Microsoft Activision Deal Struggles with the New Normal | EA Takes the Fight to Cheaters
- Microsoft goes on the offense with regulators to close Activision Blizzard deal
- EA may be exploring automation to crack down on cheaters
- Most Anticipated Game: The Callisto Protocol
- Other News: Nvidia, Xbox, Ubisoft & more
Mergers & Acquisitions
Microsoft Activision Deal Struggles with the New Normal These regulatory hurdles could be the future of acquisitions
The ongoing Microsoft Activision saga saw two more twists last week, with neither favorable to closing the deal. While these are unlikely to kill Microsoft's $69 billion acquisition of Activision Blizzard, these developments, less consolidation-friendly regulatory environment seriously.
The dual setbacks come in the form of the American FTC and European regulators. In America, Politico reported that, though undecided, the FTC is leaning toward filing suit in court to block the deal. The regulatory body’s main concerns appear centered around whether Microsoft will use Call of Duty or other future titles to squeeze out competition.
- The FTC didn’t find testimony from depositions of Microsoft CEO Satya Nadella and embattled Activision boss Bobby Kotick convincing
Across the pond, Microsoft is attempting to put out regulatory fires by putting forth to EU antitrust regulators concessions.
- Reuters is reporting that Microsoft will offer Sony a 10-year licensing deal to keep Call of Duty on PlayStation
- In Microsoft’s words, "Sony, as the industry leader, says it is worried about Call of Duty, but we've said we are committed to making the same game available on the same day on both Xbox and PlayStation. We want people to have more access to games, not less."
The Big Picture: Beyond the Microsoft Activision Deal
As we’ve mentioned previously, the days of regulators signing off on multibillion-dollar deals with minimal scrutiny are a thing of the past (at least as long as the political winds push the FTC to be more aggressive). Oddly enough, the gaming industry got a preview of this last month in the literary publishing industry, with the collapse of Simon & Schuster’s acquisition of Penguin.
- The merger of two leading publishers over concerns it reduced competition would harm content creators (authors, not video game devs, in this case)
- Simon & Schuster’s (rejected) argument that the deal was needed to compete with a much larger Amazon are similar to Microsoft’s claims of needing Activision to compete with a larger Tencent or PlayStation
The Clock is Ticking
Winning court battles won’t be enough: If Microsoft wants to close the deal under current terms and avoid a $3 billion break-up fee, it must do so by July 2023. Activision isn’t off the hook either, given how much baggage its current leadership has, not to mention a likely talent exodus of those sticking around in hopes of improved compensation from Microsoft. It may not be as neat as originally planned, but we still think the Microsoft Activision deal goes through. The Call of Duty concession is a good start, and it’s worth noting that it isn’t even that much of a sacrifice.
- Selling consoles at a loss makes it more profitable to increase games sales, rather than console purchases
- Most of Activision’s revenue is from microtransactions, which benefit from larger player bases
- Microsoft could still favor itself with platform-exclusive content or by favoring development of non-PlayStation versions of games
-Avery Bissett, Head Writer
EA Takes the Fight to Cheaters EA patent proposes snooping software to stop "teaming"
EA is exploring the use of software to crack down on "teaming" and other unsportsmanlike collusion,according to Exputer. The innovative idea is understandable given cheaters spring up like weeds, but it’s also potentially cause for unease.
The patent suggests an algorithm that would analyze social and in-game relationships, as well as interactions, to determine if players are improperly teaming up. For example, in a free-for-all battle royale, EA could use lobby and post-game chats to determine if players improperly worked together. The killer feature, so to speak, would be the complete automation with no need for direct human involvement (read: saving money on hiring.)
- It’s worth noting that companies file patents that go nowhere all the time
- EA could also be developing this feature to license out
Technology Cuts Both Ways
Cheating can be a major thorn in the side of gaming. This is especially true given the rapidly growing role of betting and esports, where large sums of money are gambled on the assumption that results are not rigged.
- Cheating can also drive away players, as Activision found out with the original Warzone
It’s worth noting, however, that much like real sports, the solutions aren’t clear cut.
