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Microsoft is buying Activision Blizzard for $68.7 billion

639 posts in this topic

7 minutes ago, Afura_33 said:

I mean you never know, we have seen a lot of publisher making statements and doing the exact opposite of what they said later :(

 

You'd have to be wilfully naïve to take Microsoft at their word. A detail not often talked about is that Sony had zero of this when they bought Bungie, who themselves came out and stated they'd continue multiplatform. Activision however is not doing that and backing up Microsoft's statements on the matter of multiplatform as far as I know. Might be one of those cases where Microsoft can more freely lie about these things but Activision chiming in certain things could really hurt what Microsoft get what they want.

 

1 minute ago, Lance_87 said:

I'm just tired of this whole story. I'm seeing the worst coming out of people, insults, console wars etc...

 

People are going to troll and I wouldn't look too much into it. Fake outrage might help among themselves on twitter/forums/whatever but it won't do a thing when it comes to the regulators. If referring to the companies/their representatives, they're still very subdued with both sides still spouting the nonsense that they're all friends. After all, what type of friend would be trying to destroy the traditional market you (Sony) do great in to force everything into a type of market that it is thought you'd not be able to compete in? Only the bestest of friends obviously.

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There had been talk that Microsoft was going to make their position even clearer and Spencer just had an interview drop which might have been what that referred to.

 

All in all it was much of the same stuff, though Spencer was a bit more insistent I suppose constantly claiming in essence that people need to simply believe him and that he has no secret plan to hurt PlayStation (I guess he can't say Microsoft doesn't even see Sony as a competitor as internal stuff showed that to have been an arrogant lie). Something that was new was that Spencer must now agree with the notion that their "deal" sent to Sony was inadequate as he says that he is ready to provide an even longer deal that Sony & regulators would be happy with. Big loss for the Microsoft supporters whose reaction to Sony rubbishing the deal being "then they should give them no deal at all and see how they like it". Turns out that in the real world you can't just throw up middle fingers and walk off.

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Now apparently it’s over Candy Crush. Phil changing his story more than most people change their socks. He’s just looking like a desperate idiot now.

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Microsoft asked China's regulator to put them through a simplified process to rubber stamp the deal but China has rejected such a request. China hasn't been in the news but I wonder if they'll get an order from up top to stop this. China has been attacking gaming a lot lately and they may deem Activision a company easier to bully (they've done so successfully already) to do what they want than Microsoft.

 

9 hours ago, MidnightDragon said:

Now apparently it’s over Candy Crush. Phil changing his story more than most people change their socks. He’s just looking like a desperate idiot now.

 

Its not new as Microsoft has been saying that to the regulators all this time. They've been outright telling them that they are nothing in mobile (if I recall correctly that is literally their words), that the deal is all about mobile (creating competition against Google), and so there is no reason to block the deal. Subscriptions/Cloud stuff is also only supplementary and not Microsoft trying to buy their way into having that replace traditional gaming. 

Ultimately what Microsoft would want would be for the public to agree with their angle here so the regulators are more likely to go with it. As long as Sony and Consoles are a focus Microsoft's claims of "creating competition" are laughable. If they can shift the talk to Google and Mobiles however then it starts to sound a lot better. The problem of course is that Microsoft can't even direct its supporters who may well be hurting them more than detractors are, by constantly going on about gamepass which Microsoft would rather no one talk about in relation to this deal. 

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10 hours ago, MidnightDragon said:

Now apparently it’s over Candy Crush. Phil changing his story more than most people change their socks. He’s just looking like a desperate idiot now.

 

But... but... Phil is a true gamer, just like us. He even knows how to hold a controller correctly, unlike that clueless idiot Jimbo 😏 

 

Joking aside, I don't know why so many people put Phil Spencer on a pedestal. He's done some good things for Xbox (not exactly a big ask considering they were already at rock bottom for so long, naturally the only was was up), but he's also the biggest bullshitter in the entire industry. At least with Jimbo whether you love him or hate him, you know what you're getting. Phil constantly says one thing and then proceeds to do the polar opposite, yet he's completely immune to any sort of criticism. It's bizarre. He isn't in any way better than Jim Ryan, and in fact comes across as being infinitely more fake than him too.

 

I'd expect the narrative around this deal to keep changing as we trudge through to the bitter end. 

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23 hours ago, The Alchemist said:

But... but... Phil is a true gamer, just like us. He even knows how to hold a controller correctly, unlike that clueless idiot Jimbo 1f60f.png 

 

Joking aside, I don't know why so many people put Phil Spencer on a pedestal. He's done some good things for Xbox (not exactly a big ask considering they were already at rock bottom for so long, naturally the only was was up), but he's also the biggest bullshitter in the entire industry. At least with Jimbo whether you love him or hate him, you know what you're getting. Phil constantly says one thing and then proceeds to do the polar opposite, yet he's completely immune to any sort of criticism. It's bizarre. He isn't in any way better than Jim Ryan, and in fact comes across as being infinitely more fake than him too.

