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Microsoft has acquired Activision Blizzard. Woah. .


MidWalian
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17 minutes ago, Kiwi Cake said:

 

This is why MS is aggressively pursuing mobile and PC in addition to consoles. GP ultimately works best at scale - while a price rise eventually is likely, I'm not certain that we'll be talking about huge price hikes, because it's not the cost of the sub that should be bringing in the money, it's the scale of the service.

 

The gaming audience is thought to be around 3billion people, with the majority of the money made being in the mobile and PC spaces. Through their growing mobile business, and dedication to traditional "premium" games being playable on PC and mobile via the cloud, MS is hoping to expand GP way beyond the console market. That's why it's slightly amusing when people laugh at MS because you "don't need to buy an Xbox to play their games" - the console market is just a piece of the pie that MS actually want to be eating.

 

Activision is already well established in these areas and on that level, the purchase makes a lot of sense even if you ignore the "exclusive console games" angle. It's a broad strategy that, so far at least, appears to be working well for them. At 25million subs, GP will already be bringing in billions a year - if they get to 50? 100? 200 million? You're talking ridiculous sums of money even without fee increases. You're potentially talking about more money than PlayStation currently makes in its entirety from one service. It's all to play for and MS are playing hard.

On the topic of MS eventually turning evil, it's almost a guaranteed thing. Even if you trust Spencer, he'll eventually move on or retire and things will change, but this is true for all of the big three and we've seen it from them all time and time again. My advice is to just enjoy things while things are good.


yeah I think this purchase is mostly not about Xbox Series X. In fact getting Microsoft into the hands of everyone has been the same strategy since the start, just poorly communicated for the XBO. Maybe the judge ruling in Apple v Epic have given them a framework for a strategy to go all in and also get some of that sweet 30% pay to win dollar too.  

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4 minutes ago, Majora said:

 

The mistake some people keep making when talking about this acquisition is that they think way too small and short-term. 

 

Microsoft are playing the long, long game here. The way some people talk you'd think Microsoft had a five to ten year deadline to recouperate the 70 billion or something. Microsoft can afford to not see that money back for a long, long time. Right now it's all about getting people into the ecosystem and getting them to buy accessories and MTX and digital games and, yes, subs. And using Bing and Edge and maybe renting movies and TV shows. It's so much bigger than just 'when will Gamepass subs have recuperated 70 billion?' it's getting people to invest into the brand as a whole. Into Gamepass but also into additional revenue streams and services off the back of that.

 

This is a decades long play, they don't need to worry about the 70 billion being recuperated any time soon. All they're going to be bothered about right now is whether the 70 billion they've spent will do more for their business than it would have done just sitting in the bank being eaten away by inflation.

 

Netflix are currently a single service company who have acquired billions and billions of dollars in debt producing mountains of original content to get into the position they are now. But they're now the streaming service everyone knows about and that everyone has pretty much by default because everyone else has it and talks about it. It's worth taking huge losses early on to get into the dominant position and Microsoft are calculating that they are in the dominant position, by far, in the games streaming sub sector and that they need to forge ahead as quickly as possible, profits be damned at this stage, to build an unassailable lead. 

 

And they can afford to do so. Again, anyone talking about how long it will take to see that 70 billion back through subs is thinking far, far too small.


yeah. But regardless of their end objective, we are all being subsidised to play Gamepass so always find the “best value in gaming” line to also be shallow and short term

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5 minutes ago, Lorfarius said:

Another thing to remember that some of Microsofts revenue for last year was around 45 billion. They aren't struggling to make money before this and they won't be after.


‘some of Microsoft’s revenue’? I didn’t know you were an accountant?

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4 hours ago, El Spatula said:

Nintendo's approach to backwards compatibility is essentially "LOL buy it again sucker" and you don't see tonnes of moaning there. 

 

Haha, what? People (rightfully) complain about it all the time. 

 

Man, I wish I had the confidence to just spout any old thought definitively in this manner. 

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1 hour ago, Lorfarius said:

Another thing to remember that some of Microsofts revenue for last year was around 45 billion. They aren't struggling to make money before this and they won't be after.

 

That's roughly their revenue every quarter, not year.

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54 minutes ago, rafaqat said:

 

lol. 


lol? The gist of that gamefaqs post was that Sony and Nintendo always used to ‘moneyhat’ it’s exclusives in the past so why not Microsoft. It’s not unreasonable to point out that Sony and Nintendo’s investments were in the context of computer game supremacy and the $ involved reflects that. As we are all keen to acknowledge, MS ambitions are beyond that, and unsustainable if they were intending to make money off Xbox sales.

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2 hours ago, mikeyl said:


yeah I think this purchase is mostly not about Xbox Series X. In fact getting Microsoft into the hands of everyone has been the same strategy since the start, just poorly communicated for the XBO. Maybe the judge ruling in Apple v Epic have given them a framework for a strategy to go all in and also get some of that sweet 30% pay to win dollar too.  

