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DroidKnight said:

been holding off finishing the game for this update so i cant wait.

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You guys need to relax about this deal a bit. Just let it play out and see what happens.

As we say here in Dallas….how bout dem Cowboys?!?

Too bad it rained literally the entire day lol. But didn’t take away from stuffing our faces and spending time with family.

Hope everyone had a great Turkey day! Even those not in the US

Angelus said:

You guys need to relax about this deal a bit. Just let it play out and see what happens.

You're right.

Although it doesn't help when Politico leaves out that to make concessions, they formulate a complaint first.

I still think CMA holds all the power in this deal, this deal lives or dies based on CMA's decision.

Source: Idas.

Well, I finally read the whole response from MS (111 pages). So, long post incoming :p

I think that it is quite good. For starters, the tone is very different from the first one, where you could feel that they were annoyed by the decision.

From pages 13 to 69 everything is about Call of Duty: There is an insane amount of work on those pages. :O I really like how they dissect piece by piece every potential issue. And the amount of data presented is staggering.

A paragraph that I liked in this case: MS is not denying the relevance of COD, but the data doesn't automatically show that COD is the only game to attract gamers to a console or that losing it would become critical (Page 25)

While these assertions are central to the case for referral, they are not supported by any evidence. Instead, the Phase 1 Decision relies on high level points such as "CoD is currently one of the largest game franchises", "has a high level of awareness amongst gamers" and "has been consistently successful for nearly a decade". These points may all be true (as they are equally for other popular games), but do not show that the franchise is critical to attracting gamers to a console platform, nor that the loss of that one franchise would foreclose the console in question from the downstream market. No evidence has been provided to suggest that other Activision titles have any degree of market power. As above, the share of these titles is minimal ([0-5]% or less).

From pages 70 to 90 everything is about Gamepass: I think that they offer good arguments, specially the ones about ABK (extensively) being against subscriptions if there is no deal. Therefore, saying that without the merger all competitors could potentially have access to all the ABK content doesn’t make a ton of sense because all the evidence points against that: without the acquisition Activision is not interested in subscription services (not even their own).

From pages 91 to 111 everything is about cloud gaming: I thought that it was the most complicated issue but they again present a ton of (internal) data, in this case to downplay cloud gaming as viable option in the short - medium term. The ecosystem theory of harm is counter-argued by also downplaying the importance of Azure for xCloud or the lack of economic incentive to 'block' similar services in the future.

All in all, a very good answer with tons and tons of data.

Anyway, I took notes of things that I believe are new and interesting:

Specific notes from the CMA

The page for the case now includes a notice that is not present in other mergers in Phase 2 (I guess that they felt some pressure):


The publication of the evidence of any party on the CMA's webpages does not indicate in any way endorsement by the CMA of the views expressed in the evidence or acceptance of that evidence. Publication in this way is designed to assist public understanding of the issues.

On the other hand, it looks like they‘ll share more responses from other third parties:

The CMA received a large number of submissions from the public, which it is still in the process of reviewing, and which it will take into account, where appropriate, in the course of its merger investigation.

The future Universal Store is a risky move (pages 12-13)

As Mr. Spencer explained because of "[X]." In particular, the concept of a next- generation game store that operates across a range of devices ("Universal Store") is risky… Moving consumers away from the Google PlayStore and Apple AppStore on mobile devices will require a major shift in consumer behaviour. Microsoft hopes that by offering well-known and popular content, gamers will be more inclined to try something new. But this is far from guaranteed and also depends on proposed regulations and legislation in the U.S., and around the world, that would require Apple and Google to make their platforms and app stores more open to third-party stores and commerce platforms. As such, in seeking approval from its Board of Directors as a public company, Microsoft leadership could [X]. Nevertheless, as Mr. Spencer confirmed, Microsoft will measure the strategic success of the Merger on [X].

MAU for PlayStation and Xbox (page 35)

Publicly available data suggests that PlayStation MAUs in 2021 are more than double Xbox MAUs (107 million versus [X] million).

