call of duty – Techdirt (original) (raw)

Stories filed under: "call of duty"

Families Of Uvalde Shooting Victims File Silly Lawsuit Against Meta & Activision, Which Had Nothing To Do With The Shootings

from the exploiting-the-families-here-is-disgusting dept

You have to feel tremendous sympathy for the families of the victims in the school shooting in Uvalde, Texas. As has been well documented, there was a series of cascading failures by law enforcement that made that situation way worse and way more devastating than it should have been.

So who should be blamed? Apparently, Meta and Activision!

Yes, the families also went after the city of Uvalde and recently came to a settlement. That seems like a perfectly righteous lawsuit. However, this new one just seems like utter nonsense and is embarrassing.

The families are suing Meta and Activision for the shooting. It’s making a mockery of the very tragic and traumatic experience they went through for no reason other than to puff up the ego of a lawyer.

It’s reminiscent of moral panics around video games, Dungeons & Dragons, and comic books.

For what it’s worth, they’re also suing Daniel Defense, the company that made the assault rifle used by the shooter in Uvalde. And while that’s not my area of expertise, so I won’t dig deep on that part of the lawsuit, I can pretty much guarantee that has no chance either.

This lawsuit is performative nonsense for the lawyer representing the families. I’m not going to question the families for going along with this, but the lawyer is doing this to get his name more famous and we won’t oblige by talking about him here. He’s taking the families for a ride. This is a ridiculous lawsuit, and the lawyer should be ashamed of giving the families false hope in bringing such a nuisance lawsuit for his own ego and fame.

The lawsuit is 115 pages, and I’m not going through the whole thing. It has 19 different claims, though nearly all of them are variations on the “negligence” concept. Despite this being on behalf of families in Uvalde, Texas, it was filed in the Superior Court of Los Angeles. This is almost certainly because this silly “negligence” theory has actually been given life in this very court by some very silly judges.

I still think those other cases will eventually fail, but because judges in the Superior Court in LA seem willing to entertain the idea that any random connection you can find to a harm can have to go through a full lengthy litigation process, we’re going to see a lot more bullshit lawsuits like this, as lawyers keep bringing them, hoping for a settlement fee to go away, or maybe an even dumber judge who actually finds this ridiculous legal theory to be legitimate.

Section 230 was designed to get these frivolous cases tossed out, but the success of the “negligence” theory means that we’re getting a glimpse of how stupid the world looks without Section 230. Just claim “negligence” because someone who did something bad uses Instagram or plays Call of Duty, and you get to drag out the case. But, really, this is obviously frivolous nonsense:

To put a finer point on it: Defendants are chewing up alienated teenage boys and spitting out mass shooters. Before the Uvalde school shooter, there was the Parkland school shooter, and before him, the Sandy Hook school shooter. These were the three most deadly K-12 school shootings in American history. In each one, the shooter was between the ages of 18 and 21 years old; in each one, the shooter was a devoted player of Call of Duty; and in each one, the shooter committed their attack in tactical gear, wielding an assault rifle.

Multiple studies have debunked this nonsense. Millions of people play Call of Duty. The fact that a few teenage boys later shoot up schools cannot, in any way, be pinned to Call of Duty.

And why Meta? Well, that’s even dumber:

Simultaneously, on Instagram, the Shooter was being courted through explicit, aggressive marketing. In addition to hundreds of images depicting and glorifying the thrill of combat, Daniel Defense used Instagram to extol the illegal, murderous use of its weapons.

In one image of soldiers on patrol, with no animal in sight, the caption reads: “Hunters Hunt.” Another advertisement shows a Daniel Defense rifle equipped with a holographic battle sight—the same brand used by the Shooter—and dubs the configuration “totally murdered out.” Yet another depicts the view through a rifle’s scope, looking down from a rooftop; the setting looks like an urban American street and the windshield of a parked car is in the crosshairs.

That’s it.

Literally. They’re suing Meta because the shooter saw some perfectly legal images on Instagram from a gun manufacturer. And somehow that should make Meta liable for the shooting? How the fuck is Meta supposed to prevent that? This is a nonsense connection cooked up by an ambulance chasing plaintiff’s lawyer who should be embarrassed for dragging the families of the victims through such a charade.

This is nothing but another Steve Dallas lawsuit, as we’ve dubbed such ridiculous lawsuits. This is based on the classic Bloom County comic strip, where Steve Dallas explains that the “American Way” is not to sue those actually responsible, but some tangentially related company with deep pockets.

