• Hey, guest user. Hope you're enjoying NeoGAF! Have you considered registering for an account? Come join us and add your take to the daily discourse.

Microsoft / Activision Deal Approval Watch |OT| (MS/ABK close)

Do you believe the deal will be approved?


  • Total voters
    886
  • Poll closed .
Status
Not open for further replies.

SirTerry-T

Member
LMAO someone is already foaming in the mouth for Microsoft to buy SIE so they can add it to their gamepass. 😂 I can’t with these clowns. Im assuming its the same shit resetera is foaming for. They must have lower income in general there.
Lower income shouldn't be used as ammunition in a playground worthy pissing contest between which plastic boxes' Daddy has got the biggest wallet.
There are people living in what were financially comfortable areas of the world queuing for fucking food banks to open.

Get some perspective.
 

ReBurn

Gold Member
What? How?

Suppose I buy COD on PlayStation every year. And if MS publishes COD on PS, they get the following revenue from me every year.
  • Year 1 = $49 (70% of $70)
  • Year 2 = $49
  • Year 3 = $49
  • Year 4 = $49
  • Year 5 = $49
Total Xbox revenue on PS = $245

Now suppose I switch from PS to Xbox. This is what MS will get from me over the next 5 years:
  • Bought an Xbox = $499
  • Xbox Live Gold (5 years) = $600 ($120 per year) Correct me if I'm wrong with this.
  • Year 1 = $70
  • Year 2 = $70
  • Year 3 = $70
  • Year 4 = $70
  • Year 5 = $70
That's assuming I did not buy ANY first-party Xbox game, ANY third-party game on Xbox, or Game Pass -- which obviously won't be the case.

Total Revenue = $1,449.

Xbox Profit = $1,449 - $245 (lost revenue on PS) = $1,204.

Based on the number of surveyed people who said they will switch, CMA calculates that it will be more profitable for Xbox to remove COD from PlayStation, as their gained revenue on Xbox will be higher than the lost revenue on PS.
This math is wrong. Sony doesn't lose money when people buy an Xbox or when people buy a Gold subscription. People can already switch to Xbox without this acquisition going through. All Sony loses when someone switches to Xbox this scenario is their cut of a COD sale.

Presumably people would find enough value in all of the first party content that Sony releases that they would continue to play games on PlayStation, including COD since it wouldn't be leaving PlayStation any time soon. Unless you're saying that the only reason people buy PlayStation is for Call of Duty, but I don't think that's what you're saying.
 
Last edited:
cr
Lower income shouldn't be used as ammunition in a playground worthy pissing contest between which plastic boxes' Daddy has got the biggest wallet.
There are people living in what were financially comfortable areas of the world queuing for fucking food banks to open.

Get some perspective.
cry somewhere else, games are recreational. get some papa peck tive.
 

reinking

Gold Member
Sane people enter this thread......

Interrupting In And Out GIF by ALLBLK (formerly known as UMC)


Us....

nicky ricky dicky and dawn pillow fight GIF by Nickelodeon
 

Astray

Member
Microsoft needs to hire people who can read and interpret graphs 😂

You can easily ask some relevant questions from the points Microsoft bring up. Firstly, why do they not assume there is a crossover effect in people buying ABK games, then buying Sony, EA, T2, Ubisoft etc. games in part because of the ABK games they purchase on the system?

Microsoft acts like 'market power' only matters if you are the majority; the point remains, them buying ABK would roll ABK's revenue streams into Xbox's, and by doing that, Xbox as a publisher would immediately supersede Bandai-Namco, Warner Bros, Capcom, Take-Two AND Sony in software revenue going by that exact same graph! It's funny how they don't mention that in their results 🤔
One other note I have with the graph is, by excluding f2p games, they are also by definition, excluding Warzone.

So Activision Blizz revenue here is understated.
 

SirTerry-T

Member
cr

cry somewhere else, games are recreational. get some papa peck tive.
I'm not crying , I just thought your little jab about lower incomes made you sound like someone whose world perspective begins and ends with video games.

This thread has got some great insights into the way these mega corporations work but it's also showing that some people take this video game malarky waaaay to seriously.
 

IFireflyl

Gold Member
I realized yesterday that I never actually voted on what I thought would happen. I just voted that I think it gets blocked, but I'm honestly 50/50 on blocked or going through with serious concessions. If it gets blocked it is only going to be due to the CMA (in my opinion). If they don't block it then Microsoft will have relatively smooth sailing through the rest of the regulators. The FTC arguments are pretty thin, and I think there is too much focus on Call of Duty when that isn't, to me at least, a primary concern with this acquisition.
 

feynoob

Gold Member
What? How?

