On May 02 2022 01:10 honorablemacroterran wrote: Microsoft would be dumb to buy ATVI at that price right now tbh. All mergers and acquisitions at the previous highs of the stock market look dumb.
Even if the deal would get regulatory approval from the people who think this is somehow worsening the competitive landscape, they might want to revalue the deal and then that will open up new opportunities for people to disagree with it again. They said it could take over a year to close. Microsoft is only on the hook for a few billion if they cancel the bid versus the big decline in market values of most tech companies we have seen in past weeks and months.
If Microsoft really pays the original price I would be surprised since it seems against their shareholders' interests at this point.
Keep in mind if it weren't for the MSFT bid for ATVI, its stock would probably be trading much much lower than even the discount to the bid price it is currently at. Nothing has gotten better for ATVI, in fact, their own results have gotten much worse as the market in general is tending towards lower valuations for tech companies.
ATVI just revealed that they lost a third of their monthly active users YoY. https://investor.activision.com/static-files/91e3b7bc-5d74-4be4-903c-7f25c9c1b3a1 Their EPS cratered by 75% from last quarter (less than half of the consensus estimate), and the P/E ratio of the NASDAQ has also gone down from about 30x at the time of the announcement of the bid vs 22x now. If you take that all into consideration on top of the revised lower estimates for ATVI's future earnings, that original MSFT bid looks overpriced by a large enough margin MSFT would be better off losing $3bn up front than actually closing the deal.
Given the regulatory and PR backdrop on ATVI, I'd bet that its parts are worth more than the whole at this point. They should just slice it up and sell it off. Although, given Micosoft's immense size and cash hoards, it might not even matter to them if they think Candy Crush is enough of a strategic imperative. They are doing this to compete with Meta on mobile, after all.
To be fair the market has been absolute shit since printers are off. Obviously I aint defending the ATVI numbers at all but you will always have to offer the premium. I am not sure it actually looks overpriced and for as much as people not buying it. The big players that would actually profit big time when they buy surely don't take that buy on the risk the deal doesn't go through and they can use the money to work somewhere else.
There are 2 conditions you need to be "sure of".
a) you think the deal goes through b) you cant make more money with your investment in the meantime
If you say yes to both, IMO you should buy it. If you have slightest doubts, I'd probably stay out.
If you look at the Microsoft bid as a form of a call option, it seems likely to have moved out of the money, that's all I was saying. There may still be strategic reasons Microsoft wants to acquire even if the revenues and users are declining and they end up overpaying quite a bit. On the other hand, this is their potential largest acquisition to date.
CMA referred their investigation of the merger to phase 2 citing potential concerns in foreclosure (exclusivity of CoD games namely) and portfolio effects across cloud gaming.
I'm still reading through the decision, but I'm so far (positively) surprised by the authority's willingness to engage with a more complicated tech merger. We'll have to wait and see what comes out of it in the end, announcement of Google pulling the plug on Stadia definitely doesn't make this one easier for the merging parties.
EDIT: I did a more thorough reading now, for those curious the relevant stuff is here. Issues statement summarises the key points, full text decision can be found a bit further down the page.
Substantive amount of consideration is given to CoD franchise and how impactful it is. The entire ToH1 is about preventing Sony from accessing CoD in the future. ToH2 is about foreclosure to cloud gaming service providers, it still makes a lot of reference to CoD franchise, but there CMA considers the wider portfolio of console and PC games, too. ToH3 looks the most speculative, as the entire cloud gaming service industry is still pretty young and developing. There the argument seems to hinge more on Microsoft's existing strength across the eco-system, rather than the precise impact of the merger.
Below are a few lines of commentary and speculation:
-After reading that, it seems that CMA would require commitments related to CoD franchise in order to clear this. Very hard to imagine them turning around and going, "no foreclosure issues" in phase 2. Divestment seems unlikely, maybe some behavioural commitments even though those have been criticised over last years.
-Requiring commitments to protect Sony as a competitor seems tone deaf from a pure consumer point of view, as Sony has from a personal point of view been probably the worst offender in using vertical integration to push console sales (Nintendo is probably as bad if not worse, but it doesn't feel the same as I've gotten so used to them doing exclusive titles). However, for competition it makes sense.
-Starcraft mentioned 0 times. On the other hand it was funny to see an authority decision codifying words such as "gamer" and "console wars".
-If CMA blocks, I'd expect this to be contested in courts. If it goes there, it will form an interesting precedent either way.
-Practically nothing on mobile gaming outside of the portfolio effects in ToH3. I'd very interested to a more detailed assessment of the mobile gaming markets, but that seems unlikely here. Maybe EC or US investigation will have that.
-I was wrong about authorities' willingness to investigate, but pretty spot on about the issues already when this got announced + Show Spoiler +
On January 19 2022 06:48 Oukka wrote: RE: the competition concerns, there is zero chance that this deal will be even investigated in-depth. Pulling some figures from random articles says gaming industry is around 150 billion USD, actiblizz revenue is around 8 billion or so (one here + Show Spoiler +
). That's roughly 5% share of the market which is very fragmented and CAs defining the markets at anything more restrictive than maybe PC/Mobile/Console is very very unlikely. Arguing some horizontal dominance would be struck down in courts very easily.