It’s been nearly 40 years since that strip was published, and we still see those kinds of lawsuits, now with increasing frequency thanks to very silly judges in very silly courts allowing obnoxious lawyers to try to make a name for themselves.

Filed Under: blame, call of duty, intermediary liability, liability, moral panic, steve dallas, uvalde, video games
Companies: activision, daniel defense, instagram, meta

Peoria Police Put Out Recruiting Poster Telling Recruits To Come Play ‘Call Of Duty’ In Real Life

from the pew-pew-pew dept

Whatever your thoughts on policing in general in America, I would hope it would be largely uncontroversial to state that a huge percentage of Americans believe that police are generally over-militarized and at least slightly a little too trigger happy, especially when it comes to engaging minority communities. If you somehow think that there isn’t at least a perception problem among the public here, then you probably don’t need to keep reading the rest of this post, because it’s not going to make sense to you.

But if you do understand that there is some level of a problem here, your skin will almost certainly crawl when you see the recruiting poster the Peoria, IL police put out on social media to try to get young recruits.

A Peoria, Illinois police department tried to recruit new officers with a Call of Duty-inspired campaign on social media, and it was as tone-deaf as you’d imagine. The post, originally shared on the Peoria Police Department’s social media page, showed three white men posing with guns while wearing tactical gear. “Stop playing games and answer the Call of Duty,” the post reads, with the “Call of Duty” portion of the poster written in the same text as Activision’s wildly popular (and more than occasionally problematic) first-person shooter franchise.

Imagine just how tone-deaf you have to be in the current climate of policing in America to put this poster out. First, recruiting people with images of police in tactical gear pointing guns is precisely the wrong message you want to put out to a community in Peoria that is concerned about policing. Doubly so when the image is of three white cops in a community with a sizable black population.

And now add to all of that the simple fact that Call of Duty is a game in which you primarly spend a great deal of time shooting individuals. Like, with bullets and stuff. You know, to kill them. And, sure, it’s a video game and in that context I don’t have an issue with the game itself. But in a society where many believe that police far too often see themselves as gun-toting enforcers through violence, recruiting against a video game like CoD is absurd.

Police Chief Eric Echevarria eventually took the post down and apologized in a way that I will say does ring through as genuine.

It was never my intention to offend any of our community members with the recruitment flyer that was posted on our Facebook page yesterday. It was simply a recruitment image I thought would appeal and connect to a younger generation. I take ownership of this, and I sincerely apologize. Our goal is to recruit the best and most qualified officers for this police department in the most caring and respectful way.

It’s probably a good move, because we haven’t even gotten into the issue of intellectual property. The poster does name the game and use the same or similar font for the game’s branding when doing so. While I’m not sure there’s an actual trademark infringement case to be made here, I am also quite sure that Activision probably wouldn’t appreciate the use of its product name and branding in this way.

And so the poster is down, but the damage is done. In a community where fear of police violence is very real, that community got a reminder of how some police officers see their jobs.

Filed Under: call of duty, eric echevarria, illinois, peoria, peoria pd, police

The FTC Is Trying To Get Back Into The Ring With Microsoft Over Activision Deal

from the probably-too-late dept

Uh, well, okay then. I really thought we were done with the whole Microsoft buying Activision Blizzard saga. Hell, I even wrote what I thought was a final post on the matter, called the post a curtain call, and discussed how the deal had passed all the regulatory barriers and had been consumated. That happened after the FTC lost in court on its request for a TRO to block the deal and then subsequently paused on its suit entirely, clearing the way for the deal to move forward. At the time, the FTC made some noises about appealing the lower court’s decision, but then didn’t.

Until now. Nearly five months later, the FTC has appealed the court’s decision, arguing that the lower court essentially just believed whatever Microsoft said at face value.

The US government told a federal appeals court Wednesday that Microsoft’s recent purchase of Activision should not have been cleared by a lower-court judge, because the judge had been too deferential to Microsoft’s promises about the future of “Call of Duty,” a popular first-person shooter game.

District Judge Jacqueline Scott Corley went too far, the Federal Trade Commission argued, when she ruled in July that 11th-hour contracts Microsoft signed with Nintendo, Nvidia and other gaming companies concerning “Call of Duty” would resolve anticompetitive concerns related to the blockbuster deal.

Even if you think that the FTC’s argument is valid, which I very much do and wrote about at the time, I will be completely surprised if this gets any traction. Too much has progressed in too many places, especially in the European markets, to imagine the courts somehow coming back 2 months after this deal was completed and unringing the bell.

