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Machiavellian on 01 March 2023
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DonFerrari said:
Machiavellian said:

I see statements about MS could be using that money to build up their current studios. My question is why do you believe MS is not doing this. A number of MS studios have been hiring developers. I believe there is this perception that their is this huge pool of talented seasoned developers just sitting out their waiting to get hired but the reality is that its hard to staff up companies with quality experienced talent. It take years to accomplish that task and the two situations do not equal the same thing. Meaning that MS can still be hiring for certain studios and also seek acquisitions to build up their AAA content.

So when people say that MS can use that 70b to build up their current studios it really does not work out that way. MS as a company has pools of money for multiple different purpose. The acquisition of ABK/Blizz is not just considered a Xbox game deal but instead a company wide deal. What this deal does is give MS a huge money maker in COD, it gives them seasoned experienced developers who know how to create successful AAA games and it gives them a host of popular IPs they can dip into for continued growth.

I am not going to question if ABK/Blizz is worth 70b, as I really do not care, its not my money. I will say, that the deal does give MS a lot of very successful IP and seasoned developers and studios which is hard to achieve without a lot of time. I do not believe this deal actually makes any real difference in the current period and will not change MS position against Sony but then again, I already feel MS has lost that battle a long time ago. MS is looking at the future and have given up the console war, so why play to the strength of your competitor instead of leveraging what you do best.

To start I would point that they hadn't increased number of internal teams on their existing studios to any relevant amount, plus had a big number of firing of existing employees, some working on gaming for Microsoft for over 10 years.

Second that there is a lot of countries that it is possible to build studios from scratch that they didn't go to.

I dunno why so many try to put the purchase of ABK as a matter of hiring personnel. MS intent is buying IPs and in second or third priority the expertise of the team. Just see that after MS said CoD isn't relevant now they say the purchase wouldn't work without CoD.

And yes of course ABK isn't an investment from Xbox.

 

Probably because there isn't a lot of talent out their to do so.  You hire to fill holes in projects and development.  You do not just hire a bunch of people and do not have anything for them to do.  We already seen the result of that with all the layoffs.

No one said that MS could not build new studios but tell me who will run it.  How long will it take for them to get to market with a game, how talented is the pool of people you will need to man the studio.  How many heads will you need to get the project to completion.  What is the risk that even if you get all that done, that they are able to produce a high quality AAA project.  There is one thing about saying MS could build new studio, there is something totally different about getting it done within a reasonable amount of time without being a huge risk compared to just purchasing an already established studio.

The purchase of ABK fills a lot of roles, not just buying IP because without developers to bring those IP to market, it means nothing.  I do not remember MS saying that COD is not relevant, where you did you get that statement.  As for purchasing ABK being the be all for MS, I agree its not.  It was something that landed in their lap and they among a very small list of companies actually have the resources to buy ABK.  If the deal does not go through, just means they continue what they were already doing.  May mean things go slower who knows.

Machiavellian said:

Investors have no say in how MS spends their money. They have never had a say in how MS spends their money.

Also in the bigger picture, there is nothing in the short term that MS can do that will impact Sony. Sony dominance is there because they have successfully made much better decisions than MS over the years and their brand loyalty around the world. Sony would need to severely screw up in order for MS to make any real penetration in Sony market dominance. MS always have the option to spend as much money as they want to secure developers out their so this belief that this will make a real dent I do not believe is will happen. MS best bet has always been to shake up the industry and carve out their own section instead of fighting a losing battle to out muscle Sony.

Of course investors have a say on how MS uses the money, first being very obvious on if investors disagree and decide to desinvest/sell that impacts shareprice and not to forget obligation of leadership is returning value to shareholders. The second one is that major investors have positions in the board and discussion and must approve purchases of this size as far as I know.

MS stock has no voting rights.  The main person who has super voting rights is the CEO, pretty much always been that way.  MS stock is way to diverse for any one group to effect the direction of the company.  So no, I have not seen at any time and investor change or influence the direction of the company.  Its very hard to do so with how MS stock is distributed.