UK watchdog blocks Microsoft's Activision Blizzard acquisition UK regulators have dealt a serious blow to Microsoft's hopes of acquiring gaming giant Activision Blizzard, with the Competition and Markets Authority blocking the massive deal because Microsoft's proposed remedies "had significant shortcomings." The $68.7 billion purchase would be the largest in the gaming industry's history …
Activision definitely had studios in the UK previously through acquisitions they made, but unsure about now. Microsoft UK division is headquartered in Reading.
The way these large mega corps work is they often have international offices as separate entities so yes they could well be beholden to the CMA decision unless MS decided to close down their UK offices to get the deal to go ahead. But I think that's highly unlikely since MS make more money from businesses than gamers, and closing your UK offices down would likely not go down well with UK Enterprise customers who pay lots of money to Microsoft.
I'm downvoting you because you seem to think "play in our game, play by our rules" is something that the US does more than any other sovereignty. In fact, this is the very definition of sovereignty. Everyone does it because that is what those who gave power to those in charge demand.
You don't actually deny that the US *does* do it more though?
In fact you seem to imply that's acceptable because "[that] is the very definition of sovereignty". Well, maybe it is and maybe the US does it more because it *can* and- if I understand correctly- you're okay with that.
Well then- as OP seemed to be implying- you don't get to complain that you're not used to the boot being on the other foot.
"UK bans an American company from acquiring another American company. Yes I can see this being effective. Unless the 2 entities have a uk office, there’s not a jot the CMA can do about it except moan."
Judging by MS's reaction, they seem to see this as more of an issue than you do: https://www.bbc.co.uk/news/business-65407005
UK bans an American company from acquiring another American company. Yes I can see this being effective. Unless the 2 entities have a uk office, there’s not a jot the CMA can do about it except moan.
Always good to read a well-supported argument from an expert. Perhaps you know of one?
Despite all the downvotes ( there’s a lot of people on here who seem to confuse votes with truth ) not one person has pointed to chapter and verse of law that opposes my position, and to clarify and repeat posts much further down, there is no law that allows the CMA to do anything about 2 foreign companies merging.
I think it is more than just Consoles and games on those consoles. The future of gaming is in the cloud, and Microsoft has an advantage in the Cloud - it is now a Cloud business. It sees an advantage to be had over all others in the Cloud. I hope this decision clips its wings, at least for a while. Lotta bottle to the UK CMA.
That's not how our version of capitalism works. It has 2 options. 1. Takeover. 2. Put out of business by undercutting. More competing suppliers is also not always good. Look at streaming services. It's at least the same if not more than people paid for a TV subscription. I don't see an issue with this takeover. All online gaming has now descended into the EA model of screw you with extras but still charge full price for the games. We also have enough cloud services for independents to succeed if they make a good online game and no platform is going to turn it away from running on their services as well. It's not like this will stop that or actually change anything.
Look at streaming services. It's at least the same if not more than people paid for a TV subscription.
Some streaming services: for Netflix, per their web page, "Plans range from $6.99 to $19.99 a month. No extra costs, no contracts." Crunchyroll Premium is $9.99/month. Hulu is $14.99/month w/out ads. None of those is "more than people paid for a TV subscription." TV (cable) subscriptions here are provided by government-approved-and-allegedly-regulated monopolies, and they are expensive.
Re capitalistic options: there is option 3 -- succeed by providing a superior product, and/or superior service, and/or a cheaper price. This option isn't used as often as we'd like.
When we moved and stopped paying for a cable television subscription a few years ago, it was around $250/month. That included Internet service, but now our combined Internet and streaming subscriptions is only around $130/month. (And it'd be less if it were just me here, since I could dispense with most of them, and would. Particularly those bastards at WBD.)
It will be interesting to see if this decision has any impact at all, or if it just means that the deal will go ahead and the UK will be side stepped entirely.
I can understand the EU or US competition authorities being big enough to have somewhat global reach in their decisions, but the UK is a mid-sized single country. and is really stretching its regulatory reach in this.
It'll be interesting to see where this goes...