Suppose I buy COD on PlayStation every year. And if MS publishes COD on PS, they get the following revenue from me every year.
  • Year 1 = $49 (70% of $70)
  • Year 2 = $49
  • Year 3 = $49
  • Year 4 = $49
  • Year 5 = $49
Total Xbox revenue on PS = $245

Now suppose I switch from PS to Xbox. This is what MS will get from me over the next 5 years:
  • Bought an Xbox = $499
  • Xbox Live Gold (5 years) = $600 ($120 per year) Correct me if I'm wrong with this.
  • Year 1 = $70
  • Year 2 = $70
  • Year 3 = $70
  • Year 4 = $70
  • Year 5 = $70
That's assuming I did not buy ANY first-party Xbox game, ANY third-party game on Xbox, or Game Pass -- which obviously won't be the case.

Total Revenue = $1,449.

Xbox Profit = $1,449 - $245 (lost revenue on PS) = $1,204.

Based on the number of surveyed people who said they will switch, CMA calculates that it will be more profitable for Xbox to remove COD from PlayStation, as their gained revenue on Xbox will be higher than the lost revenue on PS.
a dumb math take.

A: Your math is only applied to new users.
B: You are ignoring gamepass on xbox for these new users.
C: People buy both consoles.
D: Xbox is not everywhere, which means some of COD users wont be able to buy Xbox.
E: Users can simply go to PC instead of Xbox.

There are alot of things wrong that I cant name it.

Its better that I dont get in to these stupid debates. Continue guys.
 
I'm not crying , I just thought your little jab about lower incomes made you sound like someone whose world perspective begins and ends with video games.

This thread has got some great insights into the way these mega corporations work but it's also showing that some people take this video game malarky waaaay to seriously.
stop it with your little BS. literally talking about people hoping Microsoft buys more companies so they can add it to gamepass. That it’s already being mentioned they should go for SIE next, as if this ABK deal would lead directly to that. They are being cheap and foolish. Here you go with your cheesy “There’s kids starving in africa” nonsense.
 
Lower income shouldn't be used as ammunition in a playground worthy pissing contest between which plastic boxes' Daddy has got the biggest wallet.
There are people living in what were financially comfortable areas of the world queuing for fucking food banks to open.

Get some perspective.

If it's not about their income levels, then it's about their financial priorities. If people are vehemently championing for a service like Game Pass and want things like this acquisition to go through because it means cheaper games, maybe they should ask themselves why they might think gaming is such a right to where affordability of all of it to all is the most important thing.

There were always consoles and games I could not afford back in the day (when accounting for other necessities or maybe other hobbies), but I didn't consider it anti-consumer because I couldn't get them. And I didn't stay hoping my preferred console brand could acquire the developers of those games and make them available to me for free/very cheap just so I could play them. I'd wait for a sale, or rent them, or just not buy that game, or play a friend's copy if they had it.

There have always been options for people who can't afford to buy a game Day 1 at full price so Game Pass represents nothing new in that regard.

This math is wrong. Sony doesn't lose money when people buy an Xbox or when people buy a Gold subscription.

Not true. Someone buying an Xbox also represents someone who could in practice move their gaming purchasing habits to the Xbox ecosystem for 3P software (especially considering how prolific crossplay is now becoming), which translates to lost revenue for Sony.

One other note I have with the graph is, by excluding f2p games, they are also by definition, excluding Warzone.

So Activision Blizz revenue here is understated.

Good catch there. I think that went unnoticed by a lot, and Warzone revenue through MTX would be massive, even on console (though FWIW most of that is probably coming through mobile devices).
 

reinking

Gold Member
Doesn't matter, this thread isn't about the deal really, it's just a chance to spout some hate about the other team. In that sense, it'll never end.
If anyone is coming in here and not having fun, I would suggest they take it too seriously and should probably step away for their sanity. At the end of the day, we can laugh, cry, and shout but nothing we say here will influence the outcome. I choose to laugh because crying and shouting are no fun. Laughing, it's fun. Just ask the :messenger_tears_of_joy:-brigade. (love you all).
 
Last edited:
If the deal goes through what is the actual point of regulators? If you can't stop a trillion dollar corporation from purchasing the biggest publisher in the industry and the biggest acquisition in their history, then you might aswell not exist at all. Especially with Microsofts laughable concessions. Surely its not that easy to sway them is it? If it is I can see Microsoft getting another big publisher easily.
 