 

I'd expect the narrative around this deal to keep changing as we trudge through to the bitter end. 

 

I agree. Better someone who gives you things straight rather than a guy who puts on a front.

 

Ultimately fans are fans and are going to accept his words at face value regardless of reality. Many also have this idea that Spencer is a nicer face to Microsoft when actually this has been Microsoft's policy for ages. They got a really bad reputation of having no taste and just throwing money around to destroy the competition which got them in trouble with regulators. So instead put on a smile and talk nice about everyone as you work to destroy them instead, so if someone attacks them then they're just being haters dredging up old mistakes. The previous Xbox management was just soulless, incompetent, and/or whatever else and unable to do the PR Spencer is doing now. It is to the point that I remember when Gold got doubled in price out of nowhere Microsoft's supporters had this silly "If only the Tsar knew" view of it all, where they believed that some faceless suit must have doubled the price and Spencer knew nothing about it, naturally when Microsoft got too much heat Spencer found out about it he shut it down.

 

Spencer's PR scheme with this deal and beyond is simple enough as I've said. State that Sony and Nintendo are not competition (information from these reviews by regulators reveal that to be a lie), that they don't want to destroy them (Microsoft's first goals in the console business were literally to buy out Nintendo and take Sony out), and try to frame Microsoft as a defender of gamers against the evil empires of Apple, Google, and Amazon if it ever gets going, companies which gamers don't exactly like unlike Sony/Nintendo.

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On 11/19/2022 at 0:53 PM, The Alchemist said:

He isn't in any way better than Jim Ryan, and in fact comes across as being infinitely more fake than him too.

 

Thank God someone said it.

 

So many people go on and on about how "nice" Phil is, and how much he "cares" about gamers (regardless of whether or not they are a diehard Xbox fan).

But he's so blatantly and obviously fake as fuck, and I'm completely confused as to how people can be so oblivious to something staring at them directly in their face. lmao

 

He's just an example of a wolf in sheep's clothing, and one that's unfortunately really good at spewing constant bullshit that too many sheep will trust at face value. 

Edited by Zephrese
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https://www.nytimes.com/2022/11/21/technology/microsoft-activision-deal.html

 

This article has a lot of good stuff.

 

Quote

Microsoft accused Sony of misleading the regulator, saying it “overstated the importance of Call of Duty to its viability.” Mr. Spencer said that “maintaining and growing the existing Call of Duty business is pretty central to the economics of the deal.” In a statement, Jim Ryan, the chief executive of Sony Interactive Entertainment, said it was “not true” that his company had misled regulators. He said that Microsoft was “a tech giant with a long history of dominating industries” and that “it is highly likely that the choices gamers have today will disappear if this deal goes ahead.”


Microsoft said that on Nov. 11 it offered Sony a 10-year deal to keep Call of Duty on PlayStation. Sony declined to comment on the offer.

 

This is exactly what I meant. Spencer will say Microsoft is a friend to Sony and then (usually in private, but we're getting it out there thanks to regulators), accuse them of being an evil empire trying to hold poor little brave Microsoft down. How dare Sony not simply accept our good guy act and state the obvious. The simple fact is that if Microsoft wants to make money then yeah, keeping it on PlayStation is the way. However, its obvious to me and others that Microsoft's main aim is to expand gamepass to the point that it destroys traditional game buying and in turn destroy their competition. Microsoft can easily swallow any loss, which we wouldn't even know the scope of as Microsoft hides all such numbers, from making CoD exclusive if it means hurting Sony and then making far more money down the line.

We went from "we'll do as the contracts say" to "we'll add 3 years on top" to rumoured 6 years to now 10 years. I thought markets can change so rapidly that Microsoft couldn't make such long term commitments? Why not 100 at this point? 1000? The CMA has already told Microsoft that such contracts are worthless so this sort of stuff doesn't seem to be landing like Microsoft thought it would. After all Microsoft could for example simply change CoD's branding to something like say "Warzone" and oh look, there are no more CoD games.

 

The constant public offers are also quite something. You don't do such business in public, everyone knows that, but Microsoft appears desperate to do business in public with Sony so I suppose they can tell regulators "look Sony publicly accepted our deal so everything is good, please rubber stamp the deal".

 

Quote

Last month, Mr. Spencer and other Microsoft executives brought an Xbox, a PlayStation, a Nintendo Switch and other devices to a meeting with regulators in London, where they showed off Call of Duty and other games to illustrate a dynamic market, people familiar with the visit said.

 

Microsoft is now sending Spencer himself to try and work his tricks on regulators. I wonder what exactly he showed off. Did he present say God of War and Mario and say look at how popular and different these games are, hence you must allow us to have CoD/whatever else?

 

Quote

In June, Microsoft hammered out an agreement with the C.W.A., promising not to oppose unionization at Activision. The negotiations involved “more lawyers than a lawyer convention,” Chris Shelton, the union’s president, said in an interview. The concessions turned the union into supporters of the deal.


