Microsoft (All But) Acquires Activision-Blizzard
The FTC has lost its injunction case against the Microsoft and Activision-Blizzard merger. Minutes later, the remaining regulatory holdout in the UK appears to be in back-room discussions with Microsoft. Although the FTC can still technically appeal the decision, in all likelihood things will be buttoned up by the time this post goes live.
I have not been following the court case itself too closely. The armchair legal experts on Reddit though suggest that the FTC’s arguments were weak, but don’t really go into convincing detail as what alternative arguments would have been stronger. On the face of it, everything seemed to hinge on Sony – who currently owns 45% of the entire console market – being negatively impacted by the merger. Considering Xbox is just 27.3%, one might surmise that the merger would actually increase competition in the console space. At least the UK’s argument was about cloud gaming… something that basically doesn’t exist, with even Google and Amazon unable to get it to work.
I am sympathetic to the argument that buying publishers and game companies is detrimental generally. There are no doubt millions of PS5 owners who probably wanted to play Starfield on their console of choice. Sort of like how I would have liked to play Ghosts of Tsushima on PC, which isn’t even considered a console by Sony/courts, but nevermind.
Perhaps it’s a bit myopic, but I’m obviously in Team Game Pass. I don’t care about Call of Duty and I doubt WoW will change, but potentially seeing Diablo 4 show up without having to spend $70 on it is a welcome surprise. No doubt the good times will come to an end at some point, especially considering the recent subscription price hikes, but it’s still worlds better (and cheaper) than the alternatives.
Will everyone come to regret this outcome 10 years from now? I kinda hope so. Because that means things are normal enough in 2033 that we can still give a shit about video games and not play Fallout 5 by walking outside our front doors.
Posted on July 12, 2023, in Commentary and tagged Court, Exclusive, FTC, Microsoft, Sony, Xbox Game Pass. Bookmark the permalink. 3 Comments.
It really caressed the cockles of my heart, the way Bobby Kotick spared a thought for “workers” while enumerating the merger’s benefits.
I struggle to form a definitive opinion about all this. On the one hand, a pox on all their houses. On the other hand, Microsoft are at least adults and Phil Specter appears to be something of a genuine video game evangelist inside the company. I suppose, despite everything, I retain enough affection for Blizzard to want to see whether it can prosper under less toxic stewardship while backed by significant resources.
On the gripping hand, the whole anti-trust process is so weird and arbitrary. Sure, Microsoft may be an underdog in the console space specifically, but its market cap is $2T to Sony’s $150bn. And it has a fairly cozy relationship with the overall gaming leader Tencent, which is supportive of the merger. Is the company’s overall potential not factored in at all?
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I’m not even close to being an expert on this, but my understanding is that Microsoft’s non-gaming size is irrelevant. Microsoft buying Nintendo (or Sony!) would be a monopolistic move, but buying studios does not. There was an argument made that X million PS5 owners only play CoD and therefore Sony’s slice of the pie would be reduced, but A) Sony owns 45% of the pie, and B) it was agreed that CoD would show up on Sony systems for 10 years. Besides, Nintendo never had CoD and they were bigger than even Microsoft, so the argument is weak regardless.
The main downside to this merger is potentially setting off (more of) an acquisition arms race. Suppose that Sony buys with Square Enix and makes all future Final Fantasy games Playstation exclusives. Which is sorta what it does already (timed exclusives), but no longer publishes on PC or whatever. Or stops smaller games (Octopath Traveller, etc) from going multi-platform. That’s bad. But if CoD/Diablo/etc end up on Game Pass, that’s good for the average consumer now.
Is there future harm? Sure, potentially. But the harm is… Game Pass getting more expensive? Sony-only players having to buy a second console after the PS6? We all know Game Pass will increase in price, but there’s an inherent ceiling beyond which you… just buy the game outright, like you’ve always done. Odds are that Game Pass is always a fantastic alternative, and in the case of Sony-only fans, well, I’m already harmed in the same way for not being able to play Ghost of Tsushima.
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The FTC’s appeal to the 9th Circuit Court of Appeals has been denied.
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