Steam Deck is a new console for MS (page 38)

Steam has launched a new console without Call of Duty: The Steam experience is also directly relevant to console, as Steam has recently launched a new console, the Steam Deck, without Call of Duty. The Steam Deck is a handheld console which has a docking station that allows it to be plugged into a television or used as a PC. 141 The console runs on a Linux-based operating system and allows gamers to access Windows PC games through the Steam digital storefront. In the words of Valve, "[t]he Proton translation layer allows most Windows games to run with equal or better performance on Steam OS without requiring game developers to do any heavy porting work to get their games running". This means that there are thousands of games available to play on the Steam Deck – and as explained above this does not currently include Call of Duty. Valve has promoted the Steam Deck using a range of other popular titles (including a number of Sony first-party titles) – see Figure 32 below.

The extreme levels of monetisation used by ABK regarding COD (pages 39-40)

Even though Activision has faced a strong incentive to monetize every form of exclusivity which makes sense for Call of Duty, there has been no foreclosure: Activision has had a strong incentive to come up with different forms of content and marketing exclusivity which it could monetize in its negotiations with Microsoft and Sony. Since 2005 these marketing arrangements have included: (i) exclusive console marketing arrangements following the release of new titles and downloadable content; (ii) priority access to new maps (until these were phased out following the introduction of cross- platform play); (iii) exclusive access to the online alpha version of the game and access to the beta version of the game 5 days earlier than gamers on Xbox consoles or PC; (iv) game bonuses such as extra "tier skips" on the battle pass; (v) the ability to access additional "experience points" (e.g., through exclusive events); and (vi) certain in-game character customisations and content bundles.

MS left ABK in 2015, not the other way around (page 41)

Sony was not foreclosed when Call of Duty was exclusive to Xbox: There is no indication, based on Call of Duty's prior history of differentiation between versions of Call of Duty on Xbox and PlayStation, that this could in any way affect rival consoles' ability to compete effectively. Sony's share of console sales grew in the period from 2005-2015 when Xbox had certain exclusive rights to Call of Duty content. There are many more popular games available in the market in 2022 than there were between 2005 and 2015 (including Fortnite, PUBG, Apex Legends, Elden Ring and many others). If anything, Call of Duty's importance as a franchise was greater in 2005-2015. When Xbox decided not to continue with the Call of Duty co-marketing agreement in 2015, it simply found other ways to market and promote its platform. Sony, as the market leading console with an extensive first-party and third-party exclusive game catalogue, is even better placed to do the same.

(c.) Microsoft [X] Call of Duty exclusivity: Microsoft's exclusive arrangements for Call of Duty content expired at the end of 2015. (Page 31)

(d) Microsoft did not expect [X]. Microsoft did not [X], but does not believe this agreement [X]. Microsoft was not foreclosed as a result of the agreement. (Page 31)

The EMEA (Europe, the Middle East and Africa) market is where COD has more players? (Page 54)

Second, as noted in Microsoft's deal model, "continued sales of Activision Blizzard's portfolio on all platforms (console, PC, mobile)" accounted for [X] of the estimated "Value to Microsoft" from the Merger.200 Given that ca. [X]% of Call of Duty's total MAUs (and ca. [X]% of console MAUs) are on PlayStation, a hypothetical foreclosure strategy would involve putting at risk a significant portion of Activision's revenues. The consequences would be even more severe in the EMEA region where ca. [X]% of Call of Duty's total MAUs (and ca. [X]% of console MAUs) are on PlayStation. This would be a commercially irrational strategy, in particular in circumstances where Microsoft could not conceivably expect to foreclose Sony from the market.

MS is expecting to lose market share in UK

As the table below shows, Xbox in 2021 accounts for [20-30]% of the installed base of gaming consoles globally, [30-40]% in the UK, while Sony accounted for [40-50]% globally and [40-50]% in the UK – this is even excluding handheld console devices. Xbox's share of yearly sales is even lower, suggesting that its share of installed base is likely to decrease against Nintendo and Sony in the near future. The global and UK leader Sony just cannot be foreclosed by losing access to a single franchise among the broad range of alternatives for gamers available on the PlayStation platform.