Last month, Mr. Shelton met with Ms. Khan and praised Microsoft’s commitment to remain neutral in union campaigns and said the deal should be approved.

“The F.T.C. told me, ‘A lot of companies promise lots of things, then they never keep their promises,’” he recalled. He said he told the agency that the agreement was rock solid, and in writing.

 

Embarrassing stuff from this union. Not only is the FTC correct that companies will promise anything and everything to get a deal through (look at any company that promises there won't be layoffs and then instantly lays people off the moment the deal clears), but they're really wowed by Microsoft putting it to paper that Microsoft won't get in their way? Apparently they are not aware that Microsoft like to let their holdings operate independently to a good degree. So if the deal goes through and then Activision shuts it down... it ain't Microsoft shutting it down, it is just something their independently minded holding decided. Spencer himself I recall uses this sort of trick whenever some part of Xbox is failing and people ask him about it, well it is up to the studio heads. Spencer is the boss but he ain't a tyrant, so if they want to do X that way then that is their business.

 

Quote

Whether Microsoft succeeds in gaining regulatory approval to buy Activision, which makes games such as Candy Crush and Call of Duty, will send a message about Big Tech’s ability to expand in the face of mounting fears that industry giants wield too much power. If Microsoft, whose public affairs operation has spent the past decade building the company’s nice-guy reputation, can’t get a megadeal through, can anyone?

 

Even in an article like this, the fact that nice guy Microsoft is obvious fake PR is stated. Just in case anyone thinks that me saying it is fake is just me hating or whatever. Everyone out there who knows anything knows that Microsoft is still the same company, they've just changed their tactics to be more undercover. Instead of stabbing you in the front they'll stab you in the side.

 

Quote

Obtaining approval for the acquisition is critical for Microsoft. Gaming has become its most important consumer business, surpassing $15 billion in annual sales largely under the Xbox brand. The compensation for Satya Nadella, Microsoft’s chief executive, is partly tied to the growth of Game Pass, the company’s Netflix-like subscription service for gaming. And Microsoft agreed to pay Activision as much as $3 billion if the deal fell apart.

 

Ah. That makes more sense on why Nadella is such a money mark for gamepass.

 

Quote

Activision also needs the sale to go through. It was in distress a year ago, with a falling share price as it dealt with revelations of sexual misconduct and worker unrest.

 

Activision (and I believe Microsoft also) are actually getting sued exactly for that reason. That Activision and Microsoft have conspired to buy Activision at a lower price than normal. The reason to do this for Kotick and company is that if the heat they had continued there was the chance that they'd lose their positions and not get a massive payout. If Microsoft buys them then irrelevant of whatever Kotick and company have done, Microsoft will be rewarding them with a massive amount of money.

 

Quote

Regulators are also worried what the deal might mean for the future, when cloud computing lets people stream sophisticated games to various devices, including mobile phones.

In September, the British regulator expressed concern that combining Activision’s library of games with Microsoft’s cloud computing prowess would give Microsoft “an unparalleled advantage” over game-streaming competitors. Microsoft argued that it had “no advantage” because its streaming was not supported by its Azure cloud technology.

In its annual report this year, Microsoft said its streaming product “utilizes” Azure. The company said that while its gaming servers shared data centers with Azure, the hardware was different.

 

While not getting the press that CoD does this one is a big one. Microsoft's response is laughable. It ain't supported by Azure so thus it ain't a problem... what stops Microsoft after the deal changing that? Zero. Then on top of the response being nonsense, it turns out they were lying anyway. Of course the hardware is different, they need the "blades" as they call them specifically for the Xboxes so Microsoft ain't lying that the hardware is different, but it is an irrelevant difference and doesn't matter when it comes to utilizing Azure. Then Microsoft supporters wonder why regulators are so distrustful of Microsoft, when they are constantly getting caught up in lies that their own previous statements destroy.

 

Quote

And in a sign that the F.T.C. may be building a legal challenge to the deal, two people said it had recently asked other companies about offering sworn statements to lay out their concerns.

 

Microsoft may well have fumbled this big time. To try and get Sony off them they've tried to point to Google and Apple being their real enemies. This has failed. Now you imagine they'll be telling Google and Apple that Sony is their real enemy and not them. It could well end up that everyone that Microsoft has tried to fool ends up against them. Nintendo would be the biggest kicker though I think. Spencer has been saying he wants CoD on Nintendo to try and coax some nice words out of Nintendo (to no avail) so it'd be really funny if they also turn up and oppose Microsoft. I would imagine they don't as like Valve, Nintendo seems to think this sort of stuff is irrelevant to them.

Edited by Rozalia1
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This whole thing has degenerated a lot today... have you guys read the latest news?

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I feel that this won’t go through. And worst case scenario it doesn’t, what will M$ do to save face?

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56 minutes ago, Lance_87 said:

This whole thing has degenerated a lot today... have you guys read the latest news?

what happened?

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22 minutes ago, Doctor_Gunner said:

what happened?

FTC is probably gonna file an antitrust suit to prevent the acquisition. 
 