The only shred of hope I could see this having is the part of the FTC’s argument in which it claims that Microsoft’s decision to go around inking a bunch of 10 year deals to bring certain titles, namely the Call of Duty series, to non-Microsoft platforms altered the landscape the FTC was analyzing so significantly that it didn’t have the time dig into the details and build an argument against that new landscape.

“I fail to understand how giving somebody a monopoly of something would be pro-competitive,” said Imad Dean Abyad, an FTC attorney, in the argument Wednesday before the appeals court. “It may be a benefit to some class of consumers, but that is very different than saying it is pro-competitive.”

Abyad said that Microsoft’s flurry of licensing agreements in response to regulator scrutiny altered the economic picture in ways the FTC did not have an opportunity to fully review but that courts are now forcing it to accept.

“What the district court relied on, mostly, are contracts that were entered into after the [FTC] complaint was filed,” Abyad said. “The facts were changing all along. Even after the district court decided the case, Microsoft went ahead and entered into yet another contract [to restructure the cloud licensing rights].”

We said at the time that Microsoft was clearly taking the complaints from various regulatory bodies as some sort of paint by numbers prescription as to what deals to make to get around them. And I very much can see the FTC’s point on this. It brought a complaint under one set of facts only to have Microsoft alter those facts, leading to the courts slamming the deal through before the FTC had a chance to amend its arguments.

But ultimately it won’t matter. This last gasp attempt will almost certainly fail. American regulatory bodies have dull teeth to begin with and I’ve seen nothing that would lead me to believe that the courts are going to allow the agency to unwind a closed deal after everything it took to get here.

Filed Under: antitrust, call of duty, ftc, mergers
Companies: activision blizzard, microsoft

FTC Puts Challenge To Microsoft, Activision Deal On Hold

from the the-beginning-of-the-end dept

Well, well, this may be a story that is starting to come to a close. With the EU having already approved Microsoft’s acquisition of Activision Blizzard, the two remaining hurdles Microsoft had to jump through were with the UK’s CMA agency and the FTC here in the States. After a recent loss in court blocking a TRO to stop the deal from proceeding while the inquiry continues, the FTC made a bunch of noise about appealing that ruling and continuing forward with its own challenge in court. In the less than two weeks that has followed, several important things happened impacting the likely outcome of the regulatory challenges.

First, Sony ended up inking a similar 10 year deal to keep Call of Duty on PlayStation hardware, just as other gaming platforms have. Shortly after that, the FTC announced it was putting its own administrative challenge to the deal “on hold”, paving the way for an eventual approval.

In light of all this, the FTC has put their own in-house administrative challenge on hold for the foreseeable future. After the court win and Sony giving in, there wasn’t much to keep fighting against. The sale is almost certainly going to go through.

Despite win after win, Microsoft and Activision Blizzard announced this week that they are delaying the merger for another three months so they can get all of the details right. The new acquisition date is October 18.

Such a quick cutting of the bait sure does imply that the FTC no longer thinks this is a fight it can win. And Microsoft, especially after extending its deal deadline, can and will point to the non-active status of the FTC’s inquiry as a reason it can consummate the deal.

Which leaves just the CMA standing in the way of this story coming to a close.

The main reason for the delay is the ongoing battle with the Competition and Markets Authority (CMA) in the UK. That regulatory body has not backed down and is currently trying to stop the deal. Both companies want to make sure they square that away first before moving forward.

This whole exercise has, frankly, been absurd. Microsoft has put on something of a master class in how to navigate regulatory agencies that supposedly are there not as bureaucratic noisemakers, but as parties chiefly interested in the long term health of competitive markets. The idea that a couple of deals that last a decade and a bunch of promises from a company like Microsoft were enough to get everyone but the CMA on board suggests the regulators, as per usual, lack any real teeth.

Filed Under: antitrust, call of duty, cma, competition, ftc, merger, uk
Companies: activision blizzard, microsoft

It Ain’t Over: FTC Appeals Microsoft, Activision Ruling While CMA Pumps The Brakes On Restructuring Deal

from the how-appealing dept

Well, well, it appears that rumors of the death of the regulatory battle over the Microsoft and Activision Blizzard purchase have been greatly exaggerated. We just discussed media reports of two items related to the deal. The first was the FTC’s loss in court to get a preliminary injunction barring the two companies from consummating the purchase, potentially allowing them to close on the deal even as FTC litigation remains pending and the CMA in the UK works through Microsoft’s appeal of its blocking the deal. The second were reports that Microsoft and the CMA were close on a restructuring of the deal that would lead to the CMA granting its approval of the purchase. In that post, I indicated that those combined reports threw into question whether the FTC would even bother appealing the ruling.

