12
votes
Antitrust case - Will the US Microsoft Activision merger go through?
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- Title
- Will the Biggest Tech Merger of All Time Go Through?
- Authors
- Matt Stoller
- Word count
- 2848 words
I don't understand where all the enthusiasm for this merger is coming from. MS doesn't have the best track record for their mega studio purchases. Rare only recently seems to have found its footing with Sea of Thieves, Bungie went independent and eventually got purchased by Sony. In mainstream games I haven't seen them put their best foot forward aside from Forza and Flight Sim. Other than that, Obsidian has been doing most of the heavy lifting with Grounded and Pentiment.
I'm reminded of two quotes from a Dunkey video:
"Recently Xbox acquired Double Fine, Playground Games, Obsidian and Ninja Theory. But just because you're buying promising studios doesn't guarantee you incredible games." [...] "Either these guys just have the shittiest luck ever or they aren't willing to dig deep and spend the money to get stuff made right."
Disappointed that the comments here so far doesn't seem to be discussing the article. It is interesting to see that one CEO seems to almost sabotaging the deal (Kotick) while the other seems to be struggling to counter FTC's arguments. Kotick wins whether or not the deal goes through since he gets 3 billion dollars if it doesn't go through, so not super surprising.
My money is still that this will not be blocked by the US given how lax anti-trust enforcement has been (and the judge has a clear conflict of interest with her son working at Microsoft), but good to see that it's not a total given and there is some friction from the FTC. Given how UK blocking the deal was a surprise, it would be neat to see the same on the US side.
Even if the US doesn't block it, they can't merge unless everyone approves it, unless they wanted to pull out of those markets. Which seems unlikely.
I am kind of surprised how much of the various cases against the merger have been focused on cloud gaming, though. Cloud gaming for all the investments from big companies is still not very popular and not a great user experience in most cases, and that doesn't seem likely to change. It doesn't seem like the market that the FTC and its foreign equivalents should be most concerned about in this.
Personally I'm a exclusively PlayStation gamer and I could care less about call of duty, never played it never will. However, it is pretty universal that when giant mergers happen consumer lose. Maybe not in the short-term while the acquisition is in progress and attention is centered but in the long run more restrictions higher cost are the name of the game.
The video game industry in particular has a ton of historical examples of studios being purchased, which results in them creating lower quality games, which results in the studio being shuttered and it's workers either quitting or being absorbed into the parent company. There are tons of examples that can be found just by looking at EA's history. In more recent years there are examples of these companies making good quality and even financially successful games but the parent company thinks it isn't successful enough so they suffer the same fate.
Personally speaking I wish the games industry was full of more studios making more risky and niche games instead of massive amounts of people burning out in giant offices making their next paint-by-numbers sequel or these god-awful skinner box monetized "live service" games. And if a studio is failing and can be "saved" by an acquisition, I'd rather see them close their doors than to have their corpse reanimated to squeeze as much money out of their fans' pockets as possible.
Yeah, but at least in this case Perfect World isn't pretending that they're Runic; people are going to at least be slightly more aware that the game might not meet their expectations.
Of course it's going to go through. We have a SEC that's been captured by the very companies it's supposed to regulate.
This is regulated by the FTC, not the SEC. The FTC is currently suing to prevent the merger, and the chair of the FTC is a very strong antitrust advocate. I recommend today's episode of The Daily, which discusses this case.