "valid" of worthwhile sectors of the Gaming Industry that desperately need to be looked at.
Or to put another way. They're not seeing the forest for the trees.
I'm kinda surprised Apple makes more than Google, considering Android has a way larger marketshare worldwide. I wonder what causes the difference.
Android users just spend less on apps is all. And what they do spend isn't guaranteed to go through the Google Play Store.
If a developer wants to use their own payment processer, they can. And they aren't forced to do subscriptions through the playstore like on iOS so they don't get a chunk of other services (like Netflix, Audible and such). So in a sense you can say Google does less forced nickel and dining that would allow them to pump their numbers up.
OP
OP
The process for remedies works like this:
1) The CMA suggests remedies with the provisional findings (this is the starting point).
2) The merger parties and even third parties engage in multiple meetings and hearings with the CMA to discuss the remedies suggested and propose new ones.
3) The CMA will send MS/ABK a remedies working paper with its provisional decision on remedies.
4) MS/ABK will have at least a week to respond to the remedies working paper. Third parties could also be consulted.
5) More meetings could happen following the consultation of the remedies working paper. After that, the CMA will decide the basic outline of the remedies to implement.
The final report will include a notice of final undertakings (remedies) adopted by the CMA. By then only the implementation of those remedies can be negotiated (or ordered if the parties don't agree).
My guess is that right now MS/ABK are at stage 2 (discussing the proposed remedies and suggesting new ones). I think that by the end of March or early April they'll be at stage 5.
Then in late April (with the publication of the final report) will have a definitive answer.
Oh I was thinking most of the revenue would be from ads, but yeah that makes sense that it's probably from in-app purchases.
Apple users spend money on apps, mostly because they have no alternative store, and the ecosystem and it users just tend to be the type that doesn't mind spending money on say, a weather app etc. Android apps that are not free don't tend to do well, and you can have other stores like Samsung, or sideload without many restrictions.
Thanks so much for the detailed breakdown Idas !
Do you think the cloud deals that they are making now are pre-emptive, so it gives them ammunition to bolster the RCB's for their proposed remedies (proactive approach)?
Or would they be reacting based on feedback from the CMA that this is what needs to be done in order for behavioral remedies to work (reactive approach)?
This merger has been a gold mine for data.
I'm shocked Tencent has grown that much, and almost as shocked that Google's Playstore transacts almost as much as Apple's App store.
Not that surprising given how ridiculously easy it is to pirate/hack games on Android.
Considering how every game that makes that revenue is a GaaS with online checks up the wazoo, this reasoning is a swing and a miss.
It's most likely that iPhone does better in countries with large spending on microtransaction games.
Yea, that's how I took it too. While Android has many more units, it wouldn't surprise me that the group of (typically rich) countries where people do a lot of mobile gaming and are most likely to spend a lot of money on those games are also where iPhone is super popular. Those areas also tend to have different attitudes towards monetization more broadly.
Just guessing, though.
Responses to the CMA provisional findings
OP
OP
The CMA published 9 responses to the provisional findings :p
- From Microsoft (84 pages)
- From Activision (20 pages)
- From Sony (10 pages)
- From 4JStudios (1 page)
- From Market participant B (1 page)
- From Market participant C (1 page)
- From Market participant D (1 page)
- From Market participant E (1 page)
- From Market participant F (1 page)
- From Microsoft (84 pages)
- From Activision (20 pages)
- From Sony (10 pages)
- From 4JStudios (1 page)
- From Market participant B (1 page)
- From Market participant C (1 page)
- From Market participant D (1 page)
- From Market participant E (1 page)
- From Market participant F (1 page)
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wake up babe new responses just dropped
very interested to check out MS' case for behavioural remedies, if they manage to sway the CMA then this is where we'll start to see how
very interested to check out MS' case for behavioural remedies, if they manage to sway the CMA then this is where we'll start to see how
Market Participent E is interesting:
We know game discovery is an issue on PlayStation; seems that Xbox's store/UI is better suited to finding non-advertised games. Seems that if your game isn't advertised/marketed by Sony, it doesn't sell as well as it could.
We know game discovery is an issue on PlayStation; seems that Xbox's store/UI is better suited to finding non-advertised games. Seems that if your game isn't advertised/marketed by Sony, it doesn't sell as well as it could.
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Maybe they know something we don't!! Naughty Dogs next game is a Superman game. You heard it here first.
A point I really like from MS's response. Seems people were right that MS would lose a lot of revenue if they took COD from Sony; they don't want that haha.
That's my gut feeling too.
That's my gut feeling too.
My summary of the smaller ones
4J - positive general but they have worked with MS and basically said MS didn't pressure them on the games that they did work on re favouring MS platforms
B - short and sweet, no must have ip
C - MS is trustworthy, consolidation especially around cloud gaming is inevitable, Tencent competition (ownership of ABK shares and the asymmetric nature of the Chinese/Western markets)
D - hard to predict the outcomes but sees No impact on their business or their ability to distribute their games on xbox or other consoles.
E - PS sales stagnating and basically glowing of Xbox, bit weird one but ehh
F - supportive of the deal, basically thinks the arguments against the acquisition is exaggerated (small dig at Sony in there). Also says employees at ABK might be better under MS.
4J - positive general but they have worked with MS and basically said MS didn't pressure them on the games that they did work on re favouring MS platforms
B - short and sweet, no must have ip
C - MS is trustworthy, consolidation especially around cloud gaming is inevitable, Tencent competition (ownership of ABK shares and the asymmetric nature of the Chinese/Western markets)
D - hard to predict the outcomes but sees No impact on their business or their ability to distribute their games on xbox or other consoles.
E - PS sales stagnating and basically glowing of Xbox, bit weird one but ehh
F - supportive of the deal, basically thinks the arguments against the acquisition is exaggerated (small dig at Sony in there). Also says employees at ABK might be better under MS.
Market Participant E's response is VERY interesting:
- Despite PS having the large majority of player base, their game sales are stagnant on Playstation and they feel it's reserved for the big AAA games. There isn't an equal playing field.
- And they say its the opposite for Xbox. Despite Xbox having much less of a player base, their games sell the same on Xbox, because there's more means for finding and playing games on the console
- They make more revenue on Xbox than Playstation, despite the player base difference, and say Xbox is a better ecosystem for finding new games
I assume this is an indie developer saying this but this is the first time i have ever heard of this.
- Despite PS having the large majority of player base, their game sales are stagnant on Playstation and they feel it's reserved for the big AAA games. There isn't an equal playing field.
- And they say its the opposite for Xbox. Despite Xbox having much less of a player base, their games sell the same on Xbox, because there's more means for finding and playing games on the console
- They make more revenue on Xbox than Playstation, despite the player base difference, and say Xbox is a better ecosystem for finding new games
I assume this is an indie developer saying this but this is the first time i have ever heard of this.