If the deal goes through what is the actual point of regulators? If you can't stop a trillion dollar corporation from purchasing the biggest publisher in the industry and the biggest acquisition in their history, then you might aswell not exist at all. Especially with Microsofts laughable concessions. Surely its not that easy to sway them is it? If it is I can see Microsoft getting another big publisher easily.
The point of regulators is to stop illegal dealings. Vertical mergers rarely cause concern unlike horizontal ones which is why most of the arguments against this deal are so weak. Just because this deal is big doesn't make it illegal and we continue to forget MS is in last place in gaming and this acquisition will not change the status quo. Besides what is wrong with Xbox getting a bigger portion of the market? There is nothing illegal about that.
 

sainraja

Member
Exactly. Timed deals who cares. But if MS wants to spend money on gaming, hey I'll take hoarding up games.
They can spend money on gaming without purchasing publishers or IP that has long been multi-platform and locking some out to be exclusive—you already have the option to play their games. This acquisition isn't bringing them to your favorite box. As for your favorite sub on your favorite box, MS can still bring those there, as they have with other third-party games. The only thing you lose out on is the "life-time" availability, which is true of any third-party game right now that is on either company's sub service.

And COD and Diablo are two franchises I like and pay money so it helps my situation (I dont care about any of Activision's other console, PC or King games). So if they are on GP in exchange for me subbing that's great for subbers like me. But for all the crybabies, the games are still available to buy on other platforms. No different than big legacy games like Bethesda games and Minecraft. All still there. Its just you pay regular price.
Heh, you are being a crybaby as well, since how you choose to game is tied to MS buying A&B and maybe other big publishers like them. 🤷‍♂️

Right now, PC gamers already get cheaper games than console gamers already. So this is no different. It's just that it's a console feature where they price is zero if someone is subbed. So for the jealous types, just ignore Xbox gamers playing on GP just like ignoring PC gamers getting games for 75% off Steam while full price on a console e-store.
People aren't complaining about gamers being able to play games on a subscription service. They are worried about MS abusing their financial strength to take away games from systems they are available on under Activision Blizzard as an independent publisher.
 
Last edited:

IFireflyl

Gold Member
a dumb math take.

A: Your math is only applied to new users.
B: You are ignoring gamepass on xbox for these new users.
C: People buy both consoles.
D: Xbox is not everywhere, which means some of COD users wont be able to buy Xbox.
E: Users can simply go to PC instead of Xbox.

There are alot of things wrong that I cant name it.

Its better that I dont get in to these stupid debates. Continue guys.

Correct me if I'm wrong on any of this:

A. That's correct.

B. Even if they only take Game Pass subscriptions into consideration, Microsoft is looking at $120 in revenue each year, plus 100% of the revenue from micro-transactions. That's still more than the $50/year plus 70% of the revenue from micro-transactions.

C. I don't think this is relevant. The CMA's survey asked how many people would switch from PlayStation to Xbox. I believe they also take into consideration who owns both consoles as I believe that was a question. I could be wrong on this point though.

D. This isn't relevant to the CMA since they only care about U.K. users, and the people in the U.K. can buy an Xbox.

E. Also not relevant as the survey asked who would switch from PlayStation to Xbox. As a PC gamer myself, I wouldn't have answered yes to that question knowing that all Xbox games are released on PC. If someone said they would switch to Xbox then they weren't, in all likelihood, a PC gamer.
 

CuNi

Member
If the deal goes through what is the actual point of regulators? If you can't stop a trillion dollar corporation from purchasing the biggest publisher in the industry and the biggest acquisition in their history, then you might aswell not exist at all. Especially with Microsofts laughable concessions. Surely its not that easy to sway them is it? If it is I can see Microsoft getting another big publisher easily.
Regulators are not here to prevent Million/Billion or even Trillion dollar purchases.
Regulators look at the market where the acquisition is happening and the impact of the acquisition and as logic follows, the more money is spent on an acquisition, the bigger the impact on the market is, which makes it appear as if regulators only care about big buyouts, but I assure you they also take smaller deals and see if they should be allowed.
That doesn't mean that there is a limit to how much one could spend on it.
Microsoft would be allowed to spend the earths cash 3x over if the impact would be negligible to the rest of the market.

For example, no regulatory body would care if Microsoft were to buy a small indie dev studio for 100 trillion dollars.
On the other hand, regulators would absolutely smash down any deal where MS would buy Sony and Nintendo for 2€ combined.
 