And it’s funny the game media treats Phil like a white knight when he’s anything but.

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13 minutes ago, MidnightDragon said:

FTC is probably gonna file an antitrust suit to prevent the acquisition. 
 

And it’s funny the game media treats Phil like a white knight when he’s anything but.

if i had to bet i would say that it will happen in the end. all this seem like a smokescreen tbh but we will see...

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That article is a bomb. Google stating that Microsoft degrades Gamepass if used on Chrome is nasty because that is classic Microsoft and if they're doing that right now, to a big company like Google, then what are they going to do if they get in a stronger position. Microsoft I'm sure will respond with something like "we've improved it on our product, not degraded it on others", but it is all the same difference. On the matter of the Cloud Microsoft responded to claims of them adding CoD to Cloud gaming which would give them an advantage in that space by stating that doing CoD on Cloud would not be optimal or some such so they wouldn't do that. Note, it ain't a problem for Halo which is their current flagship FPS so another barefaced lie from Microsoft as they will never admit any concern is legitimate.

 

Also, Spencer better have his boss firmly wrapped around his finger because if this deal fails he should certainly be fired as many of Microsoft's arguments get destroyed by Spencer's own words. It doesn't matter that he is saying all the right stuff now when people can just look his previous comments when he didn't have to worry about getting this deal through. He ain't the only guy caught out like this but certainly the most notable. The best detail of all of this to me is the fact that regulators are looking at the future of the market, Subscriptions/Cloud, which hopefully won't takeover but Microsoft has certainly bet on them doing so. As I like to bring up, Microsoft boasted about how Sony/Nintendo aren't even competition anymore to them as the market will be evolving and Sony/Nintendo won't be able to compete with mighty Microsoft who have so many advantages. Now that regulators are looking at this based off that, Microsoft is crying that Sony is invincible and they need this to have any chance.

 

As for talk that the FTC challenging doesn't matter because they'll just lose in court. The deal has to pass everywhere or it fails. If the FTC challenges then that will give support to those in the EU and CMA who would want to do the same, who'd perhaps not do so normally due to it being awkward to be the only one denying a deal this big. Unlike with the FTC Microsoft won't be able to count on the courts likely ruling against the regulator. In the case of the CMA a defeat there would be the end of all this full stop.

 

1 hour ago, kidson2004 said:

I feel that this won’t go through. And worst case scenario it doesn’t, what will M$ do to save face?

 

Depends on what effects it has. If Spencer & Nadella get punished hard for it then that could cause Microsoft to do what they were going to before which would be to exit the console platform business entirely, perhaps keeping some studios (ironically I'm sure Activision would be interested in buying some of them, could even use Microsoft's own money to do it) to be third party on PC/PlayStation/Nintendo. For example the failure causing money men to demand that Microsoft shows the costs of Gamepass to the company and it coming out of that looking like a money pit. The "Netflix of Gaming" is literally the only reason Xbox didn't get cut before so if the money people lose faith in it then bye bye. This is the absolute worse case for Microsoft's current management.

 

Another possible scenario is this spooks Microsoft like some previous losses did and they stop trying to buy their way to victory and instead invest in their own studios more which would be something that wouldn't get them any heat with anyone. This is perhaps the overall nicest result, though one Microsoft would likely dislike the most.

 

Then you have Microsoft getting angry and simply throwing their money elsewhere. The worse case of this would be them simply buying X0 billion's worth of smaller companies, but I'm starting to think that might be unlikely. Xbox is badly ran as it is and adding so many studios under it would be a disaster waiting to happen, which I assume top management knows hence why they have been buying big companies and letting them act independently from Xbox management. Instead they might decide that they'll simply outbid Sony on the moneyhats and promotional deals such as those that exist with Activision. Due to marketshare Microsoft has to significantly outbid Sony so it'd be costly, but obviously Microsoft has the money if they decide to spend it. The outspending Sony on moneyhats/promotional deals is the most likely result I would think.

 

Oh, and of course Microsoft's reaction to losing this could well be doing absolutely nothing and just continuing as normal. Second most likely result I'd say.

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22 minutes ago, Rozalia1 said:

 Depends on what effects it has. If Spencer & Nadella get punished hard for it then that could cause Microsoft to do what they were going to before which would be to exit the console platform business entirely

 

Microsoft have considered selling off the Xbox division a number of times in the past, or failing that, axing it completely. They obviously decided to stick with it and give it another chance. This generation is going better for Xbox, and may end up being their strongest yet in terms of console sales etc., but it will be make or break for them. There's a lot riding on the path they've chosen to take with the subscription model and it being the future they want for the industry. Some people seem to think that it will win out, but I think it's far from being clear-cut. MS is really the only one pushing the sub model, with everyone else sticking with the traditional model, or at least a hybrid of the two. We're seeing Game Pass reach a peak where it really isn't growing all that much anymore, to the point where even MS have stopped shouting from the rooftops about subscriber growth, which is something they used to do regularly. That's not to even mention that we're still to see what the long-term implications of such a model are regarding things like sustainability, profitability, game quality declining etc. Right now it's clear that Xbox is massively loss leading in their attempt at playing catch-up to Sony. I think ultimately there may be room for both models, but I don't think that will be enough for MS. I feel like they need the sub model to win out completely, because their ultimate plan is to be the one who dominates in the event of the subscription model taking over the industry. That's largely why they're spending so much on acquiring studios and IP, and particularly publishers. 