20-30% of PlayStation 5 users also have an Xbox: 10-20% of Xbox users have a PlayStation 5 (page 67)

Gamers often multi-home across gaming consoles: Gamers who multi-home simultaneously own more than one gaming console. Multi-homing gamers who already own an Xbox are not impacted by a withholding of Activision content from PlayStation and/or Nintendo. They are unlikely to "abandon" their PlayStation or Nintendo console and instead simply purchase the exclusive content for their Xbox console. This severely reduces any impact on rival platforms and further hinders Microsoft ability to foreclose rivals. Third-party data procured by Microsoft in the ordinary course of business suggests that at the very least [20-30]% of PlayStation 5 users also owned an Xbox Series X/S and [X] also gamed on a PC. These metrics are as of December 2020 and are likely to have [X] at the time of this submission.

Microsoft regularly procures third-party data from NPD on console cross-ownership in the USA. The latest available data from NPD shows that in the fall of 2020, ca. [20-30]% of PlayStation 5 users also owned an Xbox Series X/S whereas [10-20]% of Xbox Series X/S users also owned a PlayStation 5. The same data also suggests that [] of PlayStation 5 and Xbox Series X/S owners also plays on their PC. The difference in share of cross-owners across consoles is likely to be explained by the ongoing semiconductor shortage caused by the COVID-19 pandemic and the fact that PlayStation 5 has witnessed a higher excess demand compared to the Xbox Series X/S. As the latest available data refers to the very beginning of the console generation, Microsoft expects the share of multi-homing console gamers to have increased materially over the course of the past months

Users with multiple consoles generally prefer PlayStation (page 68)

In the context of a survey, Microsoft has asked gamers which of their consoles is their "favourite" to play on. Generally, gamers that multi-home across consoles have reported to prefer their PlayStation over their Xbox More specifically, in response to the question: "Of the consoles you play games on, which one is/was your favourite to play on?", [60-70]% of gamers owning an Xbox and a PlayStation have reported their favourite console to be a PlayStation – [30-40]% PlayStation 4, [20-30]% PlayStation 5, [10-20]% Xbox Series X, [10-20]% Xbox One. Of the gamers owning all three consoles, [40-50]% have reported their favourite console to be a PlayStation – [30-40]% PlayStation 5, [10-20]% PlayStation 4, [10-20]% Xbox Series X, [10-20]% Nintendo Switch, [10-20]% Nintendo Switch OLED, [0-10]% Xbox One, [0-10]% Nintendo Switch Lite.

Sony and Nintendo could allow access to Gamepass via browser but they don't want to (page 68)

Gamers can access content via the web browser on their console – if their console provider allows them to: Microsoft allows other content services to be accessed on Xbox consoles via the web browser on the console (e.g., Luna, GeForce Now and Stadia can be accessed via Xbox consoles). Other console providers would have the option to do the same and allow gamers using their consoles to access Game Pass through the console browser. In that scenario, gamers would be able to access content which is exclusive to Game Pass without the need to purchase a new Xbox console. From a technical perspective, a gamer on any platform can access Game Pass, as long as the platform supports a modern implementation of a chromium-based browser and does not block the site. Game Pass is available via the browsers on increasing range of other devices, including Valve's Steam Deck, Razer and Logitech handheld gaming devices, the Meta Quest platform, new Samsung smart TVs, and Google Chromebooks. Sony and Nintendo do not currently allow gamers on their platforms to access Game Pass or other gaming services via the browsers on their consoles – but could easily do so.

The potential problems of having content from ABK on Gamepass (page 70)

The reality is that Activision content is present today on multi-game subscriptions only to a very limited extent. For reasons previously explained and reiterated below, publishers like Activision have conflicting incentives when it comes to the economics of placing their content on multi-game subscription services. Moreover, Microsoft would have to navigate current contractual restrictions to place Activision content into Game Pass. However, the intention of improving Game Pass with the inclusion Activision content would be to differentiate the service give gamers the benefit of accessing these titles more cheaply via a subscription.