IFireflyl

Gold Member
Besides what is wrong with Xbox getting a bigger portion of the market? There is nothing illegal about that.

What is wrong with the second-largest tech company in the world buying up the largest third-party publisher in the world? Especially considering that that third-party publisher has over half the market share of the current market leader (Sony), and it has a larger market share than the second-place company (Nintendo).

Stop painting Microsoft as the victim, and stop pretending that acquisitions like this are good for any industry. No matter which industry this type of acquisition occurs in, it's terrible.
 

Three

Member
E. Also not relevant as the survey asked who would switch from PlayStation to Xbox. As a PC gamer myself, I wouldn't have answered yes to that question knowing that all Xbox games are released on PC. If someone said they would switch to Xbox then they weren't, in all likelihood, a PC gamer.
They asked Playstation COD players specifically if they would switch to Xbox so I'm not sure why PC is even being brought up here.
 

bitbydeath

Gold Member
The point of regulators is to stop illegal dealings. Vertical mergers rarely cause concern unlike horizontal ones which is why most of the arguments against this deal are so weak. Just because this deal is big doesn't make it illegal and we continue to forget MS is in last place in gaming and this acquisition will not change the status quo. Besides what is wrong with Xbox getting a bigger portion of the market? There is nothing illegal about that.
They’re in place to prevent monopolies, (even potential ones), which is the problem outlined by the CMA.
 
Last edited:

hlm666

Member
People seem to have alot of issues comprehending what someone not agreeing with them is saying in this thread, it's leading to alot of round in circle debates. Let me help out, this is actually what your all trying to say to each other in plain english (and what sony and ms are saying to each other in lawyer speak).



edit: oh shit, I should have made sure to say this is nsfw or in public or around kids.
 
Last edited:

feynoob

Gold Member
B. Even if they only take Game Pass subscriptions into consideration, Microsoft is looking at $120 in revenue each year, plus 100% of the revenue from micro-transactions. That's still more than the $50/year plus 70% of the revenue from micro-transactions.
MS will also lose users from PS who will not buy Xbox, which means they are losing money in the process, compared to leaving the game on PS.

CMA is relying on the idea that MS would benefit from exclusivity, however they need to also focus on the loss side.

If there are 10m PS users who play COD, and only 6m of those went to xbox, MS would lose 4m sales, as those users are not going to buy xbox.
 

DrFigs

Member
MS will also lose users from PS who will not buy Xbox, which means they are losing money in the process, compared to leaving the game on PS.

CMA is relying on the idea that MS would benefit from exclusivity, however they need to also focus on the loss side.

If there are 10m PS users who play COD, and only 6m of those went to xbox, MS would lose 4m sales, as those users are not going to buy xbox.
but clearly this is the issue with just using like financial gain / losses. MS might still be okay with this 4 million unit opportunity cost, if they only care about increasing their userbase. MS can just take the financial hit.
 
Last edited:

DopeyFish

Not bitter, just unsweetened
let's do some math estimation with a teeny little bit of guesstimation.

King.com revenue is approximately $2.7 billion. Blizzard Entertainment revenue is approximately $2 billion. Activision revenue is $7.5 billion

Call of Duty revenue on sales is approximately $2.1 billion in revenue per year (30 million sales x $70) and MTX approximately $700 million ($7.5 billion-$2.7b (king) - $2b (blizzard) - $2.1 billion (COD)). There is some variation here because we don't know how much the smaller titles that Activision publishes sell exactly, but it's largely irrelevant.

So let's assume PlayStation gets half of that. $1.05 billion in revenue for the retail sales and $350 million revenue of MTX, so $1.4 billion.

So PlayStation gets $210 million from royalty on sales and $105 million royalty from MTX. Doesn't even move their profit whole number down a single digit for the division btw.

So under the high switch scenario, 9% (to Xbox) and 16% (to PC) that would bring in 1,350,000 sales worth $94,500,000 and an additional 2,400,000 sales on PC roughly equivalent to $117,600,000. The DLC at roughly the same rate gets $87.5 million. So under a high switch scenario according to the CMA, that means in COD alone, Xbox would be losing $1.1 billion per year by only releasing on Xbox and PC just for Call of Duty in pure revenue. Take away the revenue that would go to Sony and it becomes $785 million of losses per year.

