Activision's not having a good day.

The UK courts just ruled against them in the Microsoft-Activision
merger, and reports show a significant drop in players in their Call
of Duty franchise.

The former was expected, of course; the signs were strong that the
merger was going to be blocked, so that probably dampened the shock
somewhat. Anyway, the battle isn't over yet; an appeal is already in
process.

The Call of Duty news, however, is more indicative of problems at the
company. "Call of Duty" has long been one of the company's tent-poles,
to the point where it's stolen focus - and resources - from other,
newer IPs. The company has done little to push forward other
properties that might match its success, and if "Call of Duty"
suddenly does a MySpace - with all its regulars quickly leaving for
more popular competitors - the company could be in serious trouble. Of
course, the biggest reason for this is probably the aforementioned
merger - generally, companies don't like to make risky moves leading
up to an acquisition - so further delay in settling the matter won't
help the company.

It may be time for Activision to abandon the idea of the merger, and
focus on righting their ship. Even with upcoming releases like "Diablo
IV" they still are falling behind their competitors, both with respect
to original IPs and to number of products.

Then again, the merger is largely there so Microsoft can get a leg-up
on the mobile gaming space (Activision has a huge presence in mobile;
Microsoft not so much) so maybe the C-levels are willing to sacrifice
the console/PC gaming arm of the company if that's what it takes to
complete the sale. We'll see.

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On 27/04/2023 00:31, Spalls Hurgenson wrote:

Activision's not having a good day.

The UK courts just ruled against them in the Microsoft-Activision
merger, and reports show a significant drop in players in their Call
of Duty franchise.

Looking at it the regulator (Competition and Markets Authority - CMA)
seems to have a sticking point over the problem of competitiveness in
the game streaming market* which even though Activision have gone some
way to address they haven't gone far enough for the CMA's liking. Where
it goes from here I'm not sure. I presume there is some process to
appeal to the CMA and I also presume Actibision will try to take it to
an actually court of law (the CMA isn't a court) if they can convince a
judge there's a legal basis to do so.

The other option (politics) seems to have already started with a big
cheese from MS saying that the UK isn't open for business and is being anti-competitive unlike the EU. I found the CMA's response rather
amusing as they basically said we are here to protect the interests of customers and not the financial interest of private companies. Saying
that, with are current government I can see a minister getting on the
phone to the CMA to repeat the mantra that by definition any regulation
of private companies is bad and ideas such as the rule of law are so old fashioned.

In other news, big company claims its action are nothing to do with self-interest but instead purely for customers.

*"The Merger would, therefore, bring together the company in a uniquely
strong position to offer cloud gaming services with one of the
industry’s strongest gaming catalogues. The CMA is concerned that, by leveraging ABK’s content and Microsoft’s wider ecosystem, Microsoft will have an unparalleled advantage over current and potential cloud gaming
service providers. This could result in increased concentration in cloud
gaming services or the market ‘tipping’ to Microsoft, and ultimately
deny consumers the benefits of competition between new and emerging
providers vying to succeed in cloud gaming. The CMA recognises that, if Microsoft were to significantly increase its market power in cloud
gaming services, this could have knock-on effects on independent game developers and publishers who compete against Microsoft’s own gaming portfolio, and who could be disadvantaged in a number of ways, such as
by having to pay higher fees or by being demoted on Microsoft’s gaming ecosystem."

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There's also this press release from the CMA explaining the decision.

https://www.gov.uk/government/news/microsoft-activision-deal-prevented-to-protect-innovation-and-choice-in-cloud-gaming

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