We already have an answer from Brad Sams: Any block by regulators will be scrutinized according to the law.
3 Likes
Yes sure. But they arenât going to say otherwise at this stage. Saying in public âweâll not challenge youâ would be foolish.
The realities of what that would mean though in practice are a bit different. Iâve always felt Microsoft should do everything possible to avoid the need for a challenge here in the UK primarily because its just too expensive in terms of time and without any real precedent for success. They may well be constructing a case now - and indeed I believe they are but to use that to pressure the CMA NOW. Make them bleed now rather than necessarily dragging it all the way.
1 Like
With PS not wanting to sign a deal I wonder if theyâve considered not allowing new CoDs on PS at all. Sounds crazy right but if they do the following is possible,
Cons
- Loose revenue (they already expect to if CoD goes to GP or PS+)
Pros
- CoD gets a small player base
- CoD looses relevance as not if PS
- Less money from CoD sales
- Better change a Sony 1st Party game (Socom) has to rival CoD (due to above)
- Can say MS is mean and wanted to much money for CoD
- Gaming media would praise Sony for some reason and hate Xbox Etc
Basically I can see PS not wanting CoD if the deal passes just to diminish itâs importance. Itâs a massive risk but I could see them doing it.
It makes more sense to build a rival over a 10 year contract for sure, I can just see this happening. If Sony not having new CoD games weakens the franchise it COULD be the beginning of the end for CoD.
Playing tin fouler hat and devils advocate.
1 Like
Not wanting COD and actively preventing a rival from delivering a buy to play game and/or free to play game to your store are very different things. This would be investigated just like Apple vs Epic except it would be investigated against the EUs new digital laws. That would be a highly anti-consumer and anti-competition move.
Been over a year a still do not see any reason why this deal is harmful for consumers
Atleast for 10 years
And even after that, it will be not be different to what other platforms do now to gain market share
Whilst there really should be no way that this deal gets stopped, I still feel that CMA are going to try to protect Sony. Not because they are corrupt (in my opinion). I genuinely think they see PlayStation as a âforce for goodâ in gaming and that protecting them IS protecting consumers.
Which is totally bonkers, but stillâŠ
1 Like
I donât think its really anything to do with that. Their framework for vertical mergers is designed to manage the biggest companies in the world acquiring suppliers downstream to then control markets. This is EXACTLY the MS deal. Except the gaming market is more nuanced given that whilst Microsoft are a giant and Sony a dwarf - Microsoft donât control or even lead this market.
The whole framework the CMA work to is much more difficult to apply to this case.
Keep in mind whatâs at stake for Microsoft here - if they truly believe they need the ABK mobile content as a springboard for a successful launch of their mobile store (one the Digital Markets Act kicks in), then they will spend a year in court and money on lawyers to battle it out. CMA has not presented a reasonable theory of harm, so Microsoft will likely win in court.
Now I highly doubt MS can make a Microsoft Store successful on mobile platforms given the penetration of the store on Windows⊠But they believe they can and theyâll keep trying. Bing was the butt of the joke for years and years, but itâs also been profitable for years now and has a chance to make it big with the GPT4 hype.
1 Like
Huh this is interesting. I always thought Phil was deflecting a bit when he said âThis deal is about mobileâ but it looks like it really is. Can almost certainly believe they will fight in CAT over this if push comes to shove (which I donât think it will reading the tea leaves)
The meta-appeal didnât take that long. In fact, it took about 6 months which if applied here will still have a verdict this year.
They can protect Sony all they want as long as they approve the deal. I would think the concessions Microsoft is making already helps Sony.
It would never happen. They wouldnât just lose revenue, they would lose customers. If for some reason MS is able to get the deal through in all jurisdictions without needing to guarantee access to Sony (which seems unlikely, given theyâve already stated their willingness to), Iâd say it just gives them a little more leverage during negotiations and may be able to get closer to ABKâs original revenue split on CoD.
1 Like
Idas posted, a lot of comments I agree with. I think Microsoft making public deals and shouting like they are, will work. They wouldnât be doing it if they didnât think it had any value, it has really changed the vibe on will this deal harm the industry to will this deal even harm anyone anymore?
Edit: also this
Today the EC approved the acquisition of VOO and Brutélé by Orange.
The case itâs interesting because:
- It has been conditionally approved (after Phase 2) with access remedies.
- The provisional deadline for a decision was April 11th (remedies were offered on January 30th). Just a reminder that in the EC an announcement could come sooner than officially expected.
As Microsoft Corp. hashes out a slew of video game licenses in an effort to appease regulators scrutinizing its plan to buy Activision Blizzard for nearly $70 billion, industry sources believe the Xbox makerâs very public strategy to show it doesnât have monopolistic intentions could ultimately seal the megadeal .
Microsoft, advised by Simpson Thacher & Bartlett LLP, agreed to buy Activision Blizzard in January 2022 and now faces a triple threat of regulatory hurdles from European, U.K. and U.S. authorities.
