UK CMA Extends Deadline For Its Investigation Into Xbox Activision Blizzard Deal

I hope Microsoft don't use all these delays with the deal as an excuse for having no games.

If the CMA rejects I hope Microsoft will cancel and use the money for the studios they have. They seem to suffer from poor management and need some support.

If the CMA and FTC reject, and are successful in blocking it, and Sony 'swoops in' and rescues the 'beleaguered' Activision Blizzard at fire sale prices...

If no-one blocks that, it won't just be Microsoft's supporters who'll call foul.

Yeah it sure looks like MS is using the acquisition as an excuse to not add high profile games to Game Pass. I want to play Diablo 4 on it this summer so let’s get this over with, lol!

I still think the deal closes this summer with the only concession being that xbox honors the 10 year plan they laid out for call of Duty. Moving the deadline might be a positive thing for xbox since it doesn't seem like the CMA is dead set on blocking like the FTC was. The FTC wasn't interested in discussing the deal at all because they knew they would sue to block from the start.

I also seriously doubt this deal has had any impact on their current development of games. It doesn't make any sense that a couple games being delayed or a weird fable rumor that was proven false had anything to do with what a team of microsoft lawyers are doing.

It all depends right now on the European Commission, if they approve the deal the CMA will most likely follow and the FTC will have no arguments to continue with the lawsuit and will seek an agreement with Microsoft.

On the other hand if the European Commission, the CMA or both seek to block the deal then all hope is really lost.

Honestly I just want this to be over, whether blocked or approved, it’s been exhausting to follow this specially as Xbox only seems to be concerned about the deal as they have no communication with their community whatsoever, no announcements, no releases, nothing at all since early December.

I think things to bad either way. While we wait and lawyers and Sony play games with this, both companies will go out of their way to be as unexciting as possible. Realistically we're now waiting for Series Z and PS6 for an exciting generation because this gen will be quite literally half done before either company even wants to pretend to look aggressive. EVERYONE is the VCR XBone now.

If the deal goes through (it almost certainly will) then MS will be tied up in making that work and still be unexciting for years because the deal isn't about today, it's about 10 years from now. Meanwhile Sony will go on a tit for tat buying spree and gobble up a lot of games most of us care about more than anything ABK makes and lock it all down as exclusives. If the deal doesn't go through, MS will take that $70b and do exactly the same.

The more it got dragged out the worse the eventual outcome will be. I don't see it not going through, it just makes no sense, but I think I'm miserable whichever way it goes now, because anything marks an ugly 5-10 years.

@ValentineMeikin Activision is worth like 2/3 of Sonys market value, and wouldnt be able to buy them. It would more likely be a chinese firm

@Rmg0731 Activision's market value will tank considerably if the deal fails making them considerably cheaper to purchase. Though I don't think Sony would buy the whole thing simply because a very legitimate market manipulation suit could be brought against them by ABK shareholders, one of them being Tencent, who would have taken significant losses as a result.

@Rmg0731 @Nestalgia

That's exactly it, NES. Sony would love to buy Activision outright, and own Call Of Duty for the rest of time immaterial, while Tencent consumes Blizzard and King to recover their own losses.

And what would it mean for the rest of the market?

Tencent would have complete control over the Riot Games and Blizzard catalogues, and Sony could very easily make a lot more of Call Of Duty exclusive to Sony for as long as they want.

Sony's whole argument, that caused this, is that Microsoft bought a franchise Sony have over-exploited to ridiculous levels, and that they know the golden goose is cooked if the deal goes through. They even put a clause into the contract with ABK to block it releasing on Game Pass for an indeterminate period.

So, If Microsoft fail to close the deal, Activision will be in trouble financially, and Sony and Tencent carve up the corpse, with Sony knowing, if they didn't give Tencent a nice big chunk, they'd be in front of the FTC and CMA over market manipulation since it was THEIR arguments which spearheaded the investigations.

@Kaloudz Aside from the market manipulation thing the whole "problem" with the MS acquisition is just how "big" it is and the associated dollar amount, and Sony screaming about CoD being so vital to their tiny business compared to big bad Microsoft. And for FTC the whole "problem" is simply that MS is the buyer as one of the "big 5" tech companies.