What MS are doing and have been doing ever since they started the backwards compatibility project and introduced Game Pass has never has been about the short term, they’re thinking 20 years ahead and beyond. Even Game Pass itself, as it stands today, will only be a small part of their vision; that is to be the number one provider of subscription based services.  

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Or, instead of needing to claw that back, dollar for dollar, by making Game Pass $MuchMore per month, it's a long term thing to just generally get more subscribers and ensure ecosystem lock in, independent of device (presumably there's Xbox streaming for TVs coming, and definitely an xCloud stick in the works).

 

It'll go up in price, everything does. But I'm not sure it'll involve the maths needed to claw back this deal.

 

edit - Stanley said it better.

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I also don’t buy into the doom mongering suggesting the service will get poorer once they get more subscribers, the service will only get better IMO. If you want people to keep subscribing then you provide great content, that’s what buying all these studios is about. In a couple of years time Game Pass will be booming, and it’s not like it isn’t good already. 

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6 hours ago, Robo_1 said:

Was that from Neogaf or Reset? Just curious to read how the discussion went after that, if you have the URL to hand, that would be super handy, cheers. :)

I saw it posted on Twitter, but I have found the original post.

https://www.resetera.com/threads/washington-post-phil-spencer-interview-on-the-activision-deal-and-more.542051/page-14#post-80640275

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On the subject of paid exclusives. I wonder if SE and Atlus are taking a good look at their exclusivity contracts with Sony, I wouldn't want to be releasing a JRPG on anything other than the Switch these days.

image.thumb.png.b5e2d57006adffc56983b8db12060feb.png

Yes, that is the 'all formats' chart.

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5 hours ago, Popo said:


The deal is far more about high levels of global inflation pushing big companies with lots of cash towards investing that cash in assets, and King-owners Activision-Blizzard’s share price having recently tanked, making them an ideal target. 
 

It has nothing to do with kindly Uncle Phil wanting to clean up the games industry, as nice an idea as that is. 


There are probably hundreds of different factors that all came together for MS to decide to move forward with this deal. You’ve certainly outlined one of them. But, if you honestly think that the current issues, walkouts, pending litigation, and plans to handle all that had “nothing” to do with it, well you’re bonkers.

 

Deals like this can come together fast, but they never come together without a metric shit tonne of analysis on virtually everything. Especially when some of those things are pretty big current affairs in an area you’re clearly trying to move the needle on.

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5 minutes ago, Waggo said:

basic lack of understanding as to how business actually works


check out Mr Business Businessman here, it’s not the insult you think it is.

 

I don’t think it that controversial to consider whether we are we still in the introductory offer stage of the Gamepass project and not what the long term price to consumer and to other providers will be. It certainly won’t be £30 + £1 a year.

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4 minutes ago, mikeyl said:

 It certainly won’t be £30 + £1 a year.


Their model is going to be about scale. If £30 brings in enough subscribers to reach the revenue target they have, it’ll be £30. Every increase will lower the potential audience, so a higher price doesn’t automatically mean higher revenue. It wouldn’t surprise me if MS plan on people using the ‘loophole’ and just see it as extra revenue when they don’t. The idea that we’re all on the inside of some secret they don’t know about is and will ‘close’ when they find out is adorable.

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9 minutes ago, rgraves said:

The idea that we’re all on the inside of some secret they don’t know about is and will ‘close’ when they find out is adorable.


Ha no, it’s the exact opposite, I’d imagine a significant number are aware of £30+£1 and Microsoft are for now, in collecting the numbers needed for “scale”, willing to take the hit on. That’s not the price of games though

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13 minutes ago, mikeyl said:

I don’t think it that controversial to consider whether we are we still in the introductory offer stage of the Gamepass project and not what the long term price to consumer and to other providers will be. It certainly won’t be £30 + £1 a year.

It’s not that now, it’s just an exploit MS appear happy to leave in place for the time being. Once the market hardens to

levels they’re happy with they’ll close that loop hole.  

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Can we stop calling it a loophole. It’s not a loophole. It’s an offer that MS have on the table, and know 100% about, and support. It’s not a mis-price , or an error, or something that’s going to be new to anyone inside the MS pricing team.

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2 minutes ago, rgraves said:

Can we stop calling it a loophole. It’s not a loophole. It’s an offer that MS have on the table, and know 100% about, and support. It’s not a mis-price , or an error, or something that’s going to be new to anyone inside the MS pricing team.

I don’t know how they’re marketing it these days, if they’re actually advertising it that way then no it’s not a loophole. I used to think it was a one time deal when moving over from Gold to Game Pass. Is that not the case? I’ve already paid full whack for mine having bought an All Access Series X.

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3 hours ago, dizogg said:


‘some of Microsoft’s revenue’? I didn’t know you were an accountant?

 

Surprised you  don't remembered, must have discussed it before but I switched career back in 2002... 20 years ago now!

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