Email proves Microsoft's Activision bid is designed to eliminate Playstation
axios.com
axios.com
The email may well prove that Microsoft has this plan, I certainly wouldn't put it past Microsoft. It is in the established nature of Microsoft to behave in such anti-competitive ways, the shoe fits. But when the plantiff is using circumstantial evidence to deduce what the email must have contained, I think it's quite a stretch to say the email "proves" anything.
Probably depends on the scope / kind of business. And maybe the kind of people running it?
E.g., my wife has no desire to grow her photography business (a sole proprietorship). She's content for it to be a source of income for however long she wants to keep doing it.
Sony on the other hand, has been trying to keep their platform closed.
https://www.forbes.com/sites/paultassi/2022/03/14/playstatio...
>Sony's public rationale of being skeptical of crossplay was stated to be about the “risks” of exposing Sony players to non-PSN markets, but really, it seems to just have been about trying to throw its big sales lead around.
If someone at Microsoft had sent an email a month before the Activision deal saying, "we want to crush the next-gen Playstation," that could be evidence that the Activision deal is part of a plan to monopolize the market, but it could also simply be somewhat random nonsense puffery talk like when someone says "our graphics blow away the competition!" Given that it was sent back in 2019, the distance in time from the Activision deal makes it potentially less relevant.
The allegation is that the email is "uncontroverted evidence that Microsoft had the intention to put its main competition, the Sony PlayStation, out of the market." What I want to know is whether the email is a somewhat innocuous, "we want to relegate the PlayStation to the status of an also-ran while we become the premier gaming console" or something more serious like "our strategy to drive Sony out of the market is by buying up independent publishers and then making their games platform-exclusives to the Xbox." For the first one, I'm sure I could dredge up communications at any company that are similar. For the second, it shows a clear danger to competition and the market.
That seems like it would be pretty damning.
That's not what's happening. It's sealed to the public, not the lawyers.
The article even mentions this:
> The passage appears to be from Exhibit K, a sealed document that the gamers’ lawyers and Microsoft’s attorneys have been arguing over.
> In legal documents, Microsoft characterized the email as an “internal exchange” that should remain sealed; a Microsoft rep declined to comment further.
I'll see what the judge says, or if they decide to unseal this one.
This is good enough reason to block the merger IMHO. I'm glad to see regulators taking a more active role.
Obviously their goal is to compete with Playstation...
If you think this merger will "eliminate" or lock-out Playstation for these major titles, you're seriously fooling yourself.
If you think this is impossible, you're seriously fooling yourself. Most people look at two things when buying a video game console: which games does it provide, and what consoles do my friends have? If most of the popular and recurring franchises are only available for one platform (and will stay as such in the future), why could PlayStation fundamentally not go under?
Funny how noone asked that over last decade when Sony paid mountains of gold to various developers for exclusivity.
Microsoft has decided turnabout is fair play, and people are acting like it's a Console War-crime. Why? Nintendo has spurned AAA devs since the Wii era and they're doing just fine. I take no side in the console war, but Sony can't be a fair-weather friend to platform exclusivity.
Now compare this to what Microsoft is doing. They mostly failed to create good first party games on their own (apart from a few gems), and are now resorting to buying up not just individual game studios but whole publishers in order to make their games exclusives to their own platforms.
What Sony is doing is creating real value to players. What Microsoft is doing is primarily meant to create value for shareholders. As a gamer, I strongly prefer the former.
Gamepass is literally the best deal for someone playing video games, full stop. The price may get jacked up in the future but right now it is stupid good.
Also you’re really not being honest about the historical aspect of Sony and first party games. You said as much but I don’t see why you’re giving Sony a pass for snapping up a stable of developers for first party games over time but knocking Microsoft for being late to the party and close the gap. It’s the same thing for the same result.
Whichever you prefer is fine. Most of Sony’s first party stuff is very different to the Microsoft stuff.
Sony has engaged in anticompetitive practices a lot in recent history. They tried really hard to prevent cross platform play, going so far as to both lie about it and also throw a “think of the children” in there. They also are the platform that wants money to support cross platform play.
1: https://www.theverge.com/2022/12/5/23494886/microsoft-sony-1...
2: https://arstechnica.com/gaming/2023/02/microsoft-signs-10-ye...
Well, I guess that would make Microsoft quite the monopoly then, right? Oh darn, everyone seems to have forgotten about Nintendo who sells more consoles than Sony and Microsoft. Oops, everyone also forgot about Steam with hundreds of millions of users who is also releasing consoles. Last, but certainly not least, Amazon just entered the streaming game space and, based the CMA’s recent definition (https://www.vgchartz.com/article/457194/eu-official-cma-over...), that’s 200m new streaming game subscribers.
