Machiavellian said:
Yes it will happen. Different business so different conditions. MS has no streaming movie TV service like Netflix and the landscape is wide open. |
Netflix is a nascent competitor to Microsoft now thanks to their gaming segment, the nascent market being game subscription services and cloud streaming services, something which regulators are already questioning if Microsoft has too much of an advantage in, it would be easy to argue that Netflix has the potential and capability to become a direct competitor to Microsoft more than any gaming publisher they acquire thanks to their game subscription service/cloud streaming services not reliant on Xbox. The CMA/FTC/EC have in the past couple of years started to re-examine how they look at nascent markets with EC blocking a few nascent acquisitions recently.
To them, it could very much look like Microsoft, who already has an advantage in the subscription/cloud market, acquiring and extinguishing a nascent market competitor, for those reasons, it could very well have a higher chance of being blocked than even ABK (FTC will block it regardless) and regulators are going to hammer hard on a near $200bn acquisition in the current climate, in order for Microsoft to acquire Netflix, Netflix would likely have to kill their gaming division first.
Machiavellian said:
With high inflation, cash in the bank is better spent on property that make cash. Doesn't matter if MS has express any desire, its not like they expressed any desire to purchase ABK or Bethedsa until it happen. Its more about opportunity and having the cash to do it more than anything else. Not sure if the profit margin is the thing. Its the userbase that is the key, getting to 150 million users with GP is the goal and Netflix combined with GP gives MS the shot to obtain exactly that. Betting your business on GP was already risky, either go all in and worry about consequences later of back off and be middle tier or worst. MS has a chance to be the # 1 streaming option and since they whole business is already geared towards that goal, Netflix makes sense if they are up for sale. |
Spending your entire cash balance on one company is a risky move no matter what inflation is at, plus it's their entire cash balance in the bank and having to either rise an extra $60-$80bn or do the acquisition using stocks which is something that Microsoft rarely does and they'd be spending their entire cash on a low profitable company at that.
I don't think Gaming/Netflix is comparable, Microsoft for starters is already in Gaming and has been for dozens of years, they have absolutely nothing in Film/TV. Also for Gaming there was a pattern, first they acquired dozens of companies, then Phil was promoted to Satya's leadership team, then they banged on about being all in on Gaming and then they went for Zenimax and then they went for ABK...There's absolutely none of that in regards to Film/TV markets, there's no pattern, there's no history and there has been no interest expressed by anyone in Microsoft for that market.
As I said, Films/TV is lower profits than Gaming, it's a bigger risk, especially blowing your entire cash balance on it and even if they got Netflix it would be years before they combined Netflix/Game Pass together due to various factors (technical, infrastructure, servers, etc), in the short term they could do "buy Game Pass/Netflix and get Netflix/Game Pass for free" I.E. What they do now with Game Pass Perks.