Well, we have updates on both instances. To start, the FTC has officially appealed the ruling for the preliminary injunction to the 9th Circuit Court of Appeals.

The Federal Trade Commission (FTC) says it is appealing a recent US federal court order that cleared the way for Microsoft to purchase Activision Blizzard. The FTC has filed a notice that it’s appealing Judge Jacqueline Scott Corley’s decision, but we won’t know the regulator’s arguments until the full appeal is submitted to the Ninth Circuit Court of Appeals.

Now that the FTC is choosing to appeal Judge Corley’s decision, the regulator needs the Ninth Circuit Court of Appeals to issue an emergency stay to extend the existing temporary restraining order (TRO) that is set to expire at 11:59PM PT on Friday, July 14th. It’s not clear if the appeals court will even rule before the deal deadline on July 18th, potentially leaving the door open for Microsoft to close the Activision Blizzard deal on Monday or Tuesday without a restraining order in place.

The timing on this matters. Were Microsoft to rush to complete the deal prior to the ruling on the appeal, it would make it that much more complicated for the FTC to convince the courts to unring the bell, as it were. Given Microsoft’s opposition to the injunction to begin with, you would think the company might break its promise not to consummate the deal until all regulatory action is resolved to keep things moving. And, while we don’t currently have any insight into the FTC’s reasoning behind the appeal, I imagine it will largely be based on the lower court’s taking as gospel Microsoft’s pledge to treat CoD like it did Minecraft rather than the myriad of other titles that it has taken exclusive after acquiring other studios, like Zenimax. From my perspective, the lower court’s ruling rang as one-sided on levels that were bizarre.

But also in the post at The Verge, it turns out that reports that Microsoft and the CMA were aligned on a simple restructuring of the purchase were overstated as well.

In a surprise statement on Wednesday, the CMA then warned Microsoft’s opportunity to restructure its deal could “lead to a new merger investigation,” and that talks between the regulator and Microsoft were still at an “early stage.”

A report from CNBC originally claimed Microsoft and the CMA had agreed on a “small divestiture” to address the cloud gaming concerns, but was later corrected to clarify Microsoft has only offered “a small and discrete divestiture” that the CMA hasn’t necessarily accepted. CNBC didn’t expand on what that divestiture could involve, but such a scenario will likely be specific to the UK and could involve changes to Microsoft’s Xbox Cloud Gaming services in the region.

Which is all well and good, but if a restructuring of the deal is going to result in “a new merger investigation”, then that’s a major extension of the timeline for when that will all be resolved. Even if such an investigation were more truncated, it’s a delay that at least will push any approval past Microsoft’s self-imposed deadline to complete the deal.

That deadline can be moved, obviously, but the more important message this is sending is that the regulators aren’t done regulating yet and, for the FTC specifically, it appears that the fight some thought was over will instead go on.

Filed Under: 9th circuit, antitrust, call of duty, cma, competition, ftc, uk, video games
Companies: activision blizzard, microsoft

Court Rules Against FTC To Keep Microsoft’s Activision Deal From Closing Pending Antitrust Trial

from the the-beginning-of-the-end dept

And away we go. The ongoing saga that is Microsoft’s attempt to acquire Activision Blizzard has been going on for months now, with a flurry of news and activity occurring over the past couple of those months as the deal sits before three major regulatory bodies in the EU, the UK, and here in America. If you’re keeping score at home, the EU has already approved the deal, the UK’s CMA blocked it pending Microsoft’s appeal, and the FTC filed an antitrust suit and requested a preliminary injunction barring the deal from going through until that litigation is complete.

That injunction hearing was a mess from the start, with Microsoft promising not to consummate the deal until all litigation with regulatory bodies had been resolved, but then the company turned around and opposed the injunction anyway. Over five days, the court heard testimony from both sides, with the FTC pointing out just how many first party Microsoft titles were being released as exclusives as evidence that it would do likewise with Activision Blizzard titles. Sony stepped in with its own anti-competitive behavior for some reason, while Microsoft appears to have outed Sony’s plans for new consoles in its own filings.

