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[Astray]

Okay so, to your first point: I laid out a couple of weeks ago that MS was seeking to close regardless of regulators because they likely feel that ATVI is not willing to renegotiate the Merger Agreement. All of this effort is to close it before July 18th. Theres a myriad of reasons why ATVI could be feeling they don't wanna re-negotiate, especially if there is no strong sign that the chances to get an approval will improve with the UK, or with the FTC's case in August.

Yeah it feels to me that MS's plan now is "close now, figure it out later", hence the FTC response today.

I think that it's safe to say that Activision won't be signing an extension, you can even see it in how muted their co-signing of MS's PR is nowadays compared to what it was when the CMA block 1st happened.

As to your second point - the reason they pointed this out is more to the larger market and internal naysayers to their business plan. They aren't seeking to soften the blow, but really pointed questions behind the scenes have been increasingly asked as of late on the profitability of the Xbox marketplace for non-XGS publishing entities, not to mention internally there are loads of questions regarding the sustainability of the current business direction.

To be noted - you're correct in thinking that this isn't the sort of thing that typically ever gets talked about at gaming shows anymore, so if you thought it strange, thats because it is. My understanding is that MS really wanted yesterday's showcase to 'reset' the fiscal, industry, and public perception on the Xbox platform.

Yeah this is the sort of talk we usually get in corporate filings and investor calls. Was very weird to see it inserted into a consumer-focused event.

Lots of weird dancing around too in that interview, counting MAUs from other platforms is kinda self-defeating when your strategy is currently about trying to dry their content flow and hold them ransom, you should be holding strong with replacement revenues that make the decision to skip those platforms for your new games a tenable one to investors. There are real questions around the viability of the subscription business model for gaming, not only because Gamepass plateau'd, but because even Hollywood is having a massive rethink moment right now.

Hell, I'd even question the profitability of XGS games as well at this juncture, Forza games aren't cheap to make, and putting them behind a subscription may not be making as much monies as simply selling immediately.

 

[Bernoulli]

If they plan to close wouldn't that be with Activision consent? Or Activision has to consent or they lose 3B

 

[DeepEnigma]

Well maybe your dumbass should read more because that info was source by mlex

No, that jackass didn't cite anything in that post. Also go fuck yourself.

 

[Ar¢tos]

No, that jackass didn't cite anything in that post. Also go fuck yourself.

You realize that it is a physical impossibility?

 

[Kilau]

If they plan to close wouldn't that be with Activision consent? Or Activision has to consent or they lose 3B

Sure, but I also think ABK has to go with everything or risk losing the $3B. I would imagine MS would fight that payment if they feel they can prove ABK wasn't acting in good faith if the deal ends up failing.

 

[MasterCornholio]

Sure, but I also think ABK has to go with everything or risk losing the $3B. I would imagine MS would fight that payment if they feel they can prove ABK wasn't acting in good faith if the deal ends up failing.

I don't know if that includes Microsoft breaking the original agreement.

 

[wolffy66]

A part of me wants MS to push through to see the chaos. The mature part of me wants no part of large corporations being able to ignore regulatory committees. I fear we are headed to true corporate overlords if that happens.

Too late

 

[Topher]

You realize that it is a physical impossibility?

Are you sure? Asking for a friend.

 

[Thirty7ven]

I don’t understand how MS closes by breaking the original agreement.

 

[Astray]

If they plan to close wouldn't that be with Activision consent? Or Activision has to consent or they lose 3B

They'd be closing under the existing merger agreement. Acti has to play ball otherwise they'd lose out on 3 billion.

 

[Thirty7ven]

They'd be closing under the existing merger agreement. Acti has to play ball otherwise they'd lose out on 3 billion.

But how if they don’t fulfill the requirements?

Are they trying to scare ABK here? Something is off.

 

[Moridianae]

So, am I understanding this correctly? The CMA said no-go, FTC was against but it hadn't come to a date yet, so Microsoft was preparing to say "Fuck yall were closing anyway" so the FTC filed this?

 

[BennyBlanco]

If they plan to close wouldn't that be with Activision consent? Or Activision has to consent or they lose 3B

Of course activision will consent. If this goes through it’s a giant pile of money for shareholders.

 

[Astray]

But how if they don’t fulfill the requirements?

Are they trying to scare ABK here? Something is off.

If the deal fails, and MS goes: "you didn't do your absolute best efforts when the deal was in a 50/50 state and could have benefitted from your support on our legal maneuvers, hence you are out 3 billy" then ActiBlizz might actually lose in court if they ever go to court afterwards.

The "we're gonna close and settle things after" is a tactic for dealing with regulators, they're essentially treating the CMA as a 2nd FTC here, where maybe they can close and then find a loophole afterwards. Basically anything to get the deal through while they still can.