ABK seems to be "against" subscription services and cloud gaming (page 76)

Activision has never published any newer content on multi-game subscription services and has no intention to do so in the future.

This stance is reflected in statements made by Activision's senior leadership, who in recent Investigational Hearings with the FTC in relation to the Merger have stated on the record that [X]. The Parties specifically note that:

(a) Bobby Kotick, CEO of Activision stated that [X]. Specifically, Mr. Kotick stated that [X]. Mr. Kotick was even more unequivocal in his position on cloud streaming, calling it [X]. Regarding the technical requirements, Mr. Kotick stated that even if latency and control issues could be improved, he considered that game developers were [X]. Likewise, Mr. Kotick stated [X]. For the reasons stated above, Mr. Kotick considered cloud-based game streaming to be [X].

(b) Mr. Kotick's position has been reiterated by numerous other senior leadership figures in Activision. Mike Ybarra, President of Blizzard Entertainment, stated that [X]. Additionally, Mike confirmed that [X]. Moreover, with regards to cloud-based game streaming, Mr. Ybarra stated that [X]. Mr. Ybarra stated that [X]. Mr. Ybarra has stated his view that [X].

World of Warcraft likely not coming to Gamepass (page 78)

A large component of Activision's share of PC game publishing is due to World of Warcraft, a single-game subscription title that is not part of any multi-game subscription service and would be technically very challenging to integrate into a multi-game subscription service.

Gamepass was expected to be around 35 million in July 2022 (page 82)

Since its launch in 2017, Game Pass has gradually grown to approximately 25 million subscribers. As above, this is 10 million fewer subscribers (28%) than what was forecasted for Fiscal Year 2022.

A bit more about Sony preventing games from being included on Gamepass (page 85)

Any potential growth of Game Pass, whether or not it elicits competitive response from Sony, would only be beneficial to gamers. For completeness, Microsoft is aware that Sony has secured contractual rights to prevent games from a number of publishers from being included on Game Pass. Sony engages in conduct today which is reflective of its market power in multi-game subscriptions, including charging a significant pricing premium for its subscription services without fear of losing share in either subscriptions or consoles, as well as restrictive provisions in its agreements with publishers. Accordingly, any concerns raised by Sony in relation to the potential impact of the Merger on multi-game subscription services must acknowledge this conduct, which suggests that Sony has prioritised its own profits, rather than benefits to gamers.

For example, Microsoft understands that [X].

PC Gamepass having a small market share (page 89)

While Microsoft's share of revenue generated by multi-game subscriptions services on PC is [X] than the Parties' share of game publishing on PC, these should not be taken as an indication that anticompetitive effects are likely to arise from any strategy involving the withholding of Activision's games from rival services. It is not appropriate to sub-segment the PC gaming segment and carve out subscription services. As explained, these are just another means of paying for gaming content and do not represent a meaningfully different offering from a demand-side perspective. Game Pass' share is miniscule on PC: the overall revenue from subscription services on PC accounts for less than [X]% of the global PC gaming segment and [X]% in the UK. The beta for PC Game Pass was only launched in June 2019 and Microsoft has not seen any evidence of a cannibalisation effect in PC gaming to date. Microsoft notes that its share of distribution in PC games is limited in any event (ca. [X]% in the UK in 2021).

xCloud numbers are really small? (Page 92) We don't know the numbers, but I guess that they wouldn't frame them this way if they were good.

In December 2021, there were only around [X] million MAUs on xCloud worldwide, representing [X]% of total Xbox MAUs in the same period. These proportions are even smaller if one considers the percentage of game time: the total game-time on xCloud is only [X]% of the total game-time on Xbox console in 2021, and only [X]% in 2022. Over January - March 2022 the average share of xCloud MAUs to Xbox MAUs was [X]%

Fortnite on xCloud is having worse numbers than MS expected (page 94)

While cloud gaming on mobile may grow, adoption is not expected to be rapid as it requires a significant change in consumer behaviour. Research published by the CMA shows that, both worldwide and in the UK, where cloud gaming app users had a choice between a provider's native or web app on Android, around 99% of users used the native app, with 1% using either the web app or a combination of the web and native app. Microsoft's experience with adding Fortnite on Xbox Cloud Gaming illustrates these challenges.

