Saying Microsoft’s (Nasdaq: MSFT) $68.7 billion acquisition of Activision Blizzard (Nasdaq: ATVI) is facing hurdles would be an understatement. At least two active lawsuits are trying to prevent the merger from happening, citing competition concerns.
First stop: the Federal Trade Commission (FTC) on Thursday filed an antitrust case against Microsoft, claiming the deal is an “illegal acquisition.” The commissioners, in a 3-1 vote, decided to pursue the agency’s administrative case after reports that the agency was investigating the deal. The case will be heard by the FTC’s own administrative law judge.
“With control of Activision’s content, Microsoft would have the ability and increased incentive to withhold or degrade Activision’s content in ways that substantially lessen competition,” the FTC complaint read.
The tech giant immediately responded to the complaint, reiterating the pledge it made that it won’t make Activision’s games exclusive to Microsoft’s Xbox, unlike some of its current titles under its belt.
“[Microsoft’s] vision for the transaction is simple: Xbox wants to grow its presence in mobile gaming, and three quarters of Activision’s gamers and more than a third of its revenues come from mobile offerings,” the company said in its filed response. “Xbox also believes it is good business to make Activision’s limited portfolio of popular games more accessible to consumers, by putting them on more platforms and making them more affordable.”
Activision publishes both console and mobile games with Call of Duty, World of Warcraft, and Candy Crush being some of its most popular titles.
The FTC asserted in its complaint that Microsoft is “one of only two manufacturers of high-performance video game consoles” with Xbox. The gaming unit has its own “first-party” titles and video game subscription service Xbox Game Pass, both of which contributed to cultivating an exclusive gaming environment within its assets.
“Microsoft has acquired over ten third-party studios and their titles in recent years to expand its offerings. Microsoft has frequently made those acquired titles exclusive to its own consoles and/or subscription services, eliminating the opportunity for consumers to play those titles on rival products or services,” the commission explained.
On the other hand, Activision is said to be a creator and publisher of high-quality video games for video game consoles, personal computers, and mobile devices, with most of its titles referred to as “AAA” in the industry. Because of the creative talent, money, and time necessary for development, AAA games are expensive to make.
“Activision and industry participants recognize Call of Duty as Activision’s ‘key product franchise’,” the FTC said, adding that “from its launch in 2003 up through 2020, it generated $27 billion in revenues”–making it “one of the most successful console-game franchises ever.”
In response, Microsoft prefaced it by saying “this case involves a transaction between the third-place manufacturer of gaming consoles and one of many publishers of popular video games.”
“Xbox started behind Nintendo and Sony when it began making consoles 20 years ago, and it remains in third place today. Xbox also has next to no presence in mobile gaming, the fastest-growing segment of gaming and the place where 94% of gamers spend their time today,” Microsoft replied.
In essence, the firm explained that it is “good business” to offer Activision’s titles to a broader selection of gaming platforms, not by making it exclusive to one.
“A substantial portion of Activision’s financial value to Xbox comes from business as usual, including the continued sale of Call of Duty—its most popular game—on Sony’s PlayStation. Paying $68.7 billion for Activision makes no financial sense if that revenue stream goes away,” the firm further explained.
Microsoft also added that should it make Call of Duty exclusive, the “reputational hit to Xbox would not be worth any theoretical economic benefit from taking Call of Duty away from competitors.”
As it has maintained, the firm promised to keep Call of Duty on PlayStation “from the moment this deal was announced.” Xbox’s proposal to its competitor extends the offering for “ten years—an unheard-of length for contracts in the gaming industry.”
“Xbox has made this same offer to other competitors, and at least one (Nintendo) has accepted to date. Sony refuses to deal,” the firm said, highlighting that “the fact that Xbox’s dominant competitor has thus far refused to accept Xbox’s proposal does not justify blocking a transaction that will benefit consumers.”
“The acquisition of a single game by the third-place console manufacturer cannot upend a highly competitive industry,” Microsoft summed.
In outlining its complaint, the FTC cited Microsoft’s past acquisition deal to buy ZeniMax Media in March 2021. ZeniMax Media is the parent company of game developer and publisher Bethesda Softworks.
The commission noted that while Microsoft pledged that it “would not have the incentive to withhold ZeniMax titles from rival consoles” during the antitrust review by the European Commission (EC), the firm still made three of the newly-acquired games exclusive to its platform–Starfield, Redfall, and Elder Scrolls VI.
“Although previous titles in ZeniMax’s [redacted] franchise were released on PlayStation, Microsoft has confirmed that the upcoming [redacted] will be available only on Xbox consoles, Windows PCs, and Xbox Game Pass subscription services,” the commission added.
The FTC also noted that Microsoft then announced “Starfield and Redfall, two of the highly anticipated new titles under development at the time of Microsoft’s acquisition of ZeniMax, will be Xbox platform and Xbox Game Pass exclusives when they are released.”