And now the court has ruled for Microsoft on the injunction, which frees Microsoft to complete the deal, though, again, Microsoft promised not to until all litigation with regulators is complete. In the ruling itself, the court essentially takes all of the deals Microsoft announced with cloud and console providers to keep Call of Duty multi-platform for 10 years as proof that the FTC is being alarmist. And, the court adds, the FTC hasn’t shown it’s likely to win on its larger antitrust suit.

Microsoft’s acquisition of Activision has been described as the largest in tech history. It deserves scrutiny. That scrutiny has paid off: Microsoft has committed in writing, in public, and in court to keep Call of Duty on PlayStation for 10 years on parity with Xbox. It made an agreement with Nintendo to bring Call of Duty to Switch. And it entered several agreements to for the first time bring Activision’s content to several cloud gaming services. This Court’s responsibility in this case is narrow. It is to decide if, notwithstanding these current circumstances, the merger should be halted—perhaps even terminated—pending resolution of the FTC administrative action. For the reasons explained, the Court finds the FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition. To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content. The motion for a preliminary injunction is therefore DENIED.

What’s odd in that is it’s sort of besides the point the FTC was making. The court is essentially saying that regulatory efforts caused Microsoft to ink these temporary, non-exclusivity deals for one game franchise, almost congratulating the FTC for doing so. But Call of Duty isn’t the only game franchise Activison Blizzard publishes. And the larger question about whether other titles would be made Microsoft exclusives goes mostly unanswered, other than the court pointing out that Minecraft is still multi-platform post Microsoft’s acquisition.

Will Microsoft keep to its public commitment to not complete the deal until the antitrust suit and CMA appeal is complete? I doubt it. It has little incentive to do so. Completing the deal makes the job of the regulators all that much more difficult, as courts are rarely willing to roll back already completed deals like that.

Add to all of this that we’re starting to see signals that Microsoft thinks it’s going to be able to get its issues with the CMA resolved in the UK as well.

Minutes after Judge Corley’s decision, both the CMA and Microsoft have agreed to pause their legal battle in the UK to negotiate how the Activision Blizzard deal could be modified to address the CMA’s cloud gaming concerns.

That’s about as public an indication as we’re going to get that a deal will be worked out to allow the purchase to move forward there, as well. As Kotaku notes, the FTC can appeal, but that isn’t generally what happens in our toothless regulatory climate, nor is it likely to ultimately torpedo the acquisition.

The FTC can try to appeal the ruling, and still has its own anti-trust lawsuit in the works, but both appear unlikely at this juncture to derail the deal. The last obstacle in Microsoft’s way, the Competition and Markets Authority (CMA) blocking the deal in the UK, also appears to be disappearing. Microsoft President Brad Smith tweeted that it is currently set to negotiate with the CMA on final remedies to win back approval for the deal.

And so it seems likely this deal goes through, after all. So sit back, relax, and start taking bets on the over/under in months before we start doing posts on all the promises Microsoft made throughout all of this that it subsequently breaks.

Filed Under: antitrust, call of duty, cloud game, cloud gaming, competition, ftc, video games
Companies: activision blizzard, microsoft

Sony Hurts Its Case Against Microsoft Part 1: No Next-Gen Console Information For Activision

from the bad-look dept

The saga of Microsoft’s purchase of Activision Blizzard continues. The two biggest remaining hurdles over which Microsoft has to jump to get the deal over the finish line at this point are in the UK with the CMA and in America with the FTC. While Microsoft appeals the CMA’s refusal to allow the deal to move forward, the FTC’s suit is just getting started. We’re just starting to see the content of depositions and hearings at this point and two pretty significant developments have come out of them, neither of them being a particularly good look for Sony.

The first of those for this post is Sony Interactive Entertainment CEO Jim Ryan suggesting in a deposition that if the purchase of Activision is allowed, then Sony may no longer share information about future consoles with the developer out of concern of Microsoft learning PlayStation secrets.

If the sale of Activision Blizzard to Microsoft for $69 billion goes through, it could have big consequences for the future of Call of Duty on PlayStation. At least that’s what Sony Interactive Entertainment CEO Jim Ryan keeps saying. In a new deposition for the current lawsuit by the Federal Trade Commission, the PlayStation executive said the company won’t share PlayStation 6 information with Activision if it eventually becomes part of Xbox.

“We simply could not run the risk of a company that was owned by a direct competitor having access to that information,” Ryan told regulators, as reported by Stephen Totilo at Axios. The CEO also argued that in addition to Sony being unable to share “in-development console features” with Activision, the Call of Duty publisher would have less incentive to develop console-specific features for the PS5 and future devices like the PS6.