So how would it work if by UK law the sales (of games, subscriptions etc) happen in the UK and due to this decision Microsoft UK (and probably by extension any company wholly owned by Microsoft) is not allowed to make that sale? Taking a step further the game cannot be hosted in Azure?
You might call my above scenario a little far fetched but assuming Microsoft give CMA the middle finger. Then all any software house needs to do is reference this ruling in a legal dispute and that's probably going to be the conditions of selling the next Microsoft AAA game title in the UK
Laws would have to first be passed to allow that. There is no current UK law that will permit government to punish a wholly owned uk based subsidiary of a US based company or seize the uk based company’s assets.
Remember when the uk started seizing Russian owned personal and company assets in response to the Ukraine invasion? Emergency sessions of parliament were called that rushed through legislation permitting the government to make the seizures and forfeitures. Possession is 9/10ths of the law, and the government cannot get around that in any way other than passing additional laws.
I cannot ever see parliament allocating the same time and resources it expended on the Russian sanctions, in order to pass new laws to punish Microsoft for a merger of 2 foreign companies.
Possession is 9/10ths of the law, and the government cannot get around that in any way other than passing additional laws.
I guess it's also how national laws would fit with international laws and treaties, eg collective punishment, or violations of human rights due to seizing property, or aspects of WTO etc.
But it would seem as though there are potential alternatives. ISTR the venerable Castle Wolfenstein being banned/illegal in Germany due to depictions of Nazi insignia, and the same happening with other games. I think Rimworld also got in trouble because it allows cooking with ingredients that are illegal in Germany. I think Australia has pretty strict laws banning some games due to canniibalism and other potentially offensive activities. And I guess the UK could ban games that featured torture or even Civilisation given it's a popular genocide simulator.
Then I guess it could just declare some titles are Video Game Nasties and make the sale/supply illegal, along with punitive fines, should they be caught doing so. Or selling age-restricted games to kids. Or I guess for 'cloud' games, illegal/unenforceable contracts with minors, if games require monthly service payments. And then there'd still be all the potential for competition and market distortion. I guess blocking the merger is just pre-empting some of that already existing illegal behavior.
Personally I think it's in many ways a good thing, if it discourages predatory behaviour from Big Tech. So turning games that you used to be able to 'buy' for £39.99 and play whenever and whever you want into £79.99 games + £19.99 a month for a game that you may just want to play on a beach somewhere. But instead it forces you to be online so it can bombard you with offers for level-ups, power-ups, DLC packs and generally try to hook people on pixel crack. Or the game will use it's camera directors to force your character to keep looking at ad hoardings or billboards for whatever carp it is that MS's adsense division is trying to flog you.
AKA : they don't get it the way we do.
Yeah, well I'm not disappointed in the least. The only cloud service I trust in gaming is Steam, and nobody else, neither Borkzilla nor Activision, is up to Steam's level in the matter.
..."trust" Steam?
Honest question.
Personally, I consider anything with DRM as a form of rental, whether Steam, Microsoft/Xbox/Apple-App/Google-Play Store or, the honestly labelled rental model, Game Pass.
The vast majority of PC game purchases I've made over the past decade have been at gog.com. (Though I certainly recognise most people's game preferences aren't properly served by them.)
The only way I could see the decision having any impact would be if another case were taken in a bigger jurisdiction i.e. the EU or the US that put a significant block on this and that doesn't look very likely at the moment, so I think the UK could be on its own on this one and it really doesn't have the ability to enforce it.
The most likely reaction to this in the medium term is an appeal and probably multiple appeals, so it will drag through the courts for another couple of years.
What exactly are they measuring. Is it games that use MS cloud or games that run on MS OS/systems (Windows and XBox) regardless of the cloud they connect to. Is the measure on revenue or volume of players? Also what platforms do they include are mobile games a part of what is measured. Mobile games are 50% of Activision's revenue and a market that is growing much faster than console/Computer market. How much of the mobile market is not cloud games? Most seem to need to connect to the internet and talk to external servers or other gamers.
I just find it hard to see how MS has 60/70% when they are not the largest game company even if they acquired Activison they would only be number 3. Sony hold a much bigger chunk of the console market.