“Microsoft’s past behavior should also cast more suspicion on its non-binding public commitments to keep Call of Duty available on PlayStation consoles through the end of Activision’s existing agreement with Sony,” said the commission.
But for Microsoft, the ZeniMax transaction “has no relevance to the current transaction.” The firm further asserted that ZeniMax’s first two new titles were made exclusive to PlayStation for a year after the purchase completed.
In explaining why it made ZeniMax’s three future titles exclusive to Xbox and PCs, Microsoft explained that these were all “designed to be played primarily alone or in small groups.” However, it touted that it continued to release new updates of existing ZeniMax games such as Fallout 76 and Elder Scrolls Online on both Xbox and PlayStation, “because these games are designed to be played together by broad communities of gamers on different platforms,” adding that the latter set of games should be considered the ones that are more analogous to the Call of Duty game.
“Any suggestion that Microsoft’s statements to the European Commission about ZeniMax were misleading is incorrect. Microsoft explicitly said it would honor Sony’s existing exclusivity rights and approach exclusivity for future game titles on a case-by-case basis, which is exactly what it has done,” the firm reiterated.
The EC also agrees it was not misled, saying Microsoft did not make any “commitments” nor did the commission “rely on any statements made by Microsoft about the future distribution strategy concerning ZeniMax’s games” when it made the decision to approve the acquisition.
The FTC is suing the acquisition deal for the violation of Section 5 of the Federal Trade Commission Act and Section 7 of the Clayton Act, asking the court to prohibit “any transaction between Microsoft and Activision that combines their businesses.”
If the combination ensues, the FTC asked the court to order the merging firms to divest and reconstitute “all associated and necessary assets” in a way that they will function as two or more distinct and separate businesses. The commission also requests that the firms will not “acquire, merge with, consolidate, or combine their businesses with any other company engaged in business activity in the relevant markets” for a period of time following the acquisition.
For its part, Microsoft said that the commission “cannot provide clear proof that the combination of Microsoft’s gaming business and Activision’s business would restrain trade” in the relevant markets.
“The combination of Microsoft’s gaming business with Activision’s business will be procompetitive. The transaction will result in substantial acquisition-specific efficiencies, synergies, and other procompetitive effects that will directly benefit consumers,” the firm summed up.
Activision stated in its own response to the FTC’s lawsuit that “taking Call of Duty exclusive would be disastrous for Xbox.”
“If Xbox withheld Call of Duty from Sony’s PlayStation or other platforms that compete with Xbox, Xbox would immediately forgo billions of dollars in lost game sales and cleave off a massive portion of the garners that Activision has worked so hard to attract and retain,” the game publisher said.
The company added that it is “facially absurd and contradicted by the plain facts” for the FTC to assume “that a gaming platform cannot succeed without Call of Duty.”
Outside of the United States, Brazil approved the deal, while the United Kingdom is reviewing it.
The FTC suit follows a legal battle put forth by a group of video gamers, suing Microsoft to also stop the pending Activision acquisition for potential stifling of the competition.
The case was filed late Tuesday in a federal court in San Francisco on behalf of ten individual gamers who enjoy Activision Blizzard’s Call of Duty franchise as well as other popular titles like World of Warcraft, Overwatch, and Diablo.
According to the lawsuit, the proposed acquisition would give Microsoft “far-outsized market power in the video game industry,” with the capacity to “foreclose rivals, limit output, reduce consumer choice, raise prices, and further inhibit competition.”
Several of the plaintiffs in the private antitrust complaint stated that they play Activision Blizzard games on Sony’s PlayStation, Microsoft’s primary rival. Others stated that they play them on their laptops, Xbox, or Nintendo’s Switch.
As it had previously stated, Microsoft responded to the suit, saying that the merger “will expand competition and create more opportunities for gamers and game developers as we seek to bring more games to more people.”
It was back in January 2022 that Microsoft announced the plan to acquire Activision at US$95 per share.
Microsoft last traded at US$238.73 while Activision last traded at US$75.95 on the Nasdaq.
Information for this briefing was found via BBC, CNBC, and the sources mentioned. The author has no affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
New HomePod Reviews Offer Hands-On Look at Sound Quality, Siri, and More
Apple’s second-generation HomePod will start arriving to customers and launch in stores this Friday. Ahead of time, the first reviews of the smart speaker have been shared by select media publications and YouTube channels.
Priced at $299, the new HomePod features a virtually identical design as the full-size HomePod that Apple discontinued in March 2021, but with two fewer tweeters and microphones. The Siri-powered speaker is also equipped with a four-inch high-excursion woofer, an S7 chip for computational audio, and a U1 chip for handing off music from an iPhone. The speaker supports Matter for smart home accessories and Spatial Audio with Dolby Atmos.
