Microsoft buys Activision-Blizzard

awec

https://www.boards.ie/discussion/comment/118499258#Comment_118499258

GamePass is profitable. Again, I think you underestimate how lucrative subscription models are.

Every single publisher would love to have every single customer on subscription. It is the dream. There is a lot more money to be made this way.

Mitch Connor

https://www.boards.ie/discussion/comment/118499341#Comment_118499341

but under what terms is GamePass profitable, and how does that impact the rest of Xbox.

Simple example (and not saying this is true)

GamePass brings in $100. The costs directly associated with GamePass are $80. GamePass is profitable. Check.

Studio makes a game for $60. Studio makes $20 from game sales. Studio makes $30 from GamePass payments.

Studio has lost $10.

GamePass is profitable but the structure on which GP is built (the games) is not. Again, I'm not saying that is 100% the case, but it what I would love to know. We also don't know what costs are beign attributed to GamePass when it is called profitable. Certainly not the aquisitions (and they shouldn't be) but are all the costs associated with bring a game to game pass? Even when talking about the contracts with 3rd parties - attributed to GamePass or do MS as the parent take that cost elsewhere.

I'd be really interested to (and will never) know the full details.

ricimaki

Microsoft announced that they now have 25 Million GamePass subscribers along side this. Assuming everyone is paying €10 a month, that's €250M per month in revenue, or €3 billion a year. The realistic figure will be larger...

quokula

https://www.boards.ie/discussion/comment/118499334#Comment_118499334

It's not the corporations but the actions.

Helping to create games and then keeping them on your platform is good (sure, spreading them to other platforms is better, but that's not something that's realistically happening from any platform holder)

Not helping to create games but then just taking existing multiplatform ones and spending money to limit access is bad.

Microsoft have chosen the second strategy. Sony have chosen the first. Both are corporations that exist for profit. Exxon Mobil and Lego are also corporations that exist for profit but I can prefer the actions of one over the actions of the other.

awec

https://www.boards.ie/discussion/comment/118499393#Comment_118499393

Why do you think studios make less money from subscriptions?

Do you think the desire to move to subscriptions is because they all want to make less money?

https://www.boards.ie/discussion/comment/118499425#Comment_118499425

Sony couldn't follow Microsoft's strategy if they tried.

But I'm saying that if they could, they would. Sony aren't a chivalrous knight fighting an evil demon. It's a corporation. No matter how much hand waving you employ, they are a corporation.

johnny_ultimate

Dividing the $70bn deal we're talking about here by $3-5bn in subscription revenue shows the sheer staggering scale of this deal. I mean, even if Microsoft was earning double that annually - very, very possible down the line - it'd take 10+ years to pay off this deal without even taking into account any other expenses. Truly unfathomable amounts of corporate money at play, and far beyond the scope of any forum maths.

It's also a shame that there's so much secrecy around video game sales, finances etc... Makes it very hard to properly analyse the state of play. Microsoft hasn't even confirmed the amount of Xboxes sold for quite some time now, let alone revealed details of full Game Pass financials!

Penn

https://www.boards.ie/discussion/comment/118499393#Comment_118499393

I would also say that "Gamepass is profitable" can depend on a wide range of factors depending on which costs are included in that formula. Eg. If the operational costs of Gamepass and costs of deals with third parties to have their games on Gamepass are covered by the subscription, then it's profitable. If the costs of acquiring companies like Activision/Zenimax were to be included (which they likely aren't as they would be general Microsoft costs rather than Gamepass costs) largely in order to have those games as first party games day one on Gamepass, it's hard to see how Gamepass would be profitable.

Again, 25m subscribers equates to 4.5bn income per year. Regardless of what you include as operational costs or how much of that 4.5bn is profit, it cannot offset the costs of their ABK/Zenimax purchases (75bn+).

awec

https://www.boards.ie/discussion/comment/118499446#Comment_118499446

This is where the benefit of being the big fish comes in.

People talk about using brute force, paying to win etc. Microsoft could buy Sony, that's the difference in scale we are talking about here.

https://www.boards.ie/discussion/comment/118499450#Comment_118499450

Day to day cashflow and acquisitions should be discussed in separation. So long as Game Pass is in (or moving towards) positive cashflow, then it's grand.

Cashflow is short term, and is a reflection of the day to day health of the business.

Acquisitions are a long term thing.

Harika

Super happy to see Microsoft buy them, hope they kick out Bobby. As former employee it was really sad to see the company degradation.

Microsoft did well with Minecraft.