So, am I understanding this correctly? The CMA said no-go, FTC was against but it hadn't come to a date yet, so Microsoft was preparing to say "Fuck yall were closing anyway" so the FTC filed this?

Yep basically.

 

[Thirty7ven]

If the deal fails, and MS goes: "you didn't do your absolute best efforts when the deal was in a 50/50 state and could have benefitted from your support on our legal maneuvers, hence you are out 3 billy" then ActiBlizz might actually lose in court if they ever go to court afterwards.

The "we're gonna close and settle things after" is a tactic for dealing with regulators, they're essentially treating the CMA as a 2nd FTC here, where maybe they can close and then find a loophole afterwards. Basically anything to get the deal through while they still can.

ABK isn’t required to break up the original agreement in order to be owed 3B.

There’s something going on that we don’t know about.

 

[Topher]

So, am I understanding this correctly? The CMA said no-go, FTC was against but it hadn't come to a date yet, so Microsoft was preparing to say "Fuck yall were closing anyway" so the FTC filed this?

Microsoft was rumored to be considering closing the deal. We don't know if that was true or not though.

 

[DeepEnigma]

I don’t understand how MS closes by breaking the original agreement.

Unless they amend the contract and the shareholders hold a vote for it. But, that's playing with regulation fire.

CMA broke up companies for far less.

 

[Astray]

ABK isn’t required to break up the original agreement in order to be owed 3B.

There’s something going on that we don’t know about.

You gotta keep in mind that the CMA's block is still pending appeal, so things as they stand are not at the stage where the deal is null and void, the CMA is closer to being an outright block than the FTC is, but they theoretically can still garner approval in some way.

What Microsoft want is to close (which would theoretically still happen because the FTC/CMA blocks are not yet finalized), then successfully appeal the CMA, then they believe that the FTC is easy enough to fight that they are a non-threat to the deal (both sides clearly agree about the FTC, that's why we had so many briefings where they talked about closing despite the court case).

All this is fueled by hopium at some level of the company's decisionmakers, but that doesn't mean their chances of ramming this through are a complete zero just yet.

Personally I think this is the last hurrah for this deal, the hail mary pass, but what the hell do I know?

 

[Kilau]

ABK isn’t required to break up the original agreement in order to be owed 3B.

There’s something going on that we don’t know about.

Wasn’t it said MS could waive the need for approval from the CMA? That would be something between them and ABK. They could close in that case with no breaking of the deal.

 

[Thirty7ven]

You gotta keep in mind that the CMA's block is still pending appeal, so things as they stand are not at the stage where the deal is null and void, the CMA is closer to being an outright block than the FTC is, but they theoretically can still garner approval in some way.

What Microsoft want is to close (which would theoretically still happen because the FTC/CMA blocks are not yet finalized), then successfully appeal the CMA, then they believe that the FTC is easy enough to fight that they are a non-threat to the deal (both sides clearly agree about the FTC, that's why we had so many briefings where they talked about closing despite the court case).

All this is fueled by hopium at some level of the company's decisionmakers, but that doesn't mean their chances of ramming this through are a complete zero just yet.

Personally I think this is the last hurrah for this deal, the hail mary pass, but what the hell do I know?

Actually it would be illegal. MS has been prohibited to invest in ABK in anyway shape or form by the CMA while the process is ongoing.

So that’s what we are talking about, breaking the law.

 

[Varteras]

You realize that it is a physical impossibility?

Are you sure? Asking for a friend.

Sure. Not with that attitude. Let's see some positivity. You can fuck yourself if you want it bad enough.

 

[Topher]

Sure. Not with that attitude. Let's see some positivity. You can fuck yourself if you want it bad enough.

Errr....I mean....my friend.

 

[TheDreadLord]

Actually it would be illegal. MS has been prohibited to invest in ABK in anyway shape or form by the CMA while the process is ongoing.

So that’s what we are talking about, breaking the law.

are you sure about that? As far as I know, a regulatory agency can’t create a law to say that something is ilegal. Therefore, if there is no such law in place what you’re saying is nonsense.

 

[Thirty7ven]

are you sure about that? As far as I know, a regulatory agency can’t create a law to say that something is ilegal. Therefore, if there is no such law in place what you’re saying is nonsense.

Create a law?

Microsoft and Activision Prohibited From Acquiring Interest in Each Other by CMA

The UK CMA has temporarily forbidden Microsoft and Activision from acquiring a stake in each other through an interim order published today.

mp1st.com

What’s up with videogame fans having shorter memory span than retirement home residents?

 

[Topher]

are you sure about that? As far as I know, a regulatory agency can’t create a law to say that something is ilegal. Therefore, if there is no such law in place what you’re saying is nonsense.