A new sensor in the HomePod can measure temperature and humidity in indoor environments, and this feature was also enabled on the existing HomePod mini with a recent software update. Sound Recognition will also be coming to the new HomePod with a software update this spring, allowing the speaker to listen for smoke and carbon monoxide alarms and send a notification to the user’s iPhone if a sound is identified.
The new HomePod can be pre-ordered on Apple’s online store, with white and midnight color options available. In-store availability and deliveries to customers will begin Friday, February 3 in the United States, Australia, Canada, China, France, Germany, Italy, Japan, Spain, the UK, and 11 other countries and regions.
The Verge‘s Chris Welch said sound quality is very similar to the original HomePod:
After several days of listening to the new HomePod (both solo and in a stereo pair), I still think its sound signature remains true to the original HomePod. If you were a fan of that speaker, you’ll be satisfied with the second-gen version. Sure, you can hear subtle differences in how music is rendered when comparing both generations side by side with the same track. The newer HomePod might bring out a guitar solo with slightly more emphasis than the original. But the central traits are the same.
The Wall Street Journal‘s Nicole Nguyen also said the new HomePod sounds the same as the original:
The updated HomePod looks a lot like its discontinued predecessor—and sounds similar, too. I tested the new HomePod, as a single unit and grouped as a stereo pair, in a room that’s roughly 370 square feet. For most tracks, keeping the volume at 30% was enough to fill the space.
If you look at spec sheets comparing the old and new HomePods, you might scratch your head. The new one has a fast processor but fewer built-in microphones and speakers, and supports an older Wi-Fi standard. But in person, the new HomePod sounds and performs the same as the original.
Pocket-lint‘s Britta O’Boyle was impressed with the new HomePod’s sound quality too:
In terms of hardware, there are five tweeters, a “high-excursion woofer” capable of moving an impressive 20mm, and a four-microphone array. It’s a slightly different setup to the original HomePod – that had seven tweeters for starters – but the performance is equally excellent. Make no mistake, the HomePod (2nd generation) sounds fantastic.
In the midrange, you get vocals that are detailed, crisp and crystal clear, while at the lower end, the HomePod packs in plenty of bass. It’s lovely and deep for its size, while still offering expression and punch. It’s not as bassy as the Sonos Five – which is a bigger and more expensive speaker – and HomePod is arguably a little more muddled in the mid-range when playing tracks like Skrillex’s Rumble compared to the Five, but it is still very impressive overall – and that is a pretty tricky track to keep up with anyway. You can reduce the bass in the Home app, though we didn’t find this necessary.
Engadget‘s Billy Steele said that while Siri had several shortcomings when the original HomePod was released in 2018, the voice assistant has improved over the years. He also said the new HomePod’s two fewer microphones compared to the original did not impact Siri’s ability to detect his voice — even in a noisy room:
When we reviewed the original HomePod in 2018, one of our biggest gripes was with Siri’s limited abilities. Sure the speaker sounded good, but the lack of polish with the voice assistant made it seem like a work in progress. Apple has done a lot to improve Siri over the last five years, so a lot of those issues with the original have been fixed.
First, the HomePod, like Siri on your iPhone, is capable of recognizing multiple users. Personal Requests can allow it to peek at your Calendar, Notes, Reminders, Messages, Find My and more when you ask. Plus, HomePod can give each member of your family (up to six people) their unique responses from certain iPhone apps. What’s more, Siri can create recurring home automations without you having to pick up your phone and swipe over to the appropriate app.
Even with fewer microphones to pick up your voice, the new HomePod doesn’t suffer any performance setbacks. It’s just as capable as ever at picking out your voice even in a noisy room.
MobileSyrup‘s Dean Daley was impressed with Spatial Audio on the new HomePod:
A fantastic song to test out spatial audio is also one of my favourite tracks for karaoke, “Bohemian Rhapsody” by Queen. It sounds decent at first, but after the “I see a little silhouette of a man” section of the song, the 2nd-Gen HomePod takes it to a whole other level, perfectly utilizing Dolby Atmos’ surround sound and spatial audio with harmonies and melodies to create an epic concert in the entertainment space. This was definitely my favourite song I tested out, and one I showed to several friends.
TheStreet‘s Jacob Krol touched on the new HomePod’s larger backlit touch surface:
The most significant design change lives up top and involves the screen. While there isn’t really new information being shown and the dream of a HomePod with a true display contains to be just that a dream, the top surface is larger. It gives one more control with tapping to play or pause among other controls and it can glow brighter, and larger in different colors.
Rather than having the volume controls appear after a touch like on the original HomePod, the “+” and “-” are now etched into this backlit touch surface which makes it easier to adjust the volume at a moment’s notice. When playing back music, the HomePod’s top will glow in colors that resemble the album artwork of what you’re listening to and when communicating with Siri it will glow with all of the colors you’d expect.
