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Microsoft to Acquire Activision Blizzard

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Re: Microsoft to Acquire Activision Blizzard

#681

Post by kevingadd »

dleslie wrote: post #549
neogodless wrote: post #425

Earlier quoted context omitted.

> other companies are going to find it very hard to compete with Game Pass I haven't really ever used it. I used to buy everything Blizzard made (OK that's an exaggeration, but I was all about WarCraft/StarCraft/Diablo...). Before Steam, I bought lots of games on disk. Now I buy most things on Steam. And I haven't bought anything Blizzard since Diablo III. Why wouldn't Steam continue to be competitive against Game Pa…

You know that ever growing library of unplayed games that all steam users have? Game Pass is that, but instead of paying for games individually you pay a low fixed rate, and it includes many hot new releases that are still full price elsewhere.

Many of them on launch day too, instead of waiting 6-18 months for a sale

Re: Microsoft to Acquire Activision Blizzard

#682

Post by Rebelgecko »

skohan wrote: post #620
mdoms wrote: post #603

Earlier quoted context omitted.

> Seeing a bunch of excellent third-party cross-platform games become xbox-exclusive is really sad for gamers What are you talking about? Microsoft is embracing PC and cross play more than ever.

They will be MS exclusive. It's fine if you're a windows gamer, but this is bad news for anyone who plays games on Playstation, Linux/Steam/Proton, or Nintendo platforms. It also really should be the target of anti-trust action if that was a thing anymore. It's going to be a reality fairly soon that anyone who wants to play all the latest AAA titles will have to own at least two gaming devices. That's not only annoyi…

Why is it bad for Linux users? Does gamepass not work under Proton?

Re: Microsoft to Acquire Activision Blizzard

#683

Post by vl »

PascLeRasc wrote: post #413
apocalyptic0n3 wrote: post #222

Earlier quoted context omitted.

AT&T's acquisition of T-Mobile was aborted due to anti-trust complaints if I recall correctly. The original purchase of Rite Aid by Walgreens was aborted due to similar concerns, although that one ended in a revised partial acquisition anyway. The Staples acquisition of Office Depot/Office Max was stopped as well on anti-trust grounds. They also blocked a merger of Nasdaq and NYSE. Those are all since 2010. I'm sure…

Intuit was blocked from buying Credit Karma Tax just recently. https://www.justice.gov/opa/pr/justice-department-requires-d...

And MS from buying Intuit

Re: Microsoft to Acquire Activision Blizzard

#684

Post by Lio »

viktorcode wrote: post #606
YXNjaGVyZWdlbgo wrote: post #122

Earlier quoted context omitted.

At this rate it's going to be Tencent vs Microsoft and if I have to choose I pick Microsoft.

There's a difference though. Tencent doesn't dictate its studios how to conduct business. Microsoft on the other hand made Bethesda leave PlayStation, which negatively impacts their revenue, but plays into the hand of Microsoft.

> Tencent doesn't dictate its studios how to conduct business.

Isn't that exactly what Tencent are well known for doing?[1]

> According to the designer, Riot managers had provided a PowerPoint presentation that she assumed Tencent had made for them, although she didn’t know for sure.

1. https://www.theguardian.com/news/2021/jul/15/china-video-gam...

Re: Microsoft to Acquire Activision Blizzard

#685

Post by kristjansson »

xhrpost wrote: post #655

I have to wonder how much investing in some of today's tech behemoths comes down to viewing them more as a holding company / investment firm and less about their original core products. Microsoft has lost tons of desktop share over the last decade, this should have been a death signal for them but instead amazing acquisitions like Mojang, GitHub, ActBliz have pushed them to an amazing market cap. Similar with FB loos…

Once you have billions and billions in profits to reinvest there's hardly a choice, is there? At some point, the firm has to invest in new product lines to support or supplant its tentpoles, and restricting the space of investment opportunities to those generated internally unnecesarily limits its options (viz. AAPL with more cash that it can spend)

Re: Microsoft to Acquire Activision Blizzard

#686

Post by bravetraveler »

mathattack wrote: post #560
curiousllama wrote: post #315

It's wild how Microsoft has been able to vertically integrate gaming. They now own the distribution (Xbox Cloud Gaming, Xbox Game Pass), the games (Call of Duty, WoW, Starcraft + what they owned before), the OS (Windows, Xbox), the hardware (Xbox, many PCs), and the back end compute (Azure). The only thing they're missing, the network bandwidth, is mostly a commodity anyway. That's a heck of a moat.

People may be flooding into vertical integration, though the history of that isn’t great. (Look at AOL/TimeWarner or Verizon/AOL/Tumblr/Yahoo) All it takes is missing one generation and the house of cards gets written down. Someone can create the next generation blockbuster for a lot less than $69bln. To argue against myself, they’ve become a lot better at picking trends since Balmer left too.

Intel has also been feeling the pain of vertical integration. Like with most things, double edged sword.