In order to recover that loss, every one of those switchers would need to buy the roughly equivalent of 3 full priced Xbox Game Studio games per year on top of Call of Duty every year just to earn the equivalent and that is BEYOND stupidly impossible. The attach rate per user per year is something like 1.8 per year and Game Pass is roughly 2 per year. Expecting an attach rate of roughly 28 (of purely Xbox studios titles) to recover lost revenue is absolutely nonsensical. Even in a dream scenario for MS where everyone subscribes to game pass to get COD and Xbox games, the switchers would need to buy 6-7 full priced third party games per year to make up the loss.

So the one fun thing is the only way to make it actually work for Xbox is by assuming that PlayStation actually has less of the Call of Duty split (roughly 25% of all COD sales, approximately 7.5 million units), which has the fun side effect of making Call of Duty a non-critical supply. So there's either no incentive or the title isn't critical to Sony, can't be both because the cost of replacement is too high.

Even if you account for everybody switching buying hardware (only Series X), that drops the requirements quite a bit so it becomes 2.5 games per year. And it's even higher than that because I accidentally included the 30% cut that steam would get into pure Xbox revenue. Oopsie. (it's just annoying trying to ratio it out) Even if you accounted for everyone of them buying a new controller every year because they smash it, the numbers still don't make any damn sense. I should also mention that I'm using the full retail price for this attach rate when in reality people buy a lot of games on sale. Or in a bargain bin. Meaning it's likely even higher than 4 games per year. PS4 just shattered records with an attach rate of over 15 (that's across 7+ years)... Imagine having to have a particular consumer that is doing nearly a third of that every year.

I do not see how anyone can look at the numbers and say "yeah, there's financial incentive here"

Remember, I'm assuming CMA's nonsensical numbers are real when in reality the polls said 3% (YouGov) and 3.6% (CMA number corrected) which means they'd need at least 6x the revenue from the switchers just to cover the loss and even under CMA's original scenario the amount required was astronomical. This means under the corrected numbers, Microsoft would need the switchers to buy somewhere between ~24 games per year just to break even on removing the games from PlayStation and that's insane to even think as a legitimate possibility... because Microsoft doesn't even make that many games in a year.

Anyone who thinks if even the CMAs rationale makes any sense must be hopped up on some serious drugs.
 
Last edited:

feynoob

Gold Member
but clearly this is the issue with just using like financial gain / losses. MS might still be okay with this 4 million unit opportunity cost, if they only care about increasing their userbase. MS can just take the financial hit.
MS is doing that already.
Gamepass is cannibalizing their 1st party sales. They also have day1 PC for their 1st party games.

From console sales to 1st sales, that is alot of financial hit.

Doing that to COD will incur more losses to them.

For example, modern warfare 2 managed to earn $1b in 10 days.

That number would be small if they do exclusive plus gamepass day1.

CMA scenario makes no sense for a game like COD. MS is going to shoot at their golden egg with those tactics.
 

gothmog

Gold Member
let's do some math estimation with a teeny little bit of guesstimation.

King.com revenue is approximately $2.7 billion. Blizzard Entertainment revenue is approximately $2 billion. Activision revenue is $7.5 billion

Call of Duty revenue on sales is approximately $2.1 billion in revenue per year (30 million sales x $70) and MTX approximately $700 million ($7.5 billion-$2.7b (king) - $2b (blizzard) - $2.1 billion (COD)). There is some variation here because we don't know how much the smaller titles that Activision publishes sell exactly, but it's largely irrelevant.

So let's assume PlayStation gets half of that. $1.05 billion in revenue for the retail sales and $350 million revenue of MTX, so $1.4 billion.

So PlayStation gets $210 million from royalty on sales and $105 million royalty from MTX. Doesn't even move their profit whole number down a single digit for the division btw.

So under the high switch scenario, 9% (to Xbox) and 6% (to PC) that would bring in 1,350,000 sales worth $94,500,000 and an additional 900,000 sales on PC roughly equivalent to $44,100,000. The DLC at roughly the same rate gets $46.2 million. So under a high switch scenario according to the CMA, that means in COD alone, Xbox would be losing $946,400,000 per year by only releasing on Xbox and PC just for Call of Duty.

In order to recover that loss, every one of those switchers would need to buy the roughly equivalent of 6 full priced Xbox Game Studio games per year on top of Call of Duty every year just to earn the equivalent and that is BEYOND stupidly impossible. The attach rate per user per year is something like 1.8 per year and Game Pass is roughly 2 per year. Expecting an attach rate of roughly 50 (of purely Xbox studios titles) to recover lost revenue is absolutely nonsensical. Even in a dream scenario for MS where everyone subscribes to game pass to get COD and Xbox games, the switchers would need to buy 11-12 games per year to make up the loss.