I am not saying MS does not have 60/70% of the cloud gaming market just how did they arrive at that figure.
Cloud gaming means the game is run on the cloud and streamed to your device, so services like OnLive (dead) or Stadia (dead).
The funny thing is that it was Microsoft who brought it up, they argued that the impact of the merger on Sony and Nintendo was irrelevant since in 10 years time nobody will buy consoles anyway as everyone will be using cloud gaming.
I have read a couple of the previous articles and I now know what the CMA means by cloud gaming. It’s subscription gaming in the case of MS that is the Xbox pass, the 60/70% now makes sense.
It seems to me that the reason MS is leading the subscription market is because the Xbox pass is not restricted to just Xbox. It can also be used on windows and mobile. There does not seem to be any reason why Sony the second biggest game producer who even if the merger went through would still be second biggest and bigger than MS can’t compete with subscriptions on windows and mobile.
After all unlike MS with mobile Sony do produce games for windows and mobile that they could offer on a subscription service.
XBOX game pass already allows you to stream over 400 game titles to remote devices off the MS cloud, it's one of the few cloud gaming platforms that actually works.
MS as usual saw how Stadia was messed up, did their way and while it's OK and works MS needs as a many well known titles as they can to really push cloud gaming home to the masses. They can then simply stop making expensive XBOX consoles, make a cut down device that's nothing more than a glorified "set top box" for your TV and charge you for the monthly subscription. You will never own another game title, simply pay-to-play.
Still not sure how I feel abotu this. I've a huge investment in Steam and using my SteamDeck, so the MS XBOX game pass monopoly is concerning. MS won't fix XBOX game pass to run natively on SteamDeck, they have too much too lose. You can do it by hacking about but you can cloud stream direct through a browser from MS XBOX to anything that can run the latest browsers.
The days of the console and owned device are numbered, it's sad and we will lose all the old titles and be forced to pay-to-play just to play anything. The fact that this merger is dead in the UK is a good thing.
Cloud gaming is literally the game runs in the datacentre, you simply stream it back to a dummy device. It works but still not great but MS already you to play over 400 games remotely through XBOX pass, they're one of the few going for it after Google screwed up Stadio and trying to steal a march on anyone else like Nvidia getting in there.
If you do business in the UK (which both MSFT and Activision do) you must abide by both UK law and the rulings of statutory bodies such as the CMA. The CMA has the power to impose substantial fines on companies who ignore its rulings, and does not hesitate to do so. These can be up to 10% of global turnover. If you don't pay the fines, you risk criminal proceedings against executives and decision makers, confiscation of assets, and outright trading bans.
There is no way that Microsoft and Activision will ignore this ruling.
Well no, it makes no different to Guenther in Germany or Freedric in France, it's simply the UK putting it's foot down to protect competition here in the UK. We do have some very well known game studios here in the UK such as "Hello Games" who own the stunning No Man's Sky, bit of a flop at first but now one of the most praised games in the last 5 years. They're down in the New Forest somewhere I believe.
UK game studios and talent does contribute a lot to the industry, a lot more than people realise and so the UK needs to look after itself. Chances are that the EU will block it too and US if they have the guts to ignore the lobbyists.
These are two American companies and the CMA should not be intervening in the acquisition process. However the CMA has a duty to protect British consumers from monopolies. Therefore a better solution would have been to penalise the new merged entity on the basis of reduced competition. The UK is a sovereign country and we could easily apply a tax to Microsoft which would be disadvantageous to them and advantageous to their competitors thus encouraging competition. That is an effective way to manage monopolies. A similar example would be to stop Amazon bundling prime video with delivery. Or do something about the MasterCard Visa monopoly by making charges transparent.
Instead this decision by the CMA is going to cause problems with one of our major trading partners.
I'm thinking of smaller UK studios such as Hello Games ( No Man's Sky ), we don't have tons of well known studios but we do have some seriously good talent here in the UK and we need to foster it as best we can, this decisions will hopefully ensure home grown gaming studios can be encouraged and become as big as the likes of Hello Games.
Yep, there is absolutely talent here. I haven't bought a game off a so called AAA publisher in a long time. Designed by corporate dross versus intelligent indie development with original ideas. No contest.