They fabricated their chips - not sure if they still do. Initially this was great, they owned the equipment and got things 'at cost'. However, they had trouble refining their tooling to get This made them less competitive for a while, while having a pile of expenses a more lean design house wouldn't have. They'll surely be fine, but it's not the same sprint they've had for quite a while.

Re: Microsoft to Acquire Activision Blizzard

#687

Post by mdasen »

mathattack wrote: post #560
curiousllama wrote: post #315

It's wild how Microsoft has been able to vertically integrate gaming. They now own the distribution (Xbox Cloud Gaming, Xbox Game Pass), the games (Call of Duty, WoW, Starcraft + what they owned before), the OS (Windows, Xbox), the hardware (Xbox, many PCs), and the back end compute (Azure). The only thing they're missing, the network bandwidth, is mostly a commodity anyway. That's a heck of a moat.

People may be flooding into vertical integration, though the history of that isn’t great. (Look at AOL/TimeWarner or Verizon/AOL/Tumblr/Yahoo) All it takes is missing one generation and the house of cards gets written down. Someone can create the next generation blockbuster for a lot less than $69bln. To argue against myself, they’ve become a lot better at picking trends since Balmer left too.

AOL/TimeWarner was a failure because because it valued AOL at $200B and TimeWarner at $164B. AOL was just way over-valued. It wasn't really an integration failure so much as paying too much for something. If Time Warner had bought AOL for $2B, it would have been fine. The problem is that they merged valuing AOL at 100x that when it wasn't worth it and later sold for $4.4B to Verizon.

Likewise, Yahoo/Verizon bought a lot of properties at inflated values. Tumblr wasn't worth $1.1B, but Yahoo wanted to buy one of the hot up-and-coming properties to feel relevant.

I think the big issue is the price one is paying and whether one has a plan for the purchase or if the purchase is more "but if I don't make a big move, what am I doing? I can't go wrong following trends, right?"

For example, AOL/TimeWarner was a situation of over-paying because TimeWarner was afraid that the internet was going to eat the world and they needed to stay relevant. AOL was so hot and it's easy to get swept up in the moment thinking "I need to get on board now or I'll miss it!" Likewise, Yahoo feared becoming irrelevant as Google took over the internet and thought buying Tumblr would make them the hip forward company once again.

Activision Blizard seems like a reasonable add-on for Microsoft. $69B isn't that much money for it given it would represent a P/E ratio of around 26. Apple's P/E is 30, Amazon 62, Microsoft 34, Google 26. So they aren't paying an absurd amount given Activision's profits. Even if they did no integration or strategy, Activision could simply continue doing its thing and contribute favorably to Microsoft's bottom line.

With a tiny bit of strategy, it seems clear Microsoft could get even more value out of the company. Maybe a few Xbox exclusive titles to push their console business. Maybe some stuff for their game streaming service.

If Disney has shown us something over the past few years, it's that owning IP that people like allows you to keep spinning new versions of that IP. Activision has lots of that kind of IP in the gaming space so Microsoft should be able to use that to its advantage.

I think there's a big difference between buying Activision at a price whose P/E ratio is better than your own and where there are clear strategies that could offer you even more value compared with the "omg, I'm getting left behind! I'll pay anything you want" panic purchases/mergers of other companies.

Re: Microsoft to Acquire Activision Blizzard

#688

Post by agar »

Even if blockbusters like CoD aren't Microsoft (PC+Xbox) exclusive, the power of "play it first on GamePass" or "Plays best on Series X" is extremely compelling.

Streamers, influencers, and competitive players whose livelihoods are based on some of these games will almost be forced into playing on the platform that gives them an advantage, whether that's an extra couple weeks of access or slight optimizations.

Re: Microsoft to Acquire Activision Blizzard

#689

Post by cjf4 »

palijer wrote: post #84
agd wrote: post #53

With these kind of acquisitions, other companies are going to find it very hard to compete with Game Pass. I think we'll look back in 10 years and wonder why antitrust regulators did nothing, but it may be too late by then.

I looked around for a while, a d I can't actually find a list of any mergers that antitrust regulations actually prevented. I'm assuming some survivor bias is involved here and we don't hear about the ones that stopped early, but it seems that what I and most folks assume antitrust regulations do is different than what actually happens. I remember the Sirius/XM merge and how those were the only two players in the mar…

GE Honeywell was a huge one.

https://www.rferl.org/a/1096891.html

Re: Microsoft to Acquire Activision Blizzard

#690

Post by Rebelgecko »

salamandersauce wrote: post #13

Wow. No wonder Microsoft wasn't willing to shame Activision like Sony and others, they were in talks to buy it. Ridiculous.

Lose-lose situation. If Microsoft talked shit about ATVI in the months leading up to the acquisition, people would accuse them of doing it in bad faith to hurt the share price and make the acquisition cheaper.
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