On its face, it makes some amount of sense. If Microsoft owns Activision Blizzard, then sharing any future-gen console information with the developer essentially means giving a competitor, Microsoft, insights into Sony’s secrets. Except there are a couple of things of note on this.

First, a huge part of Sony’s complaints about the purchase is that Microsoft could make major game franchises Microsoft exclusives. And this complaint is well-founded, as we just discussed the company doing exactly that with several Zenimax franchises. But… if the fear is that Microsoft makes games Microsoft exclusives, then those developers of those games wouldn’t need or want any information on the upcoming PS6, because the games wouldn’t appear on that platform. Ryan suggesting Microsoft might release a version of CoD that is sub-par on the PlayStation due to not having access to upcoming features both suggests that Sony thinks Microsoft will still release those games on PlayStations, entirely negating its reason for opposing the deal, and is a problem of Sony’s own making. It all rings as being anti-competitive, the very thing Sony is accusing Microsoft of.

And how come this doesn’t seem to be a major challenge when the roles are reversed or other consoles are brought into the equation? Nintendo inked a deal to put CoD on its consoles and this concern never came up. I don’t know if Nintendo gives anyone feature peeks for future consoles, but for whatever reason there was no problem for them. And Sony has first-party titles that appear on Microsoft platforms, so why isn’t this a problem in reverse?

Sony-owned games like Destiny 2 and MLB The Show currently ship on Xbox, and it’s unclear if Microsoft has or will face similar concerns with sharing similar info with Bungie and Sony San Diego Studio when new Xbox hardware is being developed.

There doesn’t seem to be any major problem in those cases, so why is this such a big deal when it’s Microsoft putting out first-party titles on Sony hardware?

At the end of the day, this just wasn’t a particularly good look for Sony. Anticompetitive threats issued in the very case where the major concern is anticompetitive behavior is certainly a strategy of sorts.

Filed Under: antitrust, call of duty, competition, jim ryan, merger, playstation, video games, xbox
Companies: activision blizzard, microsoft, sony

FTC Moves For A Restraining Order Stop Microsoft, Activision Blizzard Merger From Consummating

from the not-so-fast dept

We’ve been covering Microsoft’s attempt to acquire Activision Blizzard for months now and it just keeps getting more and more interesting. A very quick primer: Microsoft is seeking to acquire the company for a bonkers amount of money, the EU has already approved the deal, while the UK’s CMA has blocked it, and the FTC has filed suit to block it as well. The EU approval notwithstanding, the other two regulatory blocks represent serious challenges to this deal ever moving forward. Microsoft also made a point of stating previously that it would not finalize the deal while any pending litigation with the regulators was still going on.

It appears that the FTC doesn’t believe that claim, however. The commission has just petitioned in court for a temporary restraining order that would bar the deal from being consummated until its suit is resolved. And within that petition are some interesting hints as to what the FTC’s argument against the deal is going to be.

But first, the petition.

The FTC filed its complaint (PDF) for a temporary restraining order and preliminary injunction against Microsoft and Activision Blizzard’s injunction. The complaint claims that the parties “may consummate the Proposed Acquisition at any time,” despite pending actions with both the FTC and the UK antitrust authority.

The complaint specifically cites the long success of the Call of Duty franchise, the instant success of Diablo IV, and Overwatch 2 as “a successful new title,” in suggesting why Microsoft’s ownership of both Activision and its own gaming platforms would be problematic. A merger, the FTC writes, would be “reasonably likely to substantially lessen competition and/or tend to create a monopoly” in “high-performance consoles, multi-game content library subscription services, and cloud gaming subscription services.”

The filing itself goes further than that, which is where we get into some of the specifics the FTC is going to bring to the table in its suit. There are the normal claims you would expect in a suit like this: it would reduce competition and harm consumers in terms of choice, pricing, etc. But unlike the CMA’s tacit focus on the cloud gaming space, the FTC specifically calls out the console market as among the primary concerns.

Microsoft and Sony control the market for high-performance video game consoles. The number of independent companies capable of developing standout video games for those consoles has contracted, with only a small group of firms commanding that space today. Microsoft now proposes to acquire Activision, one of the most valuable of those developers, in a vertical merger valued at nearly $70 billion (the “Proposed Acquisition”) that will increase Microsoft’s already considerable power in video games. If consummated, the Proposed Acquisition would be the largest in the history of the video game industry and the largest in Microsoft’s history. The Proposed Acquisition would continue Microsoft’s pattern of taking control of valuable gaming content. 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—including competition on product quality, price, and innovation. This loss of competition would likely result in significant harm to consumers in multiple markets at a pivotal time for the industry.