That isn't creating a law. That is enforcing the laws. Police don't "create a law" every time they arrest someone for theft. Same thing.

 

[TheDreadLord]

Create a law?

Microsoft and Activision Prohibited From Acquiring Interest in Each Other by CMA

The UK CMA has temporarily forbidden Microsoft and Activision from acquiring a stake in each other through an interim order published today.

mp1st.com

What’s up with videogame fans having shorter memory span than retirement home residents?

For something being ilegal it needs to exist a law. CMA can only enforce what is within legislation. If there is no such law then they can prohibit anything. There is no obligation for the company to to suspend the transaction and no prohibition on completing a transaction without clearance from the CMA. At most, they may make an interim order which is what they did and also the reason why MS is pushing with the acquisition.

 

[Thirty7ven]

For something being ilegal it needs to exist a law. CMA can only enforce what is within legislation. If there is no such law then they can prohibit anything. There is no obligation for the company to to suspend the transaction and no prohibition on completing a transaction without clearance from the CMA. At most, they may make an interim order which is what they did and also the reason why MS is pushing with the acquisition.

https://assets.publishing.service.gov.uk/media/645cac312226ee000c0ae5fd/Interim_Order_.pdf

 

[DeepEnigma]

For something being ilegal it needs to exist a law. CMA can only enforce what is within legislation. If there is no such law then they can prohibit anything. There is no obligation for the company to to suspend the transaction and no prohibition on completing a transaction without clearance from the CMA. At most, they may make an interim order which is what they did and also the reason why MS is pushing with the acquisition.

Explain how they forced Facebook to sell Giphy and blocked nVidia from acquiring ARM.

This is not going to end like you think it will.

 

[intheinbetween]

I believe if MS wins the FTC trial then the deal will pass through

 

[Varteras]

Create a law?

Microsoft and Activision Prohibited From Acquiring Interest in Each Other by CMA

The UK CMA has temporarily forbidden Microsoft and Activision from acquiring a stake in each other through an interim order published today.

mp1st.com

What’s up with videogame fans having shorter memory span than retirement home residents?

Cognitive decline is common among those with poor diets. That shit has been on the rise in many countries. We're heading for an entire generation of 50 year olds who can't remember if they just shit their pants.

For something being ilegal it needs to exist a law. CMA can only enforce what is within legislation. If there is no such law then they can prohibit anything. There is no obligation for the company to to suspend the transaction and no prohibition on completing a transaction without clearance from the CMA. At most, they may make an interim order which is what they did and also the reason why MS is pushing with the acquisition.

The CMA IS the law in the UK when it comes to commerce. They were empowered by the UK government to tell companies what they can and cannot do within their borders. If the CMA tells you no, and you do it anyways, you are in contempt of a UK authority.

 

[ShaiKhulud1989]

breaking the law.

1106 pages in, people are still thinking that MS will somehow evade the CMA with some sort of schemes. Sigh.

 

[Astray]

Actually it would be illegal. MS has been prohibited to invest in ABK in anyway shape or form by the CMA while the process is ongoing.

So that’s what we are talking about, breaking the law.

Probably yes, hence me saying this is a hail mary pass.

You wouldn't do this if you feel secure ABK would just re-up.

 

[The Pleasure]

honestly if Microsoft does try to move forward with this against the wishes of their two biggest territories regulators, we might be looking at a new round of monopoly busting…

The dream is to spin xbox from Microsoft and watch Pho Spender lose daddy Nutella and his billions upon billions of dollars and be left with the consoles profits as their force.

 

[Topher]

For something being ilegal it needs to exist a law. CMA can only enforce what is within legislation. If there is no such law then they can prohibit anything. There is no obligation for the company to to suspend the transaction and no prohibition on completing a transaction without clearance from the CMA. At most, they may make an interim order which is what they did and also the reason why MS is pushing with the acquisition.

CMA has determined that this acquisition would result in a significant lessening of competition. UK gives them that power and so, factually, it is law. And yes, CMA has every right to enforce it. If Microsoft willfully breaks that law then they will find themselves in another UK court facing criminal charges.

 

[DeepEnigma]

The dream is to spin xbox from Microsoft and watch Pho Spender lose daddy Nutella and his billions upon billions of dollars and be left with the consoles profits as their force.

They'd be done in 10 years or less as a first party brand.

 

[Topher]

Explain how they forced Facebook to sell Giphy and blocked nVidia from acquiring ARM.

 

[Bernoulli]

Explain how they forced Facebook to sell Giphy and blocked nVidia from acquiring ARM.

This is not going to end like you think it will.

 

[Unknown Soldier]

Today's reminder that Xbox effectively only exists in 2 markets: US and UK. It's a tiny or nonexistent presence everywhere else in the world.

The regulators of both markets where Xbox exists have now moved to block the acquisition.