Mitch Connor

https://www.boards.ie/discussion/comment/118499416#Comment_118499416

I'd say the number would be lower - loads of people will have gamed it so far, but also the price per country varies, so loads of people will be paying less than 10.

https://www.xbox-now.com/en/game-pass-comparison?page=1

though I would imagine US, Europe and UK have a large proportion of that 25million and you are looking at about $10 per month for GamePass (not ultimate) in those regions.

Retr0gamer

https://www.boards.ie/discussion/comment/118499322#Comment_118499322

No I don't see any difference. The platform holders always work closely with their partners as they want the best games on their platforms. Sony did the same with plenty of other developers and didn't take them on and the same with MS with the likes of Tecmo etc. And Sony can also be dicks as well like with Speed Freaks were they worked very closely with the Irish developer and then threw them under the bus when CTR came along.

riclad

Thats the trend in america. Mega mergers big companys buy smaller companys for their ip franchises. Its likely new content for call of duty will be on xbox first. Betas of any game will be on xbox first. anyway 95 per cent of games are released on both consoles. I think dozens of people have been fired or left blizzard activision. Bobby kotick will probably retire with a large payout and hopefully theyll bring in rules to promote more diversity and equality in the workplace. Call of duty will be released on xbox and ps5 as it sells millions every year. Xbox lost the last console war. Microsoft is simply paying to tilt marketplace. This would be like sky tv buying ITV and channel 4 to be stronger in the advertising market.

Retr0gamer

https://twitter.com/SeamusBlackley/status/1483490596333445121?t=oYskBdeTaizljfHPSSPJAw&s=19

SuperBowserWorld

I hear Microsoft have also bought the game rights to some movie called ET The Extra Terristerial. They plan to sell 100 million cartridges. And if it doesn't work out Nintendo will save the industry with a new console and some guy called Mario.

johnny_ultimate

Honestly the only acquisitions I tend to be even somewhat comfortable about are the ones where a struggling company gets some sort of security. I'd count something like Microsoft taking over Double Fine or Sony taking over Housemarque as examples there - both small developers with mixed commercial fortunes, but who've made some of their best games with help from bigger companies. I'd still prefer if they were able to operate independently, but there are creative benefits to having the extra resources to make a Psychonauts 2 or a Returnal.

Still, none of the big players have a clean sheet when it comes to managing their smaller studios! Both Sony and Microsoft have absolutely destroyed some of the developers they've acquired over the years.

Retr0gamer

It's such a pity that MS had all that money to do some good and yet choose the darkest timeline of digging Activision out of a hole instead of taking the paragon route and buying Konami.

ricimaki

https://www.boards.ie/discussion/comment/118499507#Comment_118499507

True.

It does show that in a couple of years, they'll have more subscribers, all paying much closer to the actual price, and likely also on more expensive plans (ultimate).

https://www.boards.ie/discussion/comment/118499614#Comment_118499614

Save the industry... in the US. It was doing fine everywhere else.

https://www.boards.ie/discussion/comment/118499652#Comment_118499652

I agree actually. If I had €70bn to spend, I wouldn't have blown it all on Activision, though I can see why they did.

EoinMcLovin

https://twitter.com/markets/status/1483709133622808577?t=XAexu06wb6QSC4I8rBNYVQ&s=19

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recyclops

If I was Sony I would be worried about rumours like the below really catching on

“Sony will have a monumental challenge on its hands to stand on its own in this war of attrition,” said Amir Anvarzadeh of Asymmetric Advisors. “With Call of Duty now most likely to be added exclusively to the Game Pass roster, the headwinds for Sony are only going to get tougher.”

If we have seen anything in the last two years its how easily manipulated below are and if kids and uneducated ( in videogames) parents start believing this Sony will be in heaps of trouble come next September - December.

We all love Sony exclusives but they are nothing compared to this behemoth

https://www.boards.ie/discussion/comment/118499697#Comment_118499697

They only sold it because of the scandal apparently. "They" being the board. They'd past peak stock price and they would never get another opportunity for a big payout like this.

The stock is currently at $82. So even a day after the announcement you can still buy Activision stock and be guaranteed $13 per share profit.

That's how bad this scandal has hit them.

quokula

https://www.boards.ie/discussion/comment/118499438#Comment_118499438

Nobody is trying to claim Sony is some chivalrous knight. I'm pointing out the hypocrisy of the handwaving at Microsoft's anti-consumer actions and the disingenuous false equivalence between these acquisitions and ones like Naughty Dog or Insomniac.

