Microsoft Buying Activision Blizzard Hits Its Toughest Roadblock Yet | Sony Forecasts Record PS5 Sales
What's on Tap This Week?- UK regulators want Microsoft to spin off the Activision in Activision Blizzard.
- Sony is forecasting record PS5 sales while Nvidia and Intel prep their next GPUs.
- Most Anticipated Game: Hogwarts Legacy
- Other News: Nvidia, MSI, & more
Industry
Microsoft Buying Activision Blizzard Hits Its Toughest Roadblock Yet UK regulators want Microsoft to spin off the Activision in Activision Blizzard
Microsoft’s acquisition of Activision Blizzard hit its latest, and perhaps most serious, hurdle with the UK Competition & Markets Authority’s (CMA) stronger-than-expected opposition to the $69 billion Microsoft Activision deal. On top of concluding that Microsoft buying Activision Blizzard would substantially lessen competition, the CMA proposed Microsoft divest parts of Activision Blizzard.
Wednesday’s announcement confirmed that the CMA's major concerns line up with those of the FTC in the US and European authorities.
- The primary worry is reduced competition in console gaming if franchises like Call of Duty (COD) are foreclosed (made Xbox exclusive).
- The CMA takes a similar stance to the FTC in limiting the console market to only Xbox and PlayStation, excluding both the Switch and PC.
- There's also fears of reduced competition in cloud gaming due to foreclosing franchises like World of Warcraft.
- The CMA's report cites the record performance of Modern Warfare II.
Where matters gets particularly serious for Microsoft buying Activision is in the UK's preference for structural remedies over behavioral ones, such as contracts. The CMA offered several options – ranging from very painful to complete deal breakers –for Microsoft to spin off parts of Activision Blizzard.
- Option 1: Divest the business associated with Call of Duty.
- Spinning off COD while keeping its developers may be the least appealing outcome for the Microsoft Activision marriage.
- Microsoft would be left without COD’s income and dozen studios without projects.
- Option 2: Divest the entire Activision segment of Activision Blizzard.
- This would leave Microsoft without Activision Blizzard’s largest revenue generator.
- Activision accounted for 44% of the company’s revenue in 2021.
- Option 3: Divestiture of the Activision segment and the Blizzard segment.
- Microsoft would be left with the mobile-focused King segment.
- The loss of Blizzard would significantly limit future access to the Chinese market
- Mobile gaming at Activision Blizzard overtook both console gaming and PC revenue in 2021.
- Mobile: $3.2 billion
- Console: $2.6 billion
- PC: $2.3 billion
In contrast to the EU and FTC, the CMA’s argument hinges heavily on a polling from DJS Research. This figures to be one of the main points of contention between proponents and opponents of the deal.
Source: CMA
- For those who bought based on game availability, COD was the most influential title (73%).
- If COD had not been available on PlayStation, 15% would have bought another gaming device.
- 53% would have bought the PlayStation still, while 16% would have bought the PlayStation and another device.
- If buying another device, 30% would have chosen an Xbox and only 9% would have chosen a PC.
- The survey's limited sample (only COD players on PlayStation) and low response rate (4.4%) could be challenged.
- The survey’s finding that the number of PS5 (63%) and PS4 (62%) owners are roughly equal – despite the PS5’s well documented supply challenges in recent years – raises questions of whether or not the survey’s sample is representative.
Microsoft has its work cut out between now and April 26, the deadline for the CMA to file its final report. If it wasn’t clear before, Activision Blizzard CEO Bobby Kotick’s recent attempt to pressure UK regulators into approving the Microsoft Activision deal suggests that they underestimated the opposition. Concluding the deal by its summer deadline is still possible, but it’s increasingly likely that Microsoft will be forced to make concessions if it wants to limp across the finish line with Activision Blizzard.
Industry
PS5 Set for Record Quarter as Intel, Nvidia Prepare New GPUs Intel signals it’s in for the long haul with video cards
February brought the latest round of financials and updates in the video game industry. Despite overall challenging market conditions, falling profits, and mass layoffs, there were a couple bright spots.
Intel Isn’t Quitting
After the rocky launch of Arc Alchemist GPUs, Intel appears to be committed to not only putting out its next generation of GPUs (Battle Mage), but avoiding past problems. Intel Fellow Tom Petersen confirmed that the architecture for future graphics will be split into integrated and discrete variants. (Courtesy of WCCFTech)
- LPG will be optimized for less powerful integrated GPUs.
- HPG will be optimized for gaming and more powerful applications.
- Intel also wants to avoid product bloat and streamline QA and driver support.
Arc Battlemage GPUs are expected to be revealed until around the holiday season, at the soonest, but Intel is signaling that Arc’s delays and launch bugs weren’t enough to force it out of the discrete GPU market. Despite the gap between Alchemist and Battlemage, Intel seems to be focused almost entirely on Battlemage and putting Alchemist (and a potential refresh of it) behind it. Intel may also opt for a smaller, but more focused lineup of GPUs.