I don't think anyone will bat an eyelash at breaking ABK up and selling CoD to Sony (who clearly "depends on it") and selling it at bargain basement prices.

Though I still think other non-Tencent investors would throw the book at Sony and have a good chance of winning. Sabotaging a sale to purchase part of the wreckage, similarly to inflating the value of an asset to sell it at high prices are not looked upon favorably, and investors suing takeovers tend to be given advantage. And largely I don't think Sony cares who buys it as long as it's not a big tech rival. Like most of their "exclusives", they don't need to own it, they just need to keep it from competitors and keep it weak enough to bribe favored status.

For the former, example look at Sprint. AT&T was blocked from buying Sprint because it would create an outsize competitor allowing the market leader to grow further. Sprint's value was annihilated in the block. They struggled a few years. Then TMobile bought them, easily got past blocking by saying Sprint was doomed without the buyout. The combination produced a new leader that dwarfed the competitors anyway, the very problem it was initially blocked because of.

For an example of the latter, a good case is Sears Holdings vs Eddie Lampert/Transformco, who only won against the former investors because he vowed to keep stores open and therefore jobs which would not happen otherwise (investors just wanted to liquidate to reclaim losses.) SO he keeps stores open. Refuses to say how many actually are open or where they are. And the stores have no inventory, mostly empty shelves. But in such he left the shareholders with almost nothing, seizing all the assets to liquidate later (after he himself destroyed the two companies with bad decision after bad.)

The thing is the people that want it to fail just because they want independent activision just don't understand. No matter what, there's no independent activision after this, either way. It either dies or gets carved and divided into pieces, if no other company wants to shell out for the whole thing (and the only companies that can afford that would be blocked by the agenda driven FTC and wouldn't bother spending money trying now.) No matter what, Activision is over after this. It either becomes XGS, or it gets broken up and never seen again. There's no more Activision no matter what.

@NEStalgia @ValentineMeikin I think the American public would have a field day if their government blocks an American company from buying another American company so that two foreign ones can buy pieces of it. The politicians from both California and Washington would start flipping tables and whatnot.

wow the conspiracy theories get more and more stupid in the comments the longer this drags on

It's no 'conspiracy'. Activision were in trouble due to Brian Kotick trashing the company's monetary and public values, funnelling everything in Activision into fuelling the great maw of Call Of Duty, due to how much he was making off it, with multiple lawsuits from staff upcoming.

Microsoft offered him a golden parachute as part of the sale, and to value it at above market value, so everyone who lost their job would make a nice sum, and they were eyeing up King as a way to start a proper mobile gaming division.

Microsoft don't care about the gargantuan monstrosity that is Call Of Duty, they'd give Sony a exclusivity deal until the PS6 to get them to shut up about it, if Sony actually answered their calls.

Blizzard and King are the big ticket items, and the fact they own two massive licenses in (World Of) Warcraft and Overwatch. If Microsoft got Blizzard to develop a WoW client for consoles, with Game Pass owners getting a basic subscription for free, well, similar thing to when they transitioned Minecraft to Bedrock.
Even Sony accepted the deal after a while of grumbling.

Under Sony, ABK would have all development shuffled to either Call Of Duty or Overwatch, and anything else would get much less support. Why? Because both of those are on console, and Sony only cares about what you play on Playstation.

@jonnybuck84 For Microsoft it's a massive benefit, so they'll throw all their effort behind it. For Activision it's pretty much survival and avoiding devastating collapse. For Bobby it's his personal way out of an arraignment hearing and having to sell a yacht or two. They'll fight for it tooth and nail. MS gets the headlines but we tend to forget Activision is also a pretty big corporation with full legal effort and business necessity of this succeeding with their own share holders on the hook. MS isn't likely to pull out due to "hassle" as it represents significant value for them. Activision literally can't pull out, no matter the hassle, their finances depend on success and they are seriously hosed if it fails. Successfully "blocking" it basically means stopping "big tech" from getting bigger at the cost of likely bankrupting and collapsing a "not as big" tech company as the price. When a $60b publicly traded corporation is searching for a buyer....all is not well.