- Cheat creators will always have a head start against those trying to crack down
- Banning thousands of accounts isn’t a great look for publishers wanting to flaunt user stats
- Making it harder to create accounts for cheating isn’t popular with gamers, who don’t want additional requirements such as registering a phone number to play
No Silver Bullet
EA’s proposal could be effective, but it also brings risks. Will a company – say one notorious for milking franchises like FIFA – be able to resist the siren call of using data collected to stop cheating for marketing or non-anti-cheat purposes? Ultimately, it comes back to the same problem plaguing social media moderation: Policing bad behavior still requires a staff and expertise, and that’s not cheap.
-Avery Bissett, Head Writer
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Upcoming Games (December 2 - 8)
The Callisto Protocol - PC, PlayStation, Xbox
Chained Echoes - PC, PlayStation, Xbox, Switch
Firefighting Simulator - The Squad - PC, PlayStation, Xbox
Hello Neighbor 2 - PC, PlayStation, Xbox
Hubris - PC VR
Impaler - PC
Intrepid Izzy - PlayStation, Xbox, Switch
IXION - PC
Knights of Honor 2: Sovereign - PC
Kukoos - Lost Pets - PlayStation, Switch
Marvel's Midnight Suns - PC, PlayStation, Xbox
NecroBouncer - PC
Need For Speed Unbound - PC, PlayStation, Xbox
Paper Cut Mansion - PlayStation, Switch
The Rumble Fish 2 - PC, PlayStation, Xbox, Switch
Sunshine Shuffle - PC
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Terror of Hemasaurus - PlayStation, Xbox, Switch
Togges - PC, PlayStation, Xbox, Switch
Witch On The Holy Night - PlayStation, Switch
Editor's Most Anticipated: The Callisto Protocol. "Shoot for the moon, and you will always land among the stars."
The Callisto Protocol, from developer Striking Distance Studios and publisher Krafton, is widely considered to be the spiritual successor to the beloved Dead Space franchise. Dead Space co-creator Glen Schofield directs the new title, where players take on the role of an inmate of a futuristic prison stationed on the moon of Callisto (not sure what the protocol is there) who must fight for survival against grotesque, mutating monsters.
Many elements and themes from the original Dead Space trilogy were immediately recognized in cinematic and gameplay trailers for the upcoming release, including use of an in-game HUD holographic and on-character health bars (in this case a spinal implant on your character) - elements that added to the immersion and atmosphere of the predecessors.
The new third-person title looks to capitalize on what made Dead Space work and expand on it - creating a story-driven, survival horror experience that incorporates new mechanics around melee combat and enemy evolution. Dead Space has long been one of my favorite video game franchises, and I am eager to dive into this world, and hopefully, make it out alive.
Fun Fact: The Callisto Protocol was originally pitched as being part of the PUBG: Battlegrounds universe, before Schofield announced on Twitter it "grew into its own world."
-Dustin Downs, Editor
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The Tap: News to Go
- GPU: Nvidia is reportedly planning to retire its aging GTX 1660 and GTX 1660 Super cards, following its recent phasing out of the RTX 2060 and RTX 2060 Super (courtesy of Tom's Hardware). These production changes leave a hole in Nvidia's midrange segment as it tries to push excess RTX 30-series GPUs.
- Console: The Xbox Series X was one of Black Friday's "hot products," according to Adobe (courtesy of Video Game Chronicles). Neither Sony's PS5 or the Nintendo Switch made the cut, although Call of Duty Modern Warfare: II did.
- GPU: Major supplier TSMC is reportedly hiking prices of wafers for its 3nm process by 25% compared to the current 5nm process favored by the likes of Nvidia (courtesy of Tom's Hardware). While not the major cost in GPU or CPU production, more expensive wafers could still impact future products.
- Industry: The video games industry has committed $17 billion to achieving net-zero emissions, according to AfterClimate. Companies like Microsoft and Ubisoft received high marks, while Square Enix and others were singled out for improvement.