Microsoft, one of only two manufacturers of high-performance video game consoles, develops and sells Xbox gaming consoles. Microsoft is vertically integrated: through its in-house game studios, it develops and publishes popular video game titles such as Halo. Such in-house games are known as “first-party” titles in the industry.

And then it goes on into the cloud side of Microsoft’s business. But in those two paragraphs, the FTC does two things. First, it puts a spotlight on the console market instead of focusing solely on cloud-gaming. That will become important in a moment. Second… it sort of digs at Nintendo for not being on the same level as Sony and Microsoft. That isn’t really important for this post, but I like to imagine Nintendo execs reading this and feeling super insulted by it. Why? I don’t know, but it makes me happy.

So why is that focus on the console market important? Because another section of the filing makes it clear that the FTC is going to tell the court at trial that Microsoft simply isn’t to be believed as to its plans to keep titles from being pulled into exclusivity arrangements.

Microsoft’s past conduct provides a preview of the combined firm’s likely plans if it consummates the Proposed Acquisition, despite any assurances the company may offer regarding its plans. In March 2021, Microsoft acquired ZeniMax Media Inc. (“ZeniMax”), the parent company of the well-known game developer and publisher Bethesda Softworks LLC (“Bethesda”). Microsoft assured the European Commission (“EC”) during its antitrust review of the ZeniMax purchase that Microsoft would not have the incentive to withhold ZeniMax titles from rival consoles. But, shortly after the EC cleared the transaction, Microsoft made public its decision to make several of the newly acquired ZeniMax titles, including Starfield, Redfall, and Elder Scrolls VI, Microsoft exclusives.

Yup. Fool me once, shame on you. Fool me twice? Something about George Bush, if I’m recalling the saying correctly.

The TRO is being sought because the FTC doesn’t have the power to block the deal being signed during litigation without it. Instead, the suit, if successful, would have to un-ring that bell, in a manner of speaking. Whether it’s granted or not remains to be seen, but the request for the TRO is downright scathing.

Filed Under: antitrust, call of duty, ftc, merger, preliminary injunction, tro, video games
Companies: activision blizzard, microsoft

Activision Appeals CMA Ruling On Its Activision Acquisition, Calling It ‘Irrational’

from the sick-burn dept

Microsoft’s acquisition of Activision Blizzard plods along with a drip of news coming out every so often. For those of you with your pencils and scorecards ready, the current state is: the FTC has sued to stop the deal in the States, the EU has given its approval for the purchase to move forward, and the UK’s CMA blocked the purchase outright.

Obviously Microsoft could not have been pleased with the CMA’s decision. In the least surprising news of all time, it has appealed that decision to the Competition Appeal Tribunal (CAT? Really meow?) and it is not mincing words in its complaints. I also don’t know that this appeal is going to get very far, since it primarily focuses on the issues in the cloud gaming space, acting as if that was the only issue the CMA had with the purchase.

The appeal takes particular issue with the CMA’s focus on cloud gaming in a vacuum, without taking into account competition from “native gaming” via games running on local hardware. The ability to easily switch from one type of game experience to the other means that cloud gaming should not be a “separate product market,” Activision argues.

A source close to Activision’s appeals process (who asked for anonymity to speak frankly about the appeal) put a finer point on this argument, saying that cloud gaming is a niche technology and that “most consumers continue to get games by download or physical disc because running the game on their local hardware gives them a much better experience.”

And this is where Microsoft’s inking 10 year deals to keep Call of Duty on other cloud and/or console platforms comes into play. Microsoft points to those deals as though they were of infinite length, suggesting two things. First, that the cloud gaming market will have sufficient options for consumers due to those deals. Second, that cloud gaming is a niche market that will soon go away entirely because… reasons?

“Gamers want to play games. They don’t care whether they are downloaded or streamed,” the source told Ars. “The CMA’s approach to this question was irrational…”

Except this is quite silly. Just because Stadia bombed doesn’t mean cloud game streaming as a whole is going to go away, or even remain stagnant. The last 10 years of technology has one central theme above all else: cloud services are the path of the future.