 

I've never really understood why Microsoft doesn't just bail on making consoles completely and instead act as a third-party publisher. To me that would make a lot more sense, because they can still push their subscription. They've been saying for years now that console sales don't matter, that it's more about overall engagement and Game Pass etc. They keep saying they want their games in as many places as possible, or wherever Game Pass is available. They don't necessarily need to make Xbox consoles to sell games, and let's be honest here, and this isn't console war nonsense, but even a great generation for Xbox is a poor one for PlayStation. There's such a gulf between the two, especially in hardware sales, so why not focus purely on managing their studios and making games, and then publish those games everywhere like PlayStation, Nintendo and PC? Obviously as it stands, Sony will not allow Game Pass on PlayStation, but I'm sure Sony would say yes to Game Pass on PlayStation if Microsoft guaranteed Sony that they were getting out of the console space. That would guarantee continued dominance for PlayStation, so they wouldn't really have any reason to say no to Game Pass, especially with a nice cut every month. The only other stipulation I imagine would be that Game Pass would only be allowed for Microsoft published games, no third-party stuff as it would cannibalize PS Plus. Maybe I'm completely wrong, but to me it makes way more sense than Xbox's current strategy of trying to push a subscription model whilst still making hardware, when in reality, hardware is irrelevant in their plans. 

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13 hours ago, The Alchemist said:

This generation is going better for Xbox, and may end up being their strongest yet in terms of console sales

The Series S has been giving PS5 a run for its money, no?

 

13 hours ago, The Alchemist said:

Right now it's clear that Xbox is massively loss leading in their attempt at playing catch-up to Sony.

This maybe a setback for them, but I think with them owning Obsidian, Bethesda, and Zenimax essentially means that they own all of the great western RPGs. Avowed, Elder Scroll VI, Starfield, and Outer Worlds 2, things are looking up for them.

Edited by boorish_brute
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7 hours ago, boorish_brute said:

The Series S has been giving PS5 a run for its money, no?

 

PS5 recently passed the 25m milestone, whilst Xbox Series sales were around 17-18m the last time I checked. X and S sales are not counted separately, but we've heard that the S is accounting for at least half of all sales for Xbox, so let's say the S has sold 9m. That's a decent amount, but there's a few caveats to consider. PS5 supply was so constrained since launch that many people looking to pick up a next-gen system may have jumped to Xbox, simply because they were much easier to find during this time, particularly the S which was very easy to find even when supply constraints were at their worst. Secondly, the S is a budget console and therefore cannot be directly compared to the X or PS5, because it's in a completely different category. The price of the S automatically makes it more attractive to a wider group of people, hence why it's accounting for at least half of the sales for Xbox. 

 

Xbox is undoubtedly doing much better this generation in terms of sales and I'm sure that for a while at least, the S will continue to sell well given its value proposition. PS5 supply is projected to skyrocket in 2023, with Sony reportedly expecting to sell upwards of 30 million PS5s in the next fiscal year (March 2023 - March 2024). That's an insane amount if true. Regardless of whether they hit that precise number or not, they will undoubtedly sell a lot more PS5s going forward once production and supply constraints have lifted and it's then that I expect a gulf to begin forming again between PS5 and Series sales. It isn't too large at the moment due to the aforementioned reasons, but when the main reason for that no longer exists from next year on then things will change. 

 

7 hours ago, boorish_brute said:

This maybe a setback for them, but I think with them owning Obsidian, Bethesda, and Obsidian essentially means that they own all of the great western RPGs. Avowed, Elder Scroll VI, Starfield, and Outer Worlds 2, things are looking up for them.

 

It isn't just a setback, it's a major risk that may never pay off. This is what I was alluding to in my previous post. Microsoft has seemingly given Xbox unlimited funds in their quest to conquer the industry with their subscription model, but that money will stop eventually and Microsoft will want to see returns, but we're yet to see if it will actually pan out that way.

 

The studios you mentioned are irrelevant if they can't be managed correctly. Despite Xbox having 20+ studios, we're yet to see anything of note from the majority of them. Xbox has hardly had any exclusives so far this generation, which will never not be shocking to me. A lot of the studios have had big issues as well. We've seen previously announced games constantly get pushed back, changed, new directors and heads come in. It all just seems like a chaotic mess. Xbox is notoriously bad at managing studios, something they've never really rectified, and something that I imagine will get even worse as they add even more studios through acquisitions.

 

Then you have the other issue of everything going to Game Pass, which I've already stated is an experiment we're yet to see the long-term implications of. Everything is one big 'if' for Xbox this generation. I guess we'll need to wait and see how things go. It'll be interesting for sure.