The interesting stuff would be the vertical aspect, but I doubt some competition authority pursuing foreclosure type of arguments would do any better. I find the distributor - developer/publisher integration problematic definitely, but again there is zero chance this type of deal is big enough to lead into some intervention when much bigger acquisitions by FB/Google/Apple/Amazon have gone through even in recent years.
"A California judge is allowing Microsoft to close its acquisition of Activision Blizzard after five days of grueling testimony. Microsoft still faces an ongoing antitrust case by the Federal Trade Commission, but Judge Jacqueline Scott Corley has listened to arguments from both the FTC and Microsoft and decided to deny the regulator’s request for a preliminary injunction."
Since microsoft probably couldn't do much with the starcraft IP on console, they'd probably be ok giving creative rights to another dev studio... frost giant perhaps?
On July 12 2023 05:18 DekkuM wrote: Since microsoft probably couldn't do much with the starcraft IP on console, they'd probably be ok giving creative rights to another dev studio... frost giant perhaps?
Microsoft didn't become Microsoft by giving things. The Starcraft IP is definitely too expensive for FG even if Microsoft wanted to sell it.
On July 12 2023 05:05 [Phantom] wrote: Honestly I don’t know why so many people are opposed to this.
Although id say Microsoft doesn’t have a stellar record managing studios but I think they can’t fuck yo more than activision thenselves are doing
nah, ATVI is quite good and have been doing a great job for decades. The Destiny2 story was so much easier to follow and so much more fun while Bungie was under ATVI. Now, D2 is a meandering very very expensive mess.
the person in this video is very knowledgeable in this area. However, he had a stroke 7 months ago and is still not 100%. In this area ... 5% of this guy is better than 200% of me.
On July 12 2023 09:15 CicadaSC wrote: So when can Microsoft start making actual changes, now? If they wanted to they could start working on SC3?
Blizzard exited the RTS genre more than 2 years ago and Frost Giant is too small in a low revenue ceiling genre for ATVI to bother publishing their stuff. There is a better chance of a new Halo Wars game happening.
It's really hard for me to feel anything or care about this. Blizzard isn't the same as it was. The old games are just so much better than their new titles.
On July 13 2023 03:35 WombaT wrote: This is largely immaterial provided other blockers remain in other big markets.
The U.K. being just one that still hasn’t approved the takeover. The merger still isn’t going to happen if multiple big markets have an issue with it
What other big markets? As far as I know it's only the UK that's blocking the merger.
Hm maybe I’m out of the loop, or possibly getting mixed up with Meta not yet launching threads in the EU due to anti-trust proceedings there, I thought there was some European level issues too?
On July 13 2023 03:35 WombaT wrote: This is largely immaterial provided other blockers remain in other big markets.
The U.K. being just one that still hasn’t approved the takeover. The merger still isn’t going to happen if multiple big markets have an issue with it
What other big markets? As far as I know it's only the UK that's blocking the merger.
Hm maybe I’m out of the loop, or possibly getting mixed up with Meta not yet launching threads in the EU due to anti-trust proceedings there, I thought there was some European level issues too?
EU cleared the acquisition in May. It's just CMA now, and even them have halted the legal process and went back to the table with Microsoft.
On July 13 2023 03:35 WombaT wrote: This is largely immaterial provided other blockers remain in other big markets.
The U.K. being just one that still hasn’t approved the takeover. The merger still isn’t going to happen if multiple big markets have an issue with it
What other big markets? As far as I know it's only the UK that's blocking the merger.
The Great White North has not approved the merger yet. It is the 2nd biggest country in the world. Roflmao.
The 9th circuit court is the slowest moving court in the USA. They take years to do anything. So it's over. The merger is going through.
A good example of how slow the 9th circuit court is happened with ATVI indirectly involved. California's DFEH over stepped their bounds trying to punish alleged misbehaviour by the Blizzard people. That is something like 2 years ago with ZERO info on if the government will ever get cleared of their misconduct... OR if the government's lawyers are guilty of misconduct.
In closing, It is a good day for gamers and a bad day for Sony.
"Microsoft is planning to finalize its $68.7 billion proposed acquisition of Activision Blizzard next week. A source familiar with Microsoft’s plans tells The Verge that the company is eyeing up Friday October 13th as the closing date where it announces to the world that the 20-month process to buy Call of Duty maker Activision Blizzard is over."
Ybarra said that on the heels of the acquisition he still intends to have big teams working on the largest franchises. But he is also open to less mainstream projects, including a possible return for StarCraft. Under Kotick, many Blizzard staff members with experience developing real-time strategy games left the company. So if the franchise does return, Ybarra hinted that the next iteration could be in a different genre altogether.
“It’s not me saying, ‘Go make a StarCraft game,’” Ybarra said. “I need to have someone who has the vision and passion that comes with the idea, and I’ll bet on that team.”
At Microsoft, the focus on a broad subscription offering can greatly influence what kinds of projects are valued. Developers can help bolster Game Pass with titles that strongly appeal to a particular demographic even if they don’t sell millions of copies to the masses — yet another potentially major change for everyone at Blizzard.
it is encouraging that the RTS team left under the most civilized circumstances. i have not heard a bad word about ATVI from any member of the Morhaime studio or the Frost Giant people. What is stopping Microsoft from paying Frost Giant to make another SC game after they've completed Watergate or whatever its called?
EPT![[image loading]](https://graphics.reuters.com/BRV-BRV/byvrjbemxve/chart.png)