TechCrunch‘s Brian Heater tested audio handoff on the new HomePod:
Start a song with Apple Music on your iPhone, hold it near the HomePod and it will start playing there, accompanied by a satisfying haptic fist bump. Move the phone near the speaker again and you can transfer it back. I really like this feature. It’s a good example of how nicely hardware can play together if you make your own devices, software and chips. It’s also surprisingly receptive. In fact, I found myself having to disable it while the HomePods are on my desk, otherwise it will accidentally trigger when I’m using the iPhone two feet from the speakers.
Video Reviews and Unboxings
Facebook has secretly been draining your phone battery to test features, former Meta employee claims
Facebook has been draining users’ phone batteries without their consent according to an ex-employee who claims they were fired for refusing to comply with the practice.
Facebook-parent Meta has been using “negative testing” for over five years, according to data scientist George Hayward, 33, who started working on the messenger app in October 2019.
In a now withdrawn lawsuit filed on Jan. 20, Hayward said he had seen an internal document titled “How to run thoughtful negative tests” which laid out details of the practice and examples leading back to 2016.
That document indicates that Meta has been using “negative tests” across its platforms, which have around 2.96 billion users according to recent reports. They are used to “measure impact” by testing new features, and by measuring how quickly the app runs, how images load and how news feed scrolls perform.
When asked to participate, Hayward said he refused out of concern for the risks involved in depleting users’ power, especially in cases when they have to communicate to others like the emergency services.
Hayward’s lawyer, Dan Kaiser, maintained that “negative testing” is not legal in New York, according to the New York Post, saying that it violates a law that prohibits damaging someone’s property without their consent.
“It’s clearly illegal,” Kaiser said. “It’s enraging that my phone, that the battery can be manipulated by anyone.”
“Negative testing” concerns shut down
The ex-employee said he doesn’t know how many people have been affected by the tests, but that when he expressed this to his supervisor at the time, his concerns were pushed to the side.
“It turns out if you tell your boss, ‘No, that’s illegal,’ it doesn’t go over very well,” Hayward told the New York Post.
“I said to the manager, ‘This can harm somebody,’ and she said by harming a few we can help the greater masses.”
According to the suit, Hayward noticed retaliation including low performance ratings, reviews that were canceled and then rescheduled, and the assignment of responsibilities that set him up for failure.
He was fired in November, which coincided with Meta’s recent mass layoffs. However, his lawyers argue that this was no coincidence.
The lawsuit, filed in Manhattan, has now been withdrawn due to Meta’s internal arbitration clause; however Hayward stands by his allegations, his lawyer told the Post.
A Meta spokesperson told Fortune: “Mr Hayward’s claims are without merit.”
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Report: Microsoft, Sony & Nintendo All Skipping E3 2023 – Kotaku
This was supposed to be the year, after industry setbacks and a global pandemic, that E3—once the brightest centre of the video game universe—came back “recognizably epic” as a live show for the first time since 2019. Reports today indicate, however, that it will be doing so without any of the console industry’s power players.
A story on IGN this evening says “all three of gaming’s first-party console manufacturers appear poised to skip E3’s big return”, meaning that for the first time in the live show’s history not a single one of them will be at an event that was traditionally their highlight of the whole damn year.
While this is a definitive final straw for E3, this has been coming for a while. Nintendo stopped holding big E3 press conferences ten years ago (though the company had a showroom floor presence at the last live show in 2019), and Microsoft and Bethesda recently pivoted to holding their own showcases alongside the E3 festivities. Sony also began passing on E3 stuff a few years back.
While Microsoft won’t be at any official E3 events, boss Phil Spencer says that, as they’ve done the last few years, Xbox will in 2023 be doing stuff alongside E3 so that any press and industry folks in town for that show will be around for theirs as well. It’s not known what Nintendo and Sony will be doing in E3’s stead, if anything, though Geoff Keighley’s rival Summer Games Fest will be taking place at roughly the same time.
It’s important to note here that this isn’t the same E3 as the olden days. Events specialists ReedPop took over planning of the show last year, and said:
For years, we’ve listened, heard, and studied the global gaming community’s feedback. E3 2023 will be recognizably epic—a return to form that honors what’s always worked—while reshaping what didn’t and setting a new benchmark for video game expos in 2023 and beyond.
How they’re going to be “recognizably epic” without any major platform holder in attendance is anyone’s guess, though ReedPop did say in a statement to IGN that:
As we spent much of 2022 refining how E3 2023 would take shape, reflecting on the feedback we solicited, we did not send a single contract to an exhibitor until the start of this month. We have received a tremendous amount of interest and verbal commitments from many of the biggest companies in the industry, and when we are ready to announce the exhibitors we are confident it will be a lineup that will make the trip to Los Angeles well worth it for the industry and consumers alike.
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