@RedShirtRod I don't think the "American public" would really know or care, and the media would propagandize it as a win for the consumer against big business by their vigilant government heroes. They'd never know that even bigger Chinese business was the beneficiary, nor would they be meant to know.

@Exerion76 And what exactly do they need to get together on those games then? All are coming along, only Perfect Dark has had trouble.

@ValentineMeikin
That is a thought...
But not one that will actually ever happen, so don't worry in the slightest that Sony will ever have a chance at pullin the rug out from underneath Xbox more than they have already.
They do not have even close to enough money to buy ABK.
And with a far greater market share in the industry, it just wont happen I promise you that.

Really, we need the CMA and the EU the pass the deal, then Xbox will be okay.
If they don't, then this will have all been for nothing.

Also, let's say that this deal does not end up going through...
Do you really think Activision is going to still be buddy buddy with PlayStation?
All of ABK's executives are going to make a sh*t load of money once this deal goes through. If PS makes them miss out on that payday, Sony will be in the doghouse more than they already are with ABK.
Even now, with the way they have spoken out against this deal so publicly and egregiously... I really cannot picture Sony ever even getting the CoD marketing rights again after this three-year contract is up.

@ValentineMeikin @ValentineMeikin
Brian Kotik...?
LoL I want to read your long ass comment seriously, and assume you know what you are talking about.
But when you start it off with Brian Kotik in the first sentence... C'mon man! LoL

It is Bobby Kotik.

Also... I just read a different comment you made and holy cow dude... You did not take it easy on the bong loads today did ya?!?
You have successfully convinced yourself that if Xbox doesnt buy ABK that Sony will buy Activision and TenCent will buy BK... HAHAHA.
Well I can ease your mind, you did not convince anyone else here that their is a chance in hell that ever ends up being the outcome of all of this.
I am not going to explain more why that is an extremely obvious bad take and has zero chance of being an outcome. But go and watch some Hoeg Law videos on YouTube... You will learn something.

@RedShirtRod anyone who still thinks Sony PlayStation are a Japanese company are kidding themselves, they’re as Californian as the rest of the big tech companies.

@Exerion76 No they are not. What problems do you think they are having? The rumour this week that was totally and utterly debunked by insiders as complete BS? There are a LOT of bull rumours going around about Microsoft’s studios, have been for the last year. Most likely started by sour people upset Microsoft has stepped up to compete.

@Exerion76 And you are frankly making stuff up. The issues with the engine was the rumour totally and utterly debunked this week. A random sour idiot posted it on For Chan and everyone believed it… It is actually stated by insiders development is progressing as expected.

@Exerion76 Wrong, the rumour was they ditched their own engine for Unreal because their own engine wasn’t working for an RPG, exactly as you just said, only incredibly reputable insiders came out and competently destroyed that theory this week. So it seems like you’ve been reading a load of made up rubbish for a year.

@Kaloudz Under that scenario MS could try to buy parts of it, and regulators would be a lot weaker to argue since the dollar value is not so high. The COD aspect in that sense is an interesting one, since buying the problem child along would yield the same protests from Sony, yet blocking purchasing an IP rather than a company would be even more impossible than blocking this. That said, despite Sony's noise I don't believe Microsoft could possibly care less about CoD. It's not what they want at all, that's what Sony wants. Microsoft wants King (entry into mobile they currently lack which is THE biggest market in gaming), they want Blizzard (key PC franchises, and PC is an important key market in that Matrick weakened them in and Phil has spent considerable effort using the Xbox brand to build back MS's PC gaming presence they once had), and most importantly they want the turnkey massive studio expansion that gives them instant production capacity rather than building it slowly over decades.

For Sony, CoD is everything because it's their biggest revenue line by far and cultivating CoD as a "Best on PS" title has been a huge part of their profit strategy for a generation now. But MS isn't playing the same game Sony is. For MS they see it as a purchase of factory capacity the same way as if Sony were to buy LG's OLED factories to expand their display production capacity. I expect MS's first function after the deal is to simply dismantle the CoD factory. Sony cares only about what happens to CoD, Microsoft cares about everything except CoD.