You can hypothetically say "Sony would also do this extremely anti-consumer stuff if they could" but that doesn't change the fact that they actually haven't in reality, and it doesn't make what Microsoft is doing any more justified.

https://www.boards.ie/discussion/comment/118499795#Comment_118499795

What exactly is the argument against the acquisition? The Ftc or whoever the government body is who look into anti-trust, what exactly are the arguments for blocking this? Jesus that's some amount of money, can't be having that?

You can't even argue that they would be taking the catalog away from PlayStation because Xbox have been very clear they would love to bring GP to Playststion, so the only ones blocking the games on PS are Sony.

https://www.boards.ie/discussion/comment/118499795#Comment_118499795

But I'm not justifying the actions of a corporation. I'm not emotionally tied to any of them. I have all of the consoles.

PS: I think the transition to GaaS is pro consumer (because of my personal experience with it so far), even if the acquisitions are not. So I'm not sure if, on the whole, the entire thing is anti consumer.

Kotick getting $375 mill once deal is done

Retr0gamer

https://www.boards.ie/discussion/comment/118499795#Comment_118499795

This is the same Sony we are talking about that charges you to play online games, stored PSN account details and payment details as plain text, pushes proprietary storage every chance they get, installed a root kit on your PC if you played a sony music CD on your PC?

quokula

https://www.boards.ie/discussion/comment/118499813#Comment_118499813

Legal arguments are one thing, I don't think anyone here is talking about legal arguments. It's a pretty extreme anti-consumer move though to actively take a significant multiplatform player out of the market. And I'm not sure trying to blame Sony for not making their own platform redundant and turning it into a vessel for Microsoft subscriptions is a valid argument against the fact that MS are doing this to reduce competition.

Varik

https://www.boards.ie/discussion/comment/118499763#Comment_118499763

You can't buy the stock anymore as it was halted. You and I also couldn't have bought it anyway at that time as it was during pre market.

https://www.boards.ie/discussion/comment/118499861#Comment_118499861

That's his remaining personal shares only, he'd also be getting another~300m in cash due to the takeover and additional shares too.

Retr0gamer

Lets not fool ourselves. Unfortunately we live in a world where the likes of Bobby Kotick were always going to come out of this smelling of roses.

J. Marston

It's annoying that rubbish like COD is so influential.

quokula

https://www.boards.ie/discussion/comment/118499882#Comment_118499882

I don't see how any of that is relevant to this acquisition in any way? You tried to to say that what Microsoft are doing here is totally fine because it's no different to Sony buying Insomniac or Naughty Dog. I pointed out how that is completely untrue and backed my point up with a lot of facts about how Sony helped to build up those studios and funded and published their biggest games before bringing them on board as first party developers. So instead of acknowledging that or trying to dispute it you're now going off on a complete tangent to justify your hatred of Sony that has nothing to do with the original point. This isn't a thread for childish console wars.

McFly85

https://www.boards.ie/discussion/comment/118499882#Comment_118499882

what does any of that really have to do with what MS have just done? A company having crappy business practices shouldn’t legitimise a different companies crappy actions.

Varik

https://www.boards.ie/discussion/comment/118500036#Comment_118500036

I think there was 1 recently that'd be an exception but ye, Sony pretty much only ever bought companies they'd been working with for years usually exclusively.

Sonics2k

https://www.boards.ie/discussion/comment/118500005#Comment_118500005

Basically this, no matter how much gamers themselves despise the little shite, the markets and shareholders love him because he's brought in billions for the company over his years as CEO.

Kotick was always going to come out of this a wealthy man, even if ActiBlizz miraculously went bankrupt, he was going to walk away very happy.

Exclamation Marc

I've said this a few times but it seems lost on some people that both corporations can be in the wrong. The rhetoric of "Yeah well Sony did XYZ" is not the point. They've both been guilty of shítty practices that are anti-consumer but the fact that its becoming more aggressive is not good in the longer term. The name of the company making the acquisition is irrelevant, I'd say the same if it was Sony.

Sure its great in the short term to say hey, all these games are now on Gamepass which is super affordable and my €15 will get me more, and it is (notwithstanding that the majority of excellent games were created, developed and funded under a traditional gaming model). But the industry is moving towards consolidation which will have an impact in the longer term for games down the line. It's not good if we end up with two or three gigantic companies where the majority of games end up being controlled by the same directors, QA process, funding arrangements, marketing plan, management structure and editing cycle because some games will get lost in the cycle.