Unfortunately, any Intel Arc news must be taken in the context of Intel's overall performance. Its most recent quarter saw revenue plummet 28% YoY, which makes the future of Intel's struggling graphics segment even more uncertain.
Nvidia RTX 4070 Targeting April Launch
Nvidia’s RTX 4070 is reportedly arriving in April. Sharing the same silicon and 12GB of GDDR6X memory as the recently launched $799 RTX 4070 Ti, the main question will be price. The last generation RTX 3070 launched "officially" at $499, but an increase to $599 or higher seems all but guaranteed. With Nvidia scheduling its annual GTC event for March 20-23, we'll likely have more details around the end of March.
- The mainstream-targeted RTX 4060 could potentially arrive in the summer.
2023: The Year of the Console?
Challenging economy or not, Sony is expecting a record Q4 FY 2022 (the first three months of 2023) for PS5 shipments. After shipping 12.8 million PS5s in the last nine calendar months, Sony upped its forecast for FY 2022 to 19 million PS5s. The 6.2 million units it plans to ship this quarter would more than double the record of PS4s shipped in the first quarter of a calendar year. It’s worth noting that, PS5 shipments and sales are not the same, and retailers may find themselves needing to discount PS5s.
- Nintendo also announced it’s sold 122.55 million units of the Switch as of December 31.
- The Switch now surpasses the PS4 and Game Boy Color in lifetime sales.
- Nintendo, however, lowered its shipment forecasts for Q1 2023 from 19 million to 18 million.
- Xbox hardware revenue for the most recent quarter (Q2 FY 2023) dropped 13%, with software and services revenue falling 12%.
- Some of the hardware decline can be attributed to heavy discounting of the Xbox Series S during the holidays.
- Xbox will be counting on the H1 2023 release of Starfield to boost both hardware and software revenue.
-Avery Bissett, Head Writer
The ultimate experience where fashion meets everyday lifestyle enabling you to have the competitive edge at being the best in both.
Be the first to have exclusive access to:
• Unreleased Merchandise
• Local Live Gaming Events
• Private PARTY Competitions
• Giveaways
• And to Join the
-RESID3NCY FAMILY-
Supply Drop: Games & Players
Upcoming Games (February 10 - 16)
Go! Go! PogoGirl – PC, PlayStation, Xbox, Switch
Hogwarts Legacy – PC, PlayStation, Xbox
Journey to the Savage Planet: Employee of the Month Edition – PlayStation, Xbox
Out Zone – PC
Pharaoh: A New Era – PC
Returnal – PC
Ten Dates – PC, PlayStation, Xbox, Switch
Theatrhythm Final Bar Line – PlayStation, Switch
Toaplan Arcade Shoot ‘Em Up Collection Vol.1 – PC
Truxton – PC
Twin Cobra – PC
Wanted: Dead – PC, PlayStation, Xbox
Wild West Dynasty – PC
Zero Wing – PC
Most Anticipated: Hogwarts Legacy. Perhaps one of the most controversial game releases in recent history – Hogwarts Legacy has already stirred up a huge buzz beyond just the gaming industry, both positive and negative (to put it lightly).
Developed by Avalanche Software and published by Warner Bros. Game under its PortKey Games label, Hogwarts Legacy is the first full-scale, open world video game from the Harry Potter franchise. Past releases since 2001 have mostly been limited to adaptations of single movies, as well as the Pokémon Go-like, mobile AR game Harry Potter: Wizards Unite in 2019.
With the pre-order's 72-hour early access, the internet has already been populated with (mostly) positive gameplay reviews, as well as record Twitch stream views – though these streams have already generated their own controversies around player harassment.
Despite the ongoing controversy surrounding Harry Potter author J.K Rowling's comments on the trans community and the growing discourse over the inclusion of a trans character in the game, Hogwarts Legacy has shown to be one of the most anticipated titles of the entire year. Only time will tell the legacy it truly leaves.
-Dustin Downs, Editor
Comms: Social Campaigns
The Tap: News to Go
- GPU: Support for Nvidia's recently announced RTX Video Super Resolution upscaling technology has been added to Chrome and Edge. (Courtesy of VideoCardz) This feature would not only allow video upscaling of media, but theoretically offer improved graphical quality for cloud gaming via internet browsers.
- GPUs: MSI is releasing its first AMD Radeon 7000 series video card in North America almost two months after AMD's RDNA3 launch. The $1,100 model RX 7900 XTX Gaming Trio Classic is available through Newegg for $100 more than AMD's reference card. (Courtesy of Tech Power Up)
- PlayStation: Sony studio Naughty Dog announced it will be delaying the March 3 PC release of The Last of Us to March 28. While it explained the delay as a desire to further improve the port's quality, this new date also gives the PC release more time to benefit from the publicity surrounding HBO's hit adaptation of The Last of Us.