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10 hours ago, MidnightDragon said:

FTC is probably gonna file an antitrust suit to prevent the acquisition. 
 

And it’s funny the game media treats Phil like a white knight when he’s anything but.

 

I mean the whole part after the "FTC" thing. They're basically saying that A is inferior to B, and B replies "no, WE are inferior to A!" (and vice-versa)

 

F**k them. I'm seriosly considering to quit gaming once FF7 Remake Part 3 is released.

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10 hours ago, The Alchemist said:

Microsoft have considered selling off the Xbox division a number of times in the past, or failing that, axing it completely. They obviously decided to stick with it and give it another chance. This generation is going better for Xbox, and may end up being their strongest yet in terms of console sales etc., but it will be make or break for them. There's a lot riding on the path they've chosen to take with the subscription model and it being the future they want for the industry. Some people seem to think that it will win out, but I think it's far from being clear-cut. MS is really the only one pushing the sub model, with everyone else sticking with the traditional model, or at least a hybrid of the two. We're seeing Game Pass reach a peak where it really isn't growing all that much anymore, to the point where even MS have stopped shouting from the rooftops about subscriber growth, which is something they used to do regularly. That's not to even mention that we're still to see what the long-term implications of such a model are regarding things like sustainability, profitability, game quality declining etc. Right now it's clear that Xbox is massively loss leading in their attempt at playing catch-up to Sony.

 

The admittance I think was an attempt by Microsoft to try and defend themselves against regulators, regardless it means rather than us claiming what is likely the case we know that it is the case. It'd be nice to have that for other things because Microsoft outside subscriber numbers is very secretive about it all, for what I assume being that the losses won't look good. Granted if you're doing a Netflix you are going to take massive losses to grow, but it could cause people to lose faith in it.

 

10 hours ago, The Alchemist said:

I think ultimately there may be room for both models, but I don't think that will be enough for MS. I feel like they need the sub model to win out completely, because their ultimate plan is to be the one who dominates in the event of the subscription model taking over the industry. That's largely why they're spending so much on acquiring studios and IP, and particularly publishers. 

 

I agree completely. Microsoft is not losing all of this money now just to be along for the ride, they want to be the dominant party if the subscription model they're betting so much on succeeds. If they manage it then they can not only defeat Sony/Nintendo, but they'd close the market off even to giants like Google/Amazon/Whoever and if even they can't enter then no one can.

As you said in the following post though, while Microsoft might have in essence given Xbox infinite money (well more so, Xbox would have been long out of business if not for Microsoft propping them up), eventually the grace period will time out because if after X amount of years Xbox can't make the progress they need to, then it will be assumed that they are unable to and all the money is being burned for no future gain. All those studios they have mismanaged that are behind schedule and over budget will finally find themselves in trouble also.

 

10 hours ago, The Alchemist said:

I've never really understood why Microsoft doesn't just bail on making consoles completely and instead act as a third-party publisher. To me that would make a lot more sense, because they can still push their subscription. They've been saying for years now that console sales don't matter, that it's more about overall engagement and Game Pass etc. They keep saying they want their games in as many places as possible, or wherever Game Pass is available. They don't necessarily need to make Xbox consoles to sell games, and let's be honest here, and this isn't console war nonsense, but even a great generation for Xbox is a poor one for PlayStation. There's such a gulf between the two, especially in hardware sales, so why not focus purely on managing their studios and making games, and then publish those games everywhere like PlayStation, Nintendo and PC? Obviously as it stands, Sony will not allow Game Pass on PlayStation, but I'm sure Sony would say yes to Game Pass on PlayStation if Microsoft guaranteed Sony that they were getting out of the console space. That would guarantee continued dominance for PlayStation, so they wouldn't really have any reason to say no to Game Pass, especially with a nice cut every month. The only other stipulation I imagine would be that Game Pass would only be allowed for Microsoft published games, no third-party stuff as it would cannibalize PS Plus. Maybe I'm completely wrong, but to me it makes way more sense than Xbox's current strategy of trying to push a subscription model whilst still making hardware, when in reality, hardware is irrelevant in their plans. 

 

Microsoft rubbishes hardware numbers because they're last. There is nothing more to it then embarrassment. Hardware is still important even if Microsoft really wishes it wasn't as they're reportedly taking massive losses on each console (200 bucks) they make compared to Sony (and lets not even mention Nintendo). Its apparently why they had to cancel a Gamepass only console they had in the works because it was going to be another where they lost fortunes on it and unlike with a normal Xbox there would be zero dancing around that fact.

 

The Xbox is vital to Microsoft's plans because they need to get people on Gamepass across all manner of devices and the Xbox gives Gamepass momentum and makes it look successful and generates word of mouth, which in theory will cause people elsewhere to buy in too. The problem, and the reason that their numbers are stalling, is that the vast majority of Gamepass users are hardcores on Xbox and there is only so many of those.