Kinda makes you think, huh?

 

[The Pleasure]

They'd be done in 10 years or less as a first party brand.

I'd say five or less. Perhaps a pc only party. They did that since the early 90s.

 

[dotnotbot]

Good ol' malicious Microsoft

 

[Varteras]

They'd be done in 10 years or less as a first party brand.

They'd be done in 5 years. Xbox does not bring in enough money to sustain itself on its current business model. Not only would it lose Microsoft's hundreds of billions, it would lose unfettered access to all of their other resources. Even now, Xbox barely competes globally. They'd be hard pressed to battle Nintendo. Nevermind PlayStation, whose parent company is already looking into trimming its business diversity and focusing more into entertainment with electronics on the side.

 

[dibella360]

Am I wrong for thinking this... right now Microsoft has to pay $3B to Activision. When I look into the largest fines the CMA has ever placed on a company, it appears to be the facebook/GIPHY case ... and the fines were "GBP 50.5 million and GBP 1.5 million".

As it stands, Microsoft is paying 3 billion regardless and is getting nothing .... but if the CMA fees are less than this; it provides them with all the IP/studios, time to fight it in court, and the option to remove themself from the UK if needed. Hell, even if they are forced to divest afterward (like Facebook/Giphy) ... they could potentially break even after the sale.

CN06 - CMA imposes record fines for breaches of initial enforcement order in merger cases

CMA imposes two fines of £50.5 million and £1.5 million on Facebook and a fine of £4.7 million on JD Sports / Footasylum for breaches of IEOs.

www.ashurst.com

 

[ShaiKhulud1989]

As it stands, Microsoft is paying 3 billion regardless and is getting nothing .... but if the CMA fees are less than this; it provides them with all the IP/studios, time to fight it in court, and the option to remove themself from the UK if needed. Hell, even if they are forced to divest afterward (like Facebook/Giphy) ... they could potentially break even after the sale.

CMA fines in case of MS/ATVI are 10% of MS global revenue. So yeah, they could break. Not even though.

 

[DeepEnigma]

CMA fines in case of MS/ATVI are 10% of MS global revenue. So yeah, they could break. Not even though.

Which would be $20b a year. And that is revenue, which will heavily eat into profit if not almost swallow all of it up.

$3b one time fee is far more attractive in that case.

 

[dibella360]

.

 

[DeepEnigma]

.

Revenue, not income.

Microsoft Revenue 2010-2023 | MSFT

Microsoft annual/quarterly revenue history and growth rate from 2010 to 2023. Revenue can be defined as the amount of money a company receives from its customers in exchange for the sales of goods or services. Revenue is the top line item on an income statement from which all costs and expenses...

www.macrotrends.net

Microsoft annual revenue for 2022 was $198.27B

We are talking almost $20b if not more when Activision gets counted.

 

[dibella360]

Revenue, not income.

Microsoft Revenue 2010-2023 | MSFT

Microsoft annual/quarterly revenue history and growth rate from 2010 to 2023. Revenue can be defined as the amount of money a company receives from its customers in exchange for the sales of goods or services. Revenue is the top line item on an income statement from which all costs and expenses...

www.macrotrends.net

We are talking almost $20b if not more when Activision gets counted.

Thanks for sharing this.

 

[Unknown Soldier]

Microsoft going through with the merger anyways would be the equivalent of launching nukes. It is an outcome which would end in Mutually Assured Destruction. No sovereign nation state would stand for a multinational corporation just deciding laws no longer apply to them when inconvenient. The US FTC is already trying to block this acquisition, imagine how they would react if Microsoft decided laws no longer applied to them? They would react much like they did in 1999-2000 except that this time they WOULD ensure that MS was carved up into small pieces like Standard Oil was.

Personally I would envy the UK, I would love it if an entire nation did an experiment where no one used Windows anymore. Imagine a nation free of Windows. The world would soon see it would be a better world. That's not an outcome MS would ever want to test, they never want to actually try a scenario where people ever found out they don't need or want Windows.

 

[jorgejjvr]

Does MS have until July 18 for the deal to go through, if they can't, then it's over? Is that how it works or am I missing something? Does this means it wont close?

 

[Elios83]

Does MS have until July 18 for the deal to go through, if they can't, then it's over? Is that how it works or am I missing something? Does this means it wont close?

In theory they could re-negotiate an extension with Activision but it would become much more expensive for Microsoft given the financial and strategical risks involved. It would also be subject to a new approval by shareholders.
All signs (both comments from Microsoft's legals with CAT and today's news about FTC) are pointing to the fact that parties are not seeing a future past the current contract expiring date on July18th. So either they find a way to close before that date or it's likely over.
They don't have a easy way out though, especially if FTC is able to force s preliminary block in the US soon.