Even the likes of David Darling have gone off to reform new studios with some good looking ideas (albeit concentrating a bit too much on the mobile market for my own liking).
@Binraider "Given that MS have already have Bungie and Bethesda on the books"
Microsoft have not had Bungie on the books since 2007 when Bungie became an independent company. It is Sony who have Bungie on their books they acquired Bungie in January 2022.
Neither would MS have a monopoly on the biggest games development studios even with Activison they would on be third biggest behind Sony who are second biggest
I listened (UK morning news) to Brad Smith holding forth on MS's unbridled enthusiasm for competition in the cloud gaming business, how the proposed merger would 'benefit everyone' (interspersed with his measured thoughts on how anti-business the UK currently is).
I'm not sure he did MS or himself any favors there, but also wondered if I was hearing faint echoes of the old 'Extend, Embrace Extinguish' approach .
Still, maybe the leopard has changed it's spots....
To be fair, this whole thing has been worth it to watch Microsoft Executives crying like little children and throwing their toys out of the pram and then threatening to take their investment to the EU instead of the UK!
It's absolutely hilarious! UK Govt should just turn around and say...well we'll move our Cloud investments across to AWS or GCP then and watch MS capitulate faster than I do when someone offers me a Cornetto.
MS could of course found and/or fund it's own games subsidiaries to actually produce content one of these days. (Good) Game studios do not operate to rigid clock cycles. Trying to apply corporate production line to art is as ineffective as it sounds other than in some very staid and select genres (looking at you, EA Sports).
MS literally shot their own foot off shutting down subsidiaries that had been a success for them like BAO in the early 2000's, for not understanding the nature of the beast at corporate level.
Remind me again what Bethesda have done that's relevant since MS got their grubby mitts on them? (Doom eternal having been the swansong while it was under other ownership).
@Binraider "Remind me again what Bethesda have done that's relevant since MS got their grubby mitts on them?"
Maybe Bethesda have not produced any thing new as they are too busy producing two console exclusive games for Sony's PS5. ;)
https://www.theverge.com/2020/9/21/21449121/microsoft-bethesda-ps5-playstation-5-xbox-series-x-s-consoles-exclusives
Microsoft has been in business in the UK for 40 years, and is pretty much the largest corp in the world. Pissing off the UK whilst at the same time mouthing crap like "Unicorn Kingdom" is a stupid and shortsighted UK policy that will a) likely reduce MS investment in the UK, and b) make the UK even more of a digital irrelevance as no UK company has the power to host planetary scale AI like the big boys do.
The EU may also follow with the same decision. Some have forgotten that the US is also opposing this deal. The UK does not want to be out of alignment either.
This stuff tends to have cross party support across right and left wing lines. Microsoft is playing with fire attacking governments. They are not above policing.
I am curious as to why expend so much energy on this battle. Is something lacking in their core Office/Windows business? A terrible look.
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"I am curious as to why expend so much energy on this battle. Is something lacking in their core Office/Windows business? A terrible look."
Its to tie up the gaming market as 'cloud' gaming , as in you pay to play, you want to carry on playing, you pay, if the game is not getting enough subscriptions, you dont play because we'll stop you and you can pay even more to play something else.
Think 'Fifa' series of football games, you wont be able to play 'Fifa 21@ because m$ wont allow you to subscribe because of low numbers playing, but they will let you play 'Fifa 23' but its 10% more than 21 was.
Also it ties up 'exclusive' content to their own store, thus freezing out the likes of Steam and Sony/playstation. who end up getting less sales.
Once m$ manages to tie up 95% of gaming to their store/cloud platforms and everyone is subscribing to play, then they'll be happy......... briefly ..... and raise the rates by 120% because we'll have no where else to go.
Certainly in the OS business, Microsoft are looking at an increasing struggle to extract revenue: PCs are largely good enough for most practical purposes and the only market segment that can be incentivized to upgrade regularly is gaming.
And the opportunities for revenue growth from Office must be diminishing. They may be able to strongarm people into more cloud subscriptions, but their prospects in growth markets like China can't be great given the currently schismatic state of the international order.
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