So the one fun thing is the only way to make it actually work for Xbox is by assuming that PlayStation actually has less of the Call of Duty split (roughly 12% of all COD sales, approximately 3.5 million units), which has the fun side effect of making Call of Duty a non-critical supply. So there's either no incentive or the title isn't critical to Sony, can't be both because the cost of replacement is too high.

Even if you account for everybody switching buying hardware (only Series X, and including the PC switchers as XSX hardware buyers to inflate it), that drops the requirements by only 1.5 games per year to replace those sales. So 9.5-10.5 games per year lol. And it's even higher than that because I accidentally included the 30% cut that steam would get into pure Xbox revenue. Oopsie. Even if you accounted for everyone of them buying a new controller every year because they smash it, the numbers still don't make any damn sense. I should also mention that I'm using the full retail price for this attach rate when in reality people buy a lot of games on sale. Or in a bargain bin. Meaning it's likely even higher than 12 games per year. PS4 just shattered records with an attach rate of over 15... Imagine having to have a particular consumer that did the equivalent of that every year.

I do not see how anyone can look at the numbers and say "yeah, there's financial incentive here"

Remember, I'm assuming CMA's nonsensical numbers are real when in reality the polls said 3% (YouGov) and 3.6% (CMA number corrected)

Anyone who thinks if even the CMAs rationale makes any sense must be hopped up on some serious drugs.
Microsoft does not need people buying multiple games a year if they're spending all of their time on Xbox. This play is about driving people to use Xbox as their daily driver. Once they do that you take your cuts of all kinds of service revenue. It adds up quick and success tends to drive success, especially when you need to scale up your customer bass in order to make things like GamePass more profitable.
 
What is wrong with the second-largest tech company in the world buying up the largest third-party publisher in the world? Especially considering that that third-party publisher has over half the market share of the current market leader (Sony), and it has a larger market share than the second-place company (Nintendo).

Stop painting Microsoft as the victim, and stop pretending that acquisitions like this are good for any industry. No matter which industry this type of acquisition occurs in, it's terrible.
comments like these are hilarious, because they paint Sony and Nintendo as the victim.
 
Last edited:

DopeyFish

Not bitter, just unsweetened
Microsoft does not need people buying multiple games a year if they're spending all of their time on Xbox. This play is about driving people to use Xbox as their daily driver. Once they do that you take your cuts of all kinds of service revenue. It adds up quick and success tends to drive success, especially when you need to scale up your customer bass in order to make things like GamePass more profitable.

I just did that math and showed it's impossible to make back that revenue. The only logical thing to do is increase the prominence of Game Pass while at the same time still using PlayStation to stop the bleeding. You can't forget that the budget of Call of Duty is scaled according to the revenue so in order to make the scenario to work, they'd have to make it at a much much lower budget all across the board which would suicide the franchise.

Can't forget that Game Pass itself cannibalizes sales so they'd not only be losing on PlayStation revenue but also a large chunk of Xbox and PC revenue too. Imagine just deleting 60-75% of your revenue in one shot.

Sure, after 10 years there's a chance that Microsoft would have the subscriber count required to be able to drop PlayStation, but it's not feasible in the short term and it's not guaranteed to happen for the long term. If it jumps up to 60 million subscribers or so, then it becomes a legitimate possibility.

Theoretically they need approximately 40 million game pass subscribers just to replace the revenue for Activision and Blizzard as a whole (based on last year revenue).... that would be in addition to the already existing 25 million. Just to replace all Call of Duty sales? 17.5 million.
 
Last edited:

Heisenberg007

Gold Journalism
Again. 1 million people switching does not equal the 20 million you left behind.

Those 1 million would literally have to buy 20 games a year to make up for the lost revenue.

This isn't hard to understand.

Bring console cost into it is nonsensical as they lose money on every Xbox sold.
And where is that 1 million coming from? 1 out of 20 million amounts to 5%.

According to the CMA, 24% COD gamers would switch from PS to Xbox.

BthS2vZ.jpg


So that 5% becomes 24%. This means 1 out of 4 COD gamers shifts from PS to Xbox.

  • The person switching to Xbox contributes $1,450 in revenue to Microsoft (even if we ignore the 100% MTX and DLC sales and we assume that they don't buy any first- or third-party game on Xbox).
  • On the other hand, the lost COD sales revenue on PlayStation for 1 gamer was $245, which means the total lost software sales revenue would be $245 x 3 = $735.

So even in its most simplistic form, Xbox's revenue is increased by roughly 100% (from $735 to $1,450) in case 24% of COD gamers switch from PlayStation to Xbox.