 

10 hours ago, boorish_brute said:

The Series S has been giving PS5 a run for its money, no?

 

This maybe a setback for them, but I think with them owning Obsidian, Bethesda, and Obsidian essentially means that they own all of the great western RPGs. Avowed, Elder Scroll VI, Starfield, and Outer Worlds 2, things are looking up for them.

 

The Series S went a long period with unsold stock (X selling out during that time) so there has been a lot more stock of them out there. PS5 has periods where there is low stock and during those periods Series S can outsell it. In short, no.

 

We'll have to see on that. They made the majority of their money on PlayStation which is out, and on top of that they're Day 1 Gamepass which means a lot of people who would have paid full price now ain't. It could also fracture their fanbase to the extent that a solid number of people just stop caring for their IPs. Going to be difficult to get a clear picture on these things as Microsoft has no interest in allowing one. I predict they'll do the usual and take the last game that was on PlayStation too and compare that number to however many people tried the new one out even if they dropped it after 5 mins, and claim they got X million of players, more than the last game so thus what a massive success it is outside PlayStation.

 

3 hours ago, Lance_87 said:

I mean the whole part after the "FTC" thing. They're basically saying that A is inferior to B, and B replies "no, WE are inferior to A!" (and vice-versa)

 

F**k them. I'm seriosly considering to quit gaming once FF7 Remake Part 3 is released.

 

FTC's concerns, like the CMA's, is on what the future market will look like and how this deal would affect Microsoft in such a situation. Microsoft already has so many advantages if the market changes to Subscription/Cloud gaming and while Microsoft naturally lies that they don't see Subscription/Cloud gaming as taking over the industry (after previously saying as such to rubbish talk of them being last)... why are they spending 70 billion then? Ultimately in these things barefaced lies are apparently better then admitting any concern is valid.

 

Thankfully I don't think Microsoft's want of the market changing like that will happen, but regardless the regulators should certainly treat it as a valid possibility that they need to guard against.

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55 minutes ago, Rozalia1 said:

Microsoft rubbishes hardware numbers because they're last. There is nothing more to it then embarrassment. Hardware is still important even if Microsoft really wishes it wasn't

 

Oh for sure, there's definitely a large element of Microsoft not wanting to look stupid, which is why they don't report console sales figures anymore and haven't done so for a long time, but I still believe that hardware isn't important in their long-term plans.

 

The idea is simply to be able to access Game Pass on any device. A smart TV, a smartphone, a streaming stick, they'll put it on anything they possibly can. Obviously having a console is still the best way to get things off the ground, because that's where your hardcore audience is, but only so many Xbox consoles get sold each generation and it's always miles behind the competition. There's also PC but that too will only add so much to the number, because there's also a lot of crossover between Xbox and PC users. This is why Microsoft would love to get Game Pass on PlayStation and they've already tried. Think about it for a moment. Microsoft would gain entry to a user base of 120m PS4 owners and a PS5 user base that will also likely exceed 100m by the end of the generation. Compare that to the Xbox user base by itself which is currently their main source of subscribers... 

 

As you've mentioned, Microsoft are making a huge loss on every Xbox console sold. Far more than what is considered typical for the industry. And for what? Just so they still end up in last place come the end of the generation. So why not do away with consoles completely and focus purely on getting Game Pass on to other platforms? They wouldn't have to worry about huge hardware losses anymore, their current user base could still access the service on existing devices, and they would gain entry to the PlayStation user base as well. It makes sense to me at least. 

 

Nintendo is a different story, because the hardware is too trash to capably run big modern titles. That said, the cloud option is there if they could work something out. I honestly think that if Microsoft worked out deals to get Game Pass onto both PlayStation and to a lesser degree, Nintendo, they would make a far bigger killing. Maybe it will happen some day, or maybe it'll all go tits up if enough people don't buy into the idea of the subscription model 🤷‍♂️

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1 hour ago, The Alchemist said:

Oh for sure, there's definitely a large element of Microsoft not wanting to look stupid, which is why they don't report console sales figures anymore and haven't done so for a long time, but I still believe that hardware isn't important in their long-term plans.

 

The idea is simply to be able to access Game Pass on any device. A smart TV, a smartphone, a streaming stick, they'll put it on anything they possibly can. Obviously having a console is still the best way to get things off the ground, because that's where your hardcore audience is, but only so many Xbox consoles get sold each generation and it's always miles behind the competition. There's also PC but that too will only add so much to the number, because there's also a lot of crossover between Xbox and PC users. This is why Microsoft would love to get Game Pass on PlayStation and they've already tried. Think about it for a moment. Microsoft would gain entry to a user base of 120m PS4 owners and a PS5 user base that will also likely exceed 100m by the end of the generation. Compare that to the Xbox user base by itself which is currently their main source of subscribers... 