But, says Microsoft, even if you allow for cloud gaming as more than a niche market, it still doesn’t matter because, again, Microsoft inked 10 year deals with other console makers as well.

Even if you grant that cloud gaming is an important and separate market, though, Activision argues that its 10-year agreements with Boosteroid and other cloud providers provide a way to avoid anti-competitive market harms. The CMA failed to take these agreements into account, Activision says, and ignored proposed remedies that would fall well short of barring the entire merger.

“Prohibition was a totally disproportionate outcome given the deal’s global scope and obvious benefits to consumers,” our source said. “The European Commission not only accepted Microsoft’s 10-year license of Activision content to cloud gaming providers, it found that the industry would be more competitive with the merger and licenses than without.”

This was always going to be Microsoft’s tactic the moment the EU approved the purchase: Hey, CMA, the EU is cool, baby, so why can’t you be cool, too? But that’s nonsense. There’s a reason there isn’t some homogenous global regulatory body approving or blocking these deals. What’s good for the EU may not be good for the UK. Or America. And an appeal that amounts to, “Hey now, all you had to do was take our word that everything will be fine and you didn’t do that, therefore we appeal” isn’t the most compelling case.

And, frankly, the CMA has a pretty good track record when it comes to surviving these appeals.

Activision might not want to get its hopes up about a successful appeal. Industry analysts have noted that the CMA has a very successful track record before the appeals body.

It wouldn’t be unheard of for the appeal to work, of course, but Microsoft might want to start thinking about its contingencies if it fails.

Filed Under: antitrust, call of duty, cma, competition, uk
Companies: activision blizzard, microsoft

Activision Shutters ‘CoD’ Fan Servers, Which Were Better, More Secure Than The Official Servers

from the officially-crap dept

Here we go again. We’ve talked several times in the past about game publishers and studios going out of their way to shut down fan-run servers for online play. The excuses for doing so mostly amount to either claims that intellectual property laws require this sort of policing action (it doesn’t), that the publisher needs to shut down servers for older versions of games to get people to buy newer versions (objection: asserting facts not in evidence), and some just seem to want to play strongman for whatever reason.

But the worst of these is when a publisher shuts down fan servers while either not bothering to put out a competing product themselves for legacy games, or when those fan servers are demonstrably better than the official servers. Activision serves as the most recent example of this, having shut down two fan-run server clients for legacy Call of Duty games, all while its own servers for online play are worse and less secure.

The first of these was SM2, which was a client for online play and included a bunch of mods to make the game different and, to some, better.

The first victim of Activision’s recent efforts was SM2, a major Modern Warfare 2 modding project whose development started over two years ago. Since then, the modding group has been working on updating that seminal 2009 release with new weapons, in-game perks, a redesigned UI, new streak and progression systems, and even a recent move to a more modern game engine.

Those efforts stopped last week, though, before the mod could even release its first version. The SM2 Twitter account reported that “a team member received a Cease & Desist letter on behalf of Activision Publishing in relation to the SM2 project. We are complying with this order and shutting down all operations permanently.”

These fan servers wouldn’t even be a thing if Activision would provide the same modding and functionality in its own official servers. There is obviously a market for this. And it must be a sizable enough market that Activision went to all the trouble to have its legal beagles craft and fire off the C&D notice. So why not just figure out how to make the same functionality work within the official servers themselves?

It gest worse with the second shut down, X Labs, which made a series of custom servers to play legacy CoD games in a more secure manner than on the official servers. See, online play for these legacy games is so chock full of hackers utilizing known exploits that, well, it makes much of the ranking systems and, sometimes, even playing the game flatly impossible.

Hackers on those official servers can kick other players from the game and reset their in-game rank and unlocked content, as Modern Warzone said he found out personally during a recent “throwback day” event in the player community. Playing these older games on PC also risks exposing your IP address and letting hackers insert malicious files onto your machine, he said.

“Basically, it’s just not safe,” Modern Warzone said. “If Activision Blizzard wants to continue to send out these cease and desists, they at least need to handle their security problems because it is egregious. You can’t just take away the ability for your fan base to play old games when it’s not harming you.”

Telling your fans, “Sorry, but we’re not let you going to play our games in a safe way and instead need you to use the official, wildly unsecure online servers we’re responsible for instead!” is not exactly treating your own fans well.

And Modern Warzone’s last point is the right one: if this isn’t really causing the company any harm, then what’s the point of this?

Filed Under: call of duty, copyright, fan servers, legacy video games, mods, video games
Companies: activision blizzard