Ubisoft pumps out the same reskinned Far Crys and Assassin's Creeds because they're money makers and shareholders demand returns so its no wonder that Ubisoft play it safe year in and year out and the games remain relatively unchanged; shareholders don't give two flying fúcks how well the games are received once they sell (either copies of the game or microtransactions). So if that happens and overarching creative decisions are suddenly being made by a couple of CEOs and their shareholders rather than a slew of independent developers, there's a real risk that there will be a much narrower perspective and freedom afforded to games and developers and there's a huge risk that quality and diversity will suffer. Sure, there's a small chance it might not happen, but anyone who thinks there's absolutely no risk of that has their heads in the sand.

BlitzKrieg

https://www.boards.ie/discussion/comment/118499425#Comment_118499425

Sorry this really doesn't pan out because you are ignoring the most important aspect here

Time

Going back to only just 2010/2011 you could have a mid sized games developer be bought by a platform and both microsoft and sony did that.

But I'd say from 2013 onwards (around the time when THQ collapsed) almost all those mid sized developers started getting bought up by larger publishers.

Now its borderline impossible to buy up just a game studio, none of those developers are independent anymore. They are either already owned by one of the other big publishers (EA, Ubisoft, take2, Sega, Embracer group etc) or they're already own by one of platformer holders.

The developers that are still running by themselves are ironically Bungie or developers who are so big now that they are platforms in their own right (Valve, Epic).

Hell most small teams are also being picked up by publishers like Devolver digital and Annapurna interactive.

Right now it's either cut a deal with the publisher as middle man or buy them outright if as a platform holder you want any form of exclusivity.

Retr0gamer

https://www.boards.ie/discussion/comment/118500036#Comment_118500036

It's not console wars BS and I never said what MS are doing is good. It's the white knighting of Sony that is ridiculous as if they haven't bought out third parties before but instead nurtured them at their teat and then brought them lovingly into the Sony family. That nurturing is more than likely testing to see the suitability of the studio for acquisition by Sony, or else just Sony looking after their third parties, their development support is pretty great from speaking to developers.

Sony are a ruthless big corporation who do exactly what MS do except in this case MS have bigger pockets.

Grumpypants

I know 70billion seems like crazy money, but with 130billion in the bank and negative interest and run away inflation, companies are trying desperately to get rid of cash (this is why we have the massive boom in acquisitions). If your money is going to lose 7-10% a year for the next 5-10 years then it is better off invested in talent and IP that can go on earning for the next decade.

They also not only have a huge chunk of popular games for Gamepass (which will likely grow to 35 million users by the time this deal is actually done). But they also have a foot into esports with Overwatch and Starcraft. Maybe they are not at their height anymore but the foundation is there. And also COD mobile is huge never mind King and then you have the massive back catalogue of Activision IP.

Pull Raven off COD and get them going on Singularity 2!!

I don't think MS have any interest in walled gardens. They made a conscious effort to shift xbox from being a hardware company to being software one. They need to get on as many platforms as possible. They are already not locking in the Gen 5 consoles, games are on PC, cloud streaming puts them on mobile and tablets and TVs. They have tried to get it on Switch and very likely would just to get it on PS too.

Microsoft is thinking 5-10 years down the line when we are all sitting in the metaverse watching esports while being drip-fed mountain due through directly into the bloodstream.

They have Sierra IP too. 😁

Mr Crispy

https://www.boards.ie/discussion/comment/118500769#Comment_118500769

Pull Raven off COD and get them going on Singularity 2!!

Amen!

Retr0gamer

... I thought the reviews were bang on the money with singularity. It's a mediocre B-tier shooter that I was so meh about I dropped.

But still.... I miss those B-tier Raven shooters.

Sony are also limited by not publishing on PC. A major acquisition like this would make no sense if it meant having to pull out of the PC market.

I know they're now slowly moving into PC but it's very much an after thought, releasing games from last gen.

The Raging Bile Duct

I can imagine the pitch meeting for Singularity:

'What if we combined Bioshock with Portal except we made it for a budget of two fiddy.'

johnny_ultimate

I will officially dock two 'evil' points from Sony's substantial tally if they release remastered Bloodborne on PC.

SuperBowserWorld

https://www.boards.ie/discussion/comment/118499690#Comment_118499690

Joking about the collapse in the 80s when Atari and shovel ware killed the video game industry for a time.

It's changed now. Even shovel ware seems to have a huge market. 🙃

https://www.boards.ie/discussion/comment/118501631#Comment_118501631

Sure 8-bit micros in Europe had more than their fair share of shovel ware!

Most of it isn't even catalogued and is lost to time.

Anyway, we digress.

brady12

https://www.boards.ie/discussion/comment/118494353#Comment_118494353

there is a chance this could happen . I'd say if they get away with this one and try and acquire another major player that could be defo the time they get pulled back.