At the end of the day this acquisition will suck for Sony gamers just like it sucked when Sony acquired developers and made their games Sony exclusives. This won’t make Microsoft a monopoly in any quantifiable metric, so I see no way the acquisition gets stopped by any logical judge.
If you disagree and think this can make Microsoft a monopoly then show me the numbers because I see 0 paths forward for Microsoft to do that without acquiring or eliminating Sony, Nintendo, Steam and Amazon. I know Microsoft has deep pockets but they are not that deep.
Without Microsoft making drastic moves like this, the XBox won’t survive much longer. Nintendo has effectively become a different market segment, and I just don’t see any other company ever bringing a serious competitor to market any time soon if Microsoft is forced to exit.
You could replace my comment with any of the more popular PS exclusives like TLOU, Nathan Drake or Tsushima and I think it would still hold up.
IMO there’s a huge difference between negotiating exclusivity for a handful of popular games you publish, and spending 2/3 of your competitor’s entire market cap to acquire the giant studios making a significant amount of the most successful game franchises on the market.
I can only see it benefiting the market since certain games might not have gotten made otherwise - e.g. Demon Souls; which spawn quite a number of spin offs, together they practically form their own genre.
Sony funds developers = PlayStation gets “extra” games that otherwise wouldn’t exist. No one else is affected.
Microsoft buys Activision = long running Activision franchises (eventually) become MS exclusive. Xbox gain nothing but everyone else lose out on franchises they used to enjoy.
One brings into existence games that probably wouldn’t have been made otherwise - and the investor takes the risk of the game bombing.
The other is primarily to deny the competition access to long running popular franchises - and is practically risk free since those franchises are almost guaranteed to print money.
However, purchase of Activision may still be part of a larger anti-competitive scheme Microsoft has cooked up. I believe they've been buying lots of other game studios and publishers as well.
MS isn't acquiring Activision alone, they are acquiring Activision-Blizzard.
Which includes Activision Publishing, Blizzard Entertainment, King (Candy Crush), Major League Gaming, Activision Blizzard Studios, Infinity Ward and Treyarch among others.
Sony are at least a decade ahead of MS in terms of having built a pipeline of developers that have the IP and quality standards that are console sellers even at the $500 price point.
I toyed with the idea of buying a series s because forza horizon is fun but it wasn't enough to justify even a $250 console.
Somehow this is different though, because Microsoft.
Sony went all in on exclusivity agreements and were dragged kicking and screaming into allowing cross play with other platforms. They are not the good guys here.
Obviously Activision-Blizzard games are not PlayStation system sellers currently but that's because they're not exclusive.
Due to this, I've not felt a need to own an Xbox in a long time. A combo of a PS4/PS5 and custom PC has yielded the best coverage.
In the end, it's the brands themselves that hold customers. They carry from release to release, good and bad. That's a harder ground to make up for than gameplay or style.
Sure, no way the thing they did with Bethesda will happen again right?
Xbox has never outsold the same-gen Playstation.
https://en.wikipedia.org/wiki/List_of_best-selling_game_cons...
I don't know the reason - but PSN has a reputation (seemingly earned) of having a better community. More numerous and less toxic gamers than Xbox Live.
(Heck, even in games, wasn't Halo originally a Mac title?)
Suppose there is a communication where a company leader says the motivation for an acquisition is to eliminate a competitor. In that case, the acquisition may be illegal under the right circumstances.
The article author has clarified (and updated the article near the end) that he was informed the email is from 2019 and doesn’t pertain to the Activision acquisition. https://twitter.com/stephentotilo/status/1671304215006773257
And legal commentators have shared precedent that competitive expressions by management are not necessarily “anticompetitive” per the law. https://twitter.com/hoeglaw/status/1671267277700755460
Also, this filing is from the private case against the deal (not the FTC case) which was already denied a preliminary injunction given this email.
Free Excel/Word/PPT(sorry libre office for forgetting about you), Android/Chrome is still FOSS and I use their degoogled versions, they contributed hugely to AI.
But yeah, the FAAMG is not something to be worshiped. Heck, its a red flag if you are a genuine fan of one of these companies.
I do wish Teams. would put a little more effort on their Linux client though. I know it's just an electron wrapper, but still. A little testing and supporting the non-enterprise users would be nice.
While I appreciate parts of what MS has done, it's a massive corporation with different divisions doing things that are much more open and others much more closed off. I'm sure there's lots of in-fighting between the differing approaches.
