#185: Round the campfire

Microsoft bigwigs were in Brussels yesterday, attending a closed hearing at the European Commission to address the EU regulator’s concerns over Acquisition Blizzard. Representatives from Sony were also in attendance, along with Google, Nvidia, Activision itself, and assorted “interested parties and games experts,” as GI.biz puts it. Weird. Hit Points must have missed the invite. I really should check my spam folder more often.

A private hearing is no good for a company on a PR charm offensive, of course, which is why Microsoft flew a handful of media to Brussels for the day — this is most odd, let me just check my notification settings a moment — for a post-hearing press conference. Now I would not, personally, think of the nucleus of EU power as an appropriate venue for a splashy, E3-style announcement. But then I am not Microsoft president Brad Smith, who used the occasion to announce the signing of a ten-year deal to put “Xbox PC games” on Nvidia’s cloud-streaming subscription service, GeForce Now. Nvidia has dropped its opposition to the acquisition as a result, and now supports it. Funny what a big cheque can do, isn’t it. It follows the earlier announcement of a decade-long agreement with Nintendo to put Call Of Duty on Switch.

This is all fairly canny business from Microsoft, I must admit, as well as good PR. The GeForce deal in theory allays the regulators’ fear that the acquisition would foreclose rivals in the nascent cloud-gaming market. The Nintendo agreement reinforces the happy-clappy, we’re-all-in-this-together, kumbaya wealth-sharing vibe that Microsoft has been giving off since the moment the regulators started sniffing around. And of course each new concession leaves Sony progressively more isolated, making it easier for Microsoft to portray its rival as selfishly guarding its market dominance, putting its own corporate interests ahead of those of its consumers. It appears to put Sony in an increasingly difficult position: either back down, take the ten-year COD deal on the table and let the buyout go through, or risk the regulators siding with Microsoft, and one of the biggest games on the planet being taken off PlayStation for good.

I do not think things are quite that cut and dried just yet, however. Microsoft has not entirely succeeded in framing itself as a kindly benefactor, buying Activision Blizzard not to line its coffers but for the betterment of the global game industry. Smith’s tweet announcing the Switch deal hailed “a binding 10-year contract to bring Xbox games to Nintendo’s gamers”, but the official statement only mentions Call Of Duty. That is a suspiciously delicate choice of words. (Similarly, the only games named in the press release about the Nvidia deal are Minecraft and COD). Questions remain over price, feature and release date parity between Xbox and other platforms. And at the press conference Smith trumpeted the 150m Nintendo and Nvidia customers who would benefit from the acquisition, while a pie chart behind him airbrushed Nintendo out of existence to exaggerate PlayStation’s market share. If only Hit Points had been in the room to ask about all that.

My big question, though, is… is this really still worth it? When Microsoft was working out how much to offer for control of Activision Blizzard, I highly doubt its calculations included keeping Call Of Duty on PlayStation and Steam for ten years, and restoring it to Nintendo platforms after a decade-long absence. I find it hard to believe Microsoft figured it would end up giving a leg-up to one of its biggest rivals in cloud gaming and subscriptions (apparently GeForce Now has 25 million users, which isn’t far off Game Pass). Sure, the narrative being pushed by Smith and his colleagues frames the deal as being all about bringing Activision’s games to more people. Microsoft is trying to grow the whole pie. But surely it figured $70bn would net it a substantially bigger slice of it than this.

Still, for Microsoft, the deal going through with concessions — which pundits who are far more knowledgeable about these things continue to believe is the likely outcome — is no doubt preferable to the alternative. Yes, $68.7bn is an awful lot of money to you, and I, and just about everyone else on the planet with a brain, a soul and some debt. But Microsoft’s market cap is $1.88 trillion. If the deal being blocked were to cause its share price to fall by just 1%, it would wipe almost $19bn off the value of the company — and its stock has fallen by over 16% since the chilly day in January 2022 when it announced its intent to buy Activision. In that context, I suppose a win is a win, whatever you have to give up along the way, because a loss would be simply disastrous.

MAILBAG!

Lots of discussion around last week’s free edition, which looked at the troubling phenomenon of players spoofing their location to take advantage of lower game prices.

• “If I’m buying a game, I will only buy it at full price,” says Daniel in the comments. “Because if I’m not willing to do that, do I really want it? I have too many great games to play already. Doing the VPN thing feels like it feeds the rush of purchasing, and is not so much about the game itself… I normally wouldn’t care what other people do, but that does bum me out.”
• “We have been trained to expect a discount through much of videogames’ short history,” says Callum. “Whether it was a ‘three games for a fiver’ deal in your late 2000s GameStation, or the more recent ‘wait a month and it’ll drop in price’, a game’s RRP has only felt relevant for the early adopter, and even then there are workarounds.”
• Just1MoreTry takes a slightly different tack in the chummy Hit Points Discord. “Working in software development, I see how most work is done by hiring Indian or other ‘cheap’ labour, and because it’s digital work, location doesn’t matter. If big corporations can shop in a global market, why can’t the consumer?” Yes, yes, fair point. Do support indies if you can, though.

MORE!

• If the above somehow isn’t enough Activision chat for one day — just think, one day this will all be over — I greatly enjoyed this take from GI’s Chris Dring, who was in the room yesterday for Microsoft’s presser. “Activision is turning this circus into one that’s run by a bunch of six-year-olds high on sugar,” he writes, referencing the increasingly Muskian CCO Lulu Cheng Meservey’s latest spot of Twitter banter. True, true, though I’d probably take the six-year-olds over Kotick staying in post.
• Rovio is delisting Rovio Classics: Angry Birds, a rebadged version of the game that made its name, from Google Play this week. If the replies to the announcement are any guide, the problem was that the paid-for, microtransaction-free game was harming spend across the rest of Rovio’s free-to-play software catalogue, which is rather more aggressively monetised. Deary me, what a sad indictment of the state of things.
• PlayStation has announced a State Of Play broadcast for this Thursday (UK) evening, my excitement for which is only slightly diminished by the promise of a deep dive into Rocksteady’s Suicide Squad. See you in the Discord, perhaps.
• Bungie has been awarded $4.3m in damages after prevailing in its lawsuit against Destiny 2 cheatmaker AimJunkies.
• Elden Ring has sold 20m copies worldwide, which is nice.
• Microsoft has increased the price of Xbox Series consoles in Sweden, which is not.
• Activision apparently neglected to inform staff of a December phishing attack that compromised employee information. The publisher said in a statement that “no sensitive employee data, game code or player data was accessed”; TechCrunch, which has seen the stolen data, disagrees, saying it contains names, telephone numbers, email addresses and in some cases the offices where specific staff work. I’m sure Lulu Cheng Meservey will be along with a dumb meme about all this in due course.
• I enjoyed this piece about videogame clothing design by Sumo concept artist Shania Hall. Poring over 1970s magazines for fashion tips sounds like a great time.

That will do! Paid subs, I’ll see you again on Friday, all being well. If the rest of you would like to join us you may do so, for the humble sum of £4 a month, by hitting the button below. Ta-ta!