Any first-party games, third-party games, or Game Pass subscriptions they buy on Xbox in the next 5 years will just increase this revenue for Xbox.
 
Last edited:

DopeyFish

Not bitter, just unsweetened
And where is that 1 million coming from? 1 out of 20 million amounts to 5%.

According to the CMA, 24% COD gamers would switch from PS to Xbox.

BthS2vZ.jpg


So that 5% becomes 24%. This means 1 out of 4 COD gamers shifts from PS to Xbox.

  • The person switching to Xbox contributes $1,450 in revenue to Microsoft (even if we ignore the 100% MTX and DLC sales and we assume that they don't buy any first- or third-party game on Xbox).
  • On the other hand, the lost COD sales revenue on PlayStation for 1 gamer was $245, which means the total lost software sales revenue would be $245 x 3 = $735.

So even in its most simplistic form, Xbox's revenue is increased by roughly 100% (from $735 to $1,450) in case 24% of COD gamers switch from PlayStation to Xbox.

Any first-party games, third-party games, or Game Pass subscriptions they buy on Xbox in the next 5 years will just increase this revenue for Xbox.

oh damn it was 24% damnit i need to fix my post above, but still the numbers will still be absolutely nonsensical considering what I already wrote.

edit: i accidentally miscalculated the loss for Xbox, it was actually higher even after accounting for the newly added PC sales lmao
 
Last edited:

BeardGawd

Banned
And where is that 1 million coming from? 1 out of 20 million amounts to 5%.

According to the CMA, 24% COD gamers would switch from PS to Xbox.

BthS2vZ.jpg


So that 5% becomes 24%. This means 1 out of 4 COD gamers shifts from PS to Xbox.

  • The person switching to Xbox contributes $1,450 in revenue to Microsoft (even if we ignore the 100% MTX and DLC sales and we assume that they don't buy any first- or third-party game on Xbox).
  • On the other hand, the lost COD sales revenue on PlayStation for 1 gamer was $245, which means the total lost software sales revenue would be $245 x 3 = $735.

So even in its most simplistic form, Xbox's revenue is increased by roughly 100% (from $735 to $1,450) in case 24% of COD gamers switch from PlayStation to Xbox.

Any first-party games, third-party games, or Game Pass subscriptions they buy on Xbox in the next 5 years will just increase this revenue for Xbox.
I just used numbers that were easy. Why are you adding a 500 Xbox console to your total when MS loses money on console hardware? That's not a positive for them.

The CMA percentage only asked if they would switch platforms. They didn't ask if that platform would be Xbox or PC. So your nunbers still wouldn't add up.

At the end of the day the CMA's existing calculations when adjusted to account for the 5 years of lost PS revenue shows there's no incentive.

No point of arguing what should or shouldn't be included. I'm just going by what the CMA is already using.
 
Last edited:
If it's not about their income levels, then it's about their financial priorities. If people are vehemently championing for a service like Game Pass and want things like this acquisition to go through because it means cheaper games, maybe they should ask themselves why they might think gaming is such a right to where affordability of all of it to all is the most important thing.
There were always consoles and games I could not afford back in the day (when accounting for other necessities or maybe other hobbies), but I didn't consider it anti-consumer because I couldn't get them. And I didn't stay hoping my preferred console brand could acquire the developers of those games and make them available to me for free/very cheap just so I could play them. I'd wait for a sale, or rent them, or just not buy that game, or play a friend's copy if they had it.

There have always been options for people who can't afford to buy a game Day 1 at full price so Game Pass represents nothing new in that regard.
It's rare to see this level of devotion to a brand. You can frame it any way you want, but you're not going to be able to successfully argue this. People that are for this acquisition because it may result in lower costs to access certain games are doing exactly what they should be doing. You attempting to belittle or advise them on the merits of spending more money and higher costs is unwarranted. Excluding outside factors, if the exact same product costs significantly more on platform A vs platform B. The logical explanation would suggest not that those choosing platform B should reevaluate their spending priorities or income so as to buy on platform A. Instead, it suggests that perhaps those who choose platform A are the ones who should be evaluating their spending habits, as they're the ones engaging in poor practices of it. A fool and his money are soon parted.

MS will also lose users from PS who will not buy Xbox, which means they are losing money in the process, compared to leaving the game on PS.

CMA is relying on the idea that MS would benefit from exclusivity, however they need to also focus on the loss side.