But it will be difficult for any of the regulators to successfully oppose the Activision deal as their arguments about Microsoft monopolizing Activision titles are losing steam in the wake of the licensing deals Microsoft has announced , some attorneys and industry sources believe.
âMicrosoft is being very aggressive and proactive in demonstrating that its competition will have access to this very popular game,â said Michael Rynowecer, founder and president of legal industry consultancy BTI Consulting Group. âThey are trying to send a message that theyâre not being anti-competitive and that others can use and benefit from the game.â
Henry Su, a litigation partner with Bradley Arant Boult Cummings LLP who focuses on antitrust issues, called the licensing remedies a âgood thingâ both for market competition and for Microsoft, which will cash in on the agreements as it looks to fund the massive Activision acquisition.
"Microsoft is saying, âWeâll continue to broadly license these titles ⊠but at the same time this content is going to help us,â " Su said. He said regulators will be closely examining whether the behavioral remedies are âcomprehensive enough to address all the scenarios that could come up.â
âAs Nintendo, Nvidia and others ink deals to maintain access to the Activision catalog, it gets harder for the FTC to show that thereâs a real risk that Microsoft will use the catalog to squelch competition either in the market for game consoles or the market for game-subscription services,â Paul Swanson, a commercial litigation partner at Holland & Hart LLP, said in an email.
Kurt Ma, a corporate partner at Bryan Cave Leighton Paisner LLP, agreed and said he expects the licensing measures to help appease all three regulators. He suggested the less stringent EU and U.K. stances havenât been surprising given the current political and economic climate and that the ultimate test will lie in Microsoftâs battle with the FTC.
âWe have to remember, especially post-Brexit and given the nature of the economy at the moment, that both the EU and the UK are keen to be champions of investment and business,â said Ma in an email. âThey will be aware that this is the biggest video game M&A deal ever. They will want to be open for business, and be seen to encourage M&A and investment.â
Access to Call of Duty is âa valid concernâ but âif and when it is properly addressed ⊠there is not much on the competition front that stands in the wayâ of the transaction being cleared in the EU and the U.K., Ma said.
But Ma said the situation in the U.S. is more delicate amid a virtual standoff between Microsoft and the FTC . âIf the EU and the UK approve the deal, Microsoft will be pulling out all the stops to resolve the situation with the FTC,â Ma said. âThere may be a bit of a domino effect. With so much scrutiny, you may not want to be the last regulator standing.â
But if Sony has indeed rejected Microsoftâs offer, âthe FTC risks looking like itâs simply siding with one competitor over another â not preserving competition,â said Swanson of Holland & Hart.
BCLPâs Ma said Microsoft would have known the licensing measures were going to be necessary before signing the deal as part of the risk-assessment and structuring analysis in any large purchase of this type.
âWhat Microsoft may not have known, and may be finding out now as it negotiates with the regulators, is the extent to which it needs to implement these measures to satisfy the regulators,â he said. âIt may be more than Microsoft bargained for.â
2 Likes
Thatâs a pretty interesting idea. Roblox actually gives an example of how PlayStation is willing to do just that. Iâm not saying PlayStation would shun call of duty, but itâs an outside the box non-zero possibly that you found. Something nobody has probably ever considered before. 
1 Like
I do think this is pretty tin foily lol
While there is a chance that it could make CoD less relevant and downsides and risks are way too strong and would likely backfire on Sony very badly
Playstation would have to actively remove games from their store in order for it to have any significant effect. Surveys covered the case of what happens if new COD wasnt on Playstation. The majority just said theyd play the older ones.
4 Likes
The thing is that gives you a position of now. It doesnât give you the switching effect in a year or 2 years or 5 years or 10 years etc timeâŠ
The fact remains that its very very hard to measure. Especially if Warzone was also pulled.
I think deep down we all know it would have a significant effect longer term whilst almost certainly not compensating MS for the loss of sales on PS. So I suspect the bottom line is the CMA have calculated it wrongly and thus arrived at a poor conclusion. But that the actual impact is very hard to determine.
Sony wonât be removing games unless itâs for store policy reasons (eg. game has content that depicts rape, extreme violence, pedophilia etc.), if they start removing/refusing games because they donât like whoâs creating them, 3rd parties will think twice before even starting development on Playstation.
Guess whoâs next.
Although I donât think PlayStation would remove Call of Duty. I do think you underestimate Sonyâs pettiness. Cyberpunk was removed for two reasons. PlayStation had a crappy refund system. Xbox had cyberpunk marketing rights. Clearly PlayStation wasnât worried about third parties. PlayStation is only out to help themselves, even if it means burning a bridge with a popular publisher like CDPR.
Again it doesnât mean they would remove Callof Duty. But donât give PlayStation too much credit. They chose to throw CDPROJECTRED under the bus to hide the fact that their refund policy was pathetic compared to Steam and Xbox. As a bonus, cyberpunk had a marketing deal with Xbox. Donât think for a second PlayStation wouldâve pulled cyberpunk if Sony had marketing rights.
Despite the mainstream narratives, Iâm right. This is exactly what happened and not that long ago.
8 Likes