I might agree if we look at each one of them individually.
The issue with Microsoft is that their product offer has a breath that most competitors cannot even start to fathom. Specifically, Sony Entertainment may be a competitor in the console gaming space, but Microsoft gaming divisions go further, and are tightly integrated with others, e.g. DirectX, Windows, XBox, Azure.
I guarantee once they got enough devs locked in their cloud to write softwares, the spanking will start.
And once again, the victims will act all surprised.
Maybe its time to fork VSCode seriously if people want to use it forever.
> This is not a fork. This is a repository of scripts to automatically build Microsoft's vscode repository into freely-licensed binaries with a community-driven default configurationTheia[1] is a bit closer to a hard fork. They even try very hard to avoid saying outright they're just a rebranded VS Code, using euphemism such as "Theia embraces many of the design decisions [of VS Code] and even directly supports VS Code extensions."
Much like the government, I really feel that corporations should be limited in scope and conglomerates are problematic.
edit: I've had a disdain for Sony since the CD computer malware a couple decades ago. Between that and Bluray winning the content war, when HD-DVD had won on pricing.
Regardless, it's sad they're pursuing this race to the bottom rather than trying to improve their own products to a competitive standard.
[0] https://www.gamespot.com/articles/there-is-no-world-where-st...
They will do anything to lobby and bribe the regulators such as the ones in the EU to support their anti-competitive and horizontal integration of buying already established multi-billion dollar franchises.
There is always an extinguish part with Microsoft and they are getting very clever at redefining the method, as the strategy has always been the same. The only time people realize this is when it is too late, despite all the warnings and red flags.
The "knifed you in the neck, surprise!" pattern played out for one of my employers / a start-up whom MS paid an endearing visit to from high-level execs, before drowning us.
You don't seem to have a list of specific complaints against Microsoft, and in that regard I actually trust regulators more than random defamatory remarks on the internet.
It was rejected by the UK, under a government with a history of privatising critical natural monopolies (railways, energy, water, Royal Mail), no less.
(Meanwhile, the likes of Blackrock and Vanguard are seemingly allowed to pretty much own everything, and manage to remain fairly invisible to average consumers/voters...)
Videogames are a huge consumer market. Monopolistic behavior will harm consumers.
The fact that other companies in others areas "are allowed to pretty much own everything" is a non-comment. Hypothetical regulatory actions against "the likes of Blackrock and Vanguard" do not preclude regulatory action against Microsoft/Activision.
Why is buying 1 studio monopolistic?
I have been gaming for decades and I've never felt the need to play games from every studio.
Heck, large studios are mostly a negative in the modern era. They have the resources to use microtransactions and DRM. Meanwhile indie games have to try their best to get any attention.
Even if M$ bought every studio in existence, PlayStation and Nintendo, there would still be indie games in a few years. Not to mention uncountable number of games from the last few decades that is enough entertainment to last you a few lifetimes.
Seriously, IP is not something to worship. There is infinity entertainment. The only thing negative are the people who can't shake loyalty to IP.
But we may already be seeing what you describe with mobile/web/app games and the surge of steam indie games.
Making video games is easier than drilling for oil, and yet there was never an oil monopoly.
Activision is not "1 studio". It is a major publisher of very large videogame IPs.
If the idea is to round up major publishers, "1 studio" at a time, to starve the competition of their suppliers... In what world would that not be monopolistic?
There is no barrier to entry to video games.
Heck, I made a video game.
One of them was addicted and we were supposed to go somewhere and I had to kick them off. Lucky for me, he fat thumbed some way to break the game and his level 283 character was lost to history.
Basically made a crappy text based rpg when I was 16 years old in the first week I learned programming.
Most people will buy indie games for the console they own and they choose the console based on what their social circle have and what big games are available.
In turn Activision have seemed to be dreadful archivists and gatekeepers of the massive amount of industry history that they own. There are Infocom and Sierra and Davidson and Knowledge Associates classics that are still locked in their vaults that can't be legally purchased today. (GOG has done a lot to change that, but there's always still more in the Activision vaults.) Among other things, they've "lost" entire 1990s/2000s franchises that all signs point to them having the legal rights but they have no clue what happened to them ("No One Lives Forever" is a favorite example of some, and the easiest example to mind, but isn't the only example).