If there are 10m PS users who play COD, and only 6m of those went to xbox, MS would lose 4m sales, as those users are not going to buy xbox.
Good example. I think this is the point that some here aren't getting. They're simply comparing the 100% vs 70-30% split, and that's it. Those who simply aren't considering the loss aspect, are likely just performing the math, and as soon as they see a number that agrees with their opinion, are running with it from there. Instead of following through with the rest of the equation.
 

Three

Member
So PlayStation gets $210 million from royalty on sales and $105 million royalty from MTX. Doesn't even move their profit whole number down a single digit for the division btw.
You can't look at the loss as a percentage of total revenue from the division . CoD is a sizeable chunk of their profits. The revenue the division makes isn't purely profit like the COD money is, a lot of the revenue ends up as a loss on hardware to make a profit on selling games like COD, and others like network services rely heavily on games like CoD too.

You can't just look at the lost CoD sales in a vacuum to determine Sony's loss from CoD exclusivity. We're not even including those lost customers who will no longer buy other games either.

So under the high switch scenario, 9% (to Xbox) and 6% (to PC) that would bring in 1,350,000 sales worth $94,500,000 and an additional 900,000 sales on PC roughly equivalent to $44,100,000. The DLC at roughly the same rate gets $46.2 million.
This calculation doesn't seem to make sense.
 

Heisenberg007

Gold Journalism
I just used numbers that were easy. Why are you adding a 500 Xbox console to your total when MS loses money on console hardware? That's not a positive for them.
We can remove the console, and it'll still be $950 (new revenue) vs. $735 (lost revenue). It'll still be a profit of more than $200 per user for Xbox if they make COD exclusive.
The CMA percentage only asked if they would switch platforms. They didn't ask if that platform would be Xbox or PC. So your nunbers still wouldn't add up.
That is true. But it'd be odd to assume that a person who bought a $500 PS5 would now buy a $2,000 PC to play COD. It's more likely that they would replace a $500 PS5 with a $500 XSX to play Call of Duty. They were a console gamer; it's more likely that they'll continue to be a console gamer.
At the end of the day the CMA's existing calculations when adjusted to account for the 5 years of lost PS revenue shows there's no incentive.

No point of arguing what should or shouldn't be included. I'm just going by what the CMA is already using.
This is not true. The CMA, based on its calculations and estimates, does believe that it is profitable for Xbox to make COD exclusive and that there is a financial incentive to do so.

TratTsD.jpg
 
Last edited:

DrFigs

Member
MS is doing that already.
Gamepass is cannibalizing their 1st party sales. They also have day1 PC for their 1st party games.

From console sales to 1st sales, that is alot of financial hit.

Doing that to COD will incur more losses to them.

For example, modern warfare 2 managed to earn $1b in 10 days.

That number would be small if they do exclusive plus gamepass day1.

CMA scenario makes no sense for a game like COD. MS is going to shoot at their golden egg with those tactics.
Yeah I don't want to make a very strong statement against the CMA since I don't really know what model they're using. But yes, if I'm understanding it right, a simple econ gain/loss framework probably isn't very helpful for determining if MS has an incentive to keep games off playstation. But then it's even weirder if they made a simple math mistake. I'm really hoping that's not the case.
 
If there are 10m PS users who play COD, and only 6m of those went to xbox, MS would lose 4m sales, as those users are not going to buy xbox.
MS doesn’t give a fuck about sales tho. All they care about is market share.

plus 10m PS sales would equal 7m Xbox sales. Since they lose 30% per PS copy. Seeing that they can drop 70 billion. $60m lost, is a drop in the bucket. Those 6m extra console sales would also equate to more purchases in the xbox ecosystem. But considering Sony is Coca-Cola to MS PepsiCo, 10m lost in soda sales when sodas represent all their profits, is devastating.

But fuck it have PepsiCo buy McDonalds because Coca-Cola is the soda leader, so they can have the same market share.
 
You can't look at the loss as a percentage of total revenue from the division . CoD is a sizeable chunk of their profits. The revenue the division makes isn't purely profit like the COD money is, a lot of the revenue ends up as a loss on hardware to make a profit on selling games like COD, and others like network services rely heavily on games like CoD too.

You can't just look at the lost CoD sales in a vacuum to determine Sony's loss from CoD exclusivity. We're not even including those lost customers who will no longer buy other games either.
I think you're way beyond the scope of what he was trying to say. The point is trying to determine whether or not it's profitable for MS to take COD off of PS. So vacuum or not, why are you trying to determine Sony's loss?
 
Status
Not open for further replies.
Top Bottom