There's an ironic karma to the whole thing, I don't think MS would mind a concession of selling a console-exclusivity contract on CoD to Sony if that would get them quiet, it's not their interest in this and I suspect they plan on neutering CoD anyway, at least in the context that Sony thinks about it, but then Sony's arguments would be reveled as hollow since then they'd be in a position to be the one to foreclose on the CoD market, so they couldn't ask for that even if they wanted to and even if MS would grant it because it would destroy their entire argument to do so!

Yeah, there's a lot of hypocrisy in listening to Sony. Sony Corp may be much smaller than MSFT, but PlayStation is far bigger than Xbox, and uses the "network effect" of their market dominance the same way big tech does to shut out competition even from other big tech. This is no different than if Google were to protest expansion of Bing, or Apple were to protest expansion of Winphone. The idea would be laughable. But Sony's successfully playing the "small company" card, which itself is laughable, and reveals how little the regulators understand the thing they're regulating. And in the US FTC's case, it's an agenda driven kangaroo court that already decided to block before the case was even in front of them. They saw "Microsoft" printed on the docket and decided the answer was "block everything!" Facts and details need not interfere with the agenda of attacking big tech, ironically using their position to defend entrenched market domination, the opposite result of what their agenda is supposed to be about. Ideology and stupidity combining have an ugly history on Earth...

I don't even disagree with them in the idea that big tech should not continue consolidating. But that needs to be applied where big tech is actually consolidating something rather than presenting a competitive challenge to another big tech company that already owns the market in question...

@Kaloudz I think it gets approved no matter what, and I don't think MS or Activision has any intention of backing down. Activision's been pretty silent, letting MS do the talking but as it gets to the courts their own legal position is becoming more vocal. But I think there's several routes to that. What MS and Sony know, and Activision can't publicly say, and the regulators are too foolish to understand, is that Activision is a damaged company that has been severely mismanaged and is pretty much in a death spiral. They APPEAR rich and healthy, and they've done a lot of work to continue appearing that way for the benefit of their investors, but customers watched them dying a decade ago. Regulators keep taking Sony's lead and approaching this like a hostile takeover by a big bad company to horizontally integrate rather than the reality that Acivision was secretly and quietly begging for anyone to buy them out of their self inflicted doom because they're backed into a corner, and in courts with redacted documents that will be part of the arguments.

I don't know too much about precedents with CMA and EU, but based on EU's reaction to FTC throwing them under the bus from the Zenimax decision, they were quick to distance themselves from the visibly political FTC, and fairly clear that their line in the sand revolves entirely around the importance of CoD. I think they'll be easy to offer CoD-related concessions to and get approvals, that seems to be their primary concern, and MS is more than happy to make any CoD-related concessions because that's not what they're really interested in.

CMA I don't have a reading on. My outsider's take is they just don't want to look like fools and are just trying to see what everyone else does so they don't look out of step. They'll copy the smart kid's homework is my guess.

FTC....they're on a full-on partisan driven agenda in an election cycle that features a certain divisive former president and all the partisan vitriol that goes with that that pales only to PS vs Xbox fanboy wars. They're also completely out of step with the legal system. I don't think they have any intention of talking about anything at all, they just want to make a political statement for the election cycle street cred. MS and Sony and Activision aren't even involved for them, it's purely about making a political move for their party's benefit (and the chair's future political career.) Their goal is clearly to tie it up in their own little kangaroo court indefinitely, which is why MS is going to just go straight through and ignore them, allowing the federal motion to be filed to halt, at which point it gets turned over to the real courts.

What circuit it ends up in depends where it goes from there. If it goes to a political fellow traveler, then it goes against MS and they have to appeal to a higher circuit. There's zero chance it doesn't get approved through the courts, even if it takes the appeal to SCOTUS to do it, but the question is how it fits into the July expiration date on the deal.

There's no way the courts uphold a block, the law and case law (precedent) just do not support a block on any legal grounds, and for all their politics and failings the actual courts generally end up going with the actual case law basis in the end (For now, and we're doomed when that changes once the politics gets into the wrong places... ) The only question is how many appeals it takes to get it thrown out and how the July date factors in. And what happens if it extends beyond July probably depends on how Activision can massage it's shareholders to not panic.