There's an importance to them signaling their own interest in exiting here because of that history of exits that Activision already oversaw. Whoever buys Activision next may have an easy bar to clear on being better than Activision was at owning such a large part of the past of videogames. But we don't want to underestimate how much of a gatekeeper versus archivist dynamic is in play of whoever buys Activision or whichever way Activision exits. (If Activision were instead to exit via vultures in one way or another, who knows what will happen to the past of videogames if the raw pieces are all put up for the highest bidder and scattered to the winds. That may be a good thing, or it could mean that even the piecemeal access on GOG to Activision's back catalog is at risk. We wouldn't know until the dust clears and by then it may be too late.)
Apple have wiped vast numbers of early iPhone games from existence by having their walled garden and limited backward compatibility. Most early iPhone games, from the 32-bit pre-F2P era will never be played again. But nobody really cares about those.
Much bigger games have been lost too. Many MMOs, in particular, as nobody ever had access to the server-side code. And most modern console games have online components and risk becoming unplayable when the servers are turned off.
Classics from Infocom and Sierra can at least be preserved by enthusiasts, as physical copies still exist and individual fans can ignore the copyright question.
The digital preservation issue extends beyond games, too. We may be entering a future were even books, in their digital form, are frequently updated to fit present-day cultural sensitivities. And without physical copies, it may become impossible to reference the original text, or even know whether edits have occurred.
It's definitely both. I don't disagree with anything you've added.
I'd also add that if we are wishing for copyright law reform ponies, I believe copyright terms are far too long and maybe IP like Infocom's should be public domain already under a far shorter copyright term. (The original US copyright full term was 14 years. That term length would make a lot of interesting videogames public domain today for culture to enhance/expand upon/remix/rebuild/reuse.)
That said, under current copyright law and current copyright terms, the publisher has an extremely heavy influence on what remains in print, so being concerned about corporate mergers is a necessary plight under the current copyright regime. We can wish for better copyright laws and still decry the publishers gatekeeping IP under the existing copyright regime.
In fact, given they now employ people from all the other entertainment industries, and make recurring payments, product placements, and build communities, I'd say they are pretty huge.
If we consider that media/marketing driven entertainment is a negative externality, having bad games would cause people to do entertainment that is more akin to their personal interests.
More outdoor time, more reading time, less playing the latest IP from a studio that spent millions on commercials to make an addicting game.
I guess that's the difference here. Most people do not consider this a negative, it gives them more options. You're fooling yourself if you think people would prefer to ditch AAA games and just have obscure indie titles.
That's a $350 billion/year industry. It is a huge part of our society whether you think it is or not.
Regardless, such a large acquisition or merger should always be under scrutiny like this. The government should be protecting its citizens from monopolistic and anti-consumer behavior wherever it may pop up. This acquisition clearly has potential for such behavior.
There should be a law that required platform compatibility. Games released on playstation and xbox should also be available on the Windows and Linux PCs – it's not because Microsoft can't do it, it is because they want to keep users locked-in.
As an old gamer I'd hate to see Blizzard on Microsoft's hands, but as a Microsoft shareholder I would not mind it. Surely there must be a middleground. Microsoft could buy half the shares.
I just fear what will happen with the ecosystem of games playable on battle.net, support for old games. Etc. If you look at EA Games, then many of the titles released through them is full of bugs that causes crashes, and games might not even be playable on modern systems. Not so with Blizzard titles.
That seems like it would ruin indy devs.
I'd much prefer a law that prohibits or severely limits the terms of exclusivity agreements.
Creating quality games requires a large amount of cash reserves to pay for a creative team, including programmers; independents usually do not have that luxury.
If Microsoft got to buy Blizzard it might actually cement Blizzard's future, securing the old titles and ensuring future ones. But, it might also get shut down because of lack of focus. I'd much rather have Blizzard remain independent to some degree, because then they may remain undisturbed.
Having said that, however, the arguments presented by regulators are pretty much ridiculous. They seem to only care about competition, and not about what is best for the future of Blizzard and gaming. Too much competition can ultimately degrade and obstruct the end users – I'd also hate to see that.
Why on earth would you want to crush indie developers in favor of large ones?
Some great examples include Super Meat Boy, Minecraft, Terraria, Audiosurf, Risk of Rain, Hotline Miami, Don't Starve, Noita
Sure and the majority of indie developers lose money on their games. However sometimes indie studios produce amazing games and we don't want to prevent that from happening or we'd miss out on games that are some of my all time favorites like FTL and Minecraft (not to mention dozens of others.)
> Creating quality games requires a large amount of cash reserves to pay for a creative team, including programmers; independents usually do not have that luxury.
Only for certain types of games. Indie games don't have the funding to produce massive amounts of assets, but they have the freedom to take risks that larger studios can't. Without that innovation, we'd see even more stagnation in the AAA game market.
> Competition can be a bad thing in this field, because it decreases the quality of the games