 

As you've mentioned, Microsoft are making a huge loss on every Xbox console sold. Far more than what is considered typical for the industry. And for what? Just so they still end up in last place come the end of the generation. So why not do away with consoles completely and focus purely on getting Game Pass on to other platforms? They wouldn't have to worry about huge hardware losses anymore, their current user base could still access the service on existing devices, and they would gain entry to the PlayStation user base as well. It makes sense to me at least. 

 

Nintendo is a different story, because the hardware is too trash to capably run big modern titles. That said, the cloud option is there if they could work something out. I honestly think that if Microsoft worked out deals to get Game Pass onto both PlayStation and to a lesser degree, Nintendo, they would make a far bigger killing. Maybe it will happen some day, or maybe it'll all go tits up if enough people don't buy into the idea of the subscription model 🤷‍♂️

 

The fear, and it is a valid one, is that if they had cut Xbox hardware and went into Gamepass straight away they'd lose the majority of their base who want to have a console to game on. Many people out there don't want to be gaming on a phone, a TV stick, or even a PC. Considering how poor their non-Xbox Gamepass numbers are after several years of pushing it elsewhere it is clear enough that Gamepass would have been cancelled by now without Xbox. If Gamepass takes off on other devices in a big way and they've successfully transitioned many of their players into being open to gaming elsewhere, then they will undoubtedly look to cut hardware as their signature is to go for expensive raw power which Sony can match at a much cheaper rate.

 

Microsoft could certainly do an EA play type affair for PlayStation/Nintendo rather then pour money down the moneypit. There are a number of problems for management when it comes to that. To start with that downgrades their position and it would be a humiliation like never before as the story would be that trillion dollar Microsoft got subjugated by Sony, a much smaller company, one Microsoft thought they could easily overcome 20 years ago. Microsoft can't even handle the fact that they get outsold by Sony so to me they aren't going to be wanting to bend the knee so to speak, they'd much more likely simply sell off their gaming business to Google/Meta/Amazon/Tencent/Whoever then continue in a to them humiliated state. Secondly that would be giving up on their new dream of dominating Subscription/Cloud gaming to the point that they start getting Apple money rolling in (Apple makes easy fortunes with their store). Finally, as I said before, top management doesn't seem to be ignorant of the fact that Xbox is heavily mismanaged... which isn't a problem currently as Xbox can waste as much money as it wants in chase of the dream, but if it becomes a third party then budgets will have to be enforced and games will have to be on time which will be a disaster. As for why management doesn't clean house if they know Xbox is mismanaged, apparently Nadella & Spencer are firm believers in the "old boys club" so as long as they like you personally you can be as incompetent as you want.

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Sony's response to CMA: https://assets.publishing.service.gov.uk/media/637cecede90e076b8043d8cd/Sony_Interactive_Entertainment.pdf

Microsoft's response to CMA: https://assets.publishing.service.gov.uk/media/637cec9dd3bf7f5a0b33f881/Microsoft_s_response_to_the_Issues_Statement.pdf

 

The responses for those who have yet to see these links. There is of course redacted information but you can tell from what is there a number of things. Microsoft here counter to Spencer's previous words of everything being dandy claims again and again that they are incompetent and their subscription/Cloud gaming service is failing. Remember Microsoft missing their goals and the defence was that such a thing is an internal goal that is not expected to be hit? Microsoft uses it here fully to claim Gamepass/Cloud gaming is failing and not a threat to anybody which... how does Microsoft making widely inaccurate forecasts defend them? Most be Microsoft's one neat trick that 100% guarantees getting past regulators. Another funny defence is the talk that Activision has no wants at all to involve themselves in Subscription/Cloud gaming, thereby if Microsoft doesn't buy them then no one will be closed off from making use of Activision in that area because... I suppose it is written somewhere in the stars that only Microsoft can buy Activision. On top of that... so if Activision doesn't like Subscription/Cloud gaming then... does that mean Microsoft won't put their games on those services? Who is buying who exactly? That ain't on no contract in regards to the deal.

 

Obviously there is far too much to go into here. On somewhat related news, Slack has been successful in getting their Antirust complaint against Microsoft regarding teams to get reviewed in the EU.

 

https://www.neowin.net/news/eu-reportedly-gearing-up-to-investigate-microsoft-over-teams-antitrust-complaints-from-slack/

 

Sony/Google/Slack are currently all attacking Microsoft at the same time which is interesting. Speaking of Slack:

 

https://www.neowin.net/news/microsoft-little-companies-like-slack-come-and-go-but-we-have-it-all-covered/

 

Microsoft in 2016 claiming that Slack are not competition to them (after trying and failing to buy out Slack) as their business is just so much more high level than theirs. Just like Gamepass/Cloud gaming makes them so much more high level than Sony/Nintendo to the point they ain't even competition anymore (which Microsoft now pleads heavily otherwise). I was not aware that this attitude from Microsoft went beyond Xbox. Outside making Microsoft feel good I can't even see the purpose of such a statement.

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The FTC was always going to get involved, MS knew this going in.

They just have to set up an agreement that COD will stay on PlayStation for whatever time period (ten years has been one number thrown out there) and get rid of all the old abusive AB employees.

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