Microsoft added cloud gaming as a feature of its top-tier subscription service offer, Game Pass Ultimate (which also includes the multi-player functionality of Xbox Live Gold) in September 2020. Yet, more than two years later, Xbox Cloud Gaming is still available as a "beta", meaning that it is still in second- stage testing.

(b) At launch, Microsoft was hopeful that [X].373 But even then, Microsoft understood [X].374 The 'market signal' Microsoft received, [X].

(c.) Fortnite was launched as a free-to-play game on Xbox Cloud Gaming in May 2022. 375 As the game was free-to-play and available separately from Game Pass, Microsoft was relatively optimistic as to the number of potential users of the service. [X].

(d) As shown by Figure 53 below, the number of players on Fortnite on Xbox Cloud Gaming [X].

Azure is not optimised for gaming (page 104)

Azure has a limited number of data centres in the UK: Azure provides IaaS from a limited number of [X] data centres in the UK. The locations of Azure's data centres are optimized for enterprise customers, not gaming customers. Azure GPU optimised servers suitable for cloud gaming are located at third- party data centres in London. Azure does not, therefore, offer a broader footprint in the UK than its competitors.

Cloud gaming is losing money for MS right now (page 107)

Microsoft has no history of using Windows OS to target cloud gaming providers: Cloud gaming providers such as Amazon, Google and Nvidia have been SPLA partners for many years. Microsoft has not withheld access to the SPLA program, nor has it degraded access to Windows Server under SPLA in the past. The revenue Microsoft receives from licensing Windows Server via SPLA is substantial at ca. USD [X] billion [X] (equating to approximately [X]% of SPLA revenues) and it is not credible that Microsoft would forgo this revenue in order to protect its position in cloud gaming which does not generate material revenues and is loss-making.

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Microsoft is really laying everything out there to get this deal through.

They're making some very strong and well thought out arguments.

Some other interesting data in there.

  • PlayStation MAU is more than double Xbox's.
  • Microsoft left COD's marketing deal in 2015 - That's around the time Xbox was reportedly having trouble with funding, hmm.
  • Microsoft expects to lose market share in UK @trunkswd 
  • Gamepass was expected to be around 35 million in July 2022.
  • Sony is blocking games from a number of publishers from coming to Game Pass.
  • Game Pass on PC seems to be struggling, described as "miniscule" as expected.
  • xCloud seems to be underperforming in both numbers and losing money.

Love the "if you acquire Activision-Blizzard then others won't be able to put their content into a subscription service and that's unfair" from the CMA but Activision/Bobby/Blizzard are like "Lol. We hate subscription services; we would never have done that anyway"

Which was obvious to anyone who has been following Activision, they've barely touched subscription services, they've just not said it out loud until now, but it's like Take-Two, their CEO outright states that he doesn't believe in subscription services like Game Pass so it's not a surprise another large publisher also doesn't.

World of Warcraft not coming to Game Pass was obvious, as I said from day one.

Last edited by Ryuu96 - on 24 November 2022

Happy Thanksgiving to all Turkey lovers.


Basil's YouTube Channel


Angelus said:

You guys need to relax about this deal a bit. Just let it play out and see what happens.


There are only so many things that we can discuss about it basically. It's going to go through, there is just a bit more resistance to what we initially thought.

God, I wish someone accidentally leaked all the redacted stuff

Barozi said:
konnichiwa said:

Well completed Vampire survivors, up to the next game.

btw. I also finished it just minutes before I saw this article.

Yeah saw it when I deleted the game but seems they keep updating it ^^'  also the new achievements take no time at all.

Ps: You posted again later but their is a new character that comes with the stage. 

Last edited by konnichiwa - on 25 November 2022