Insights Into Tomorrow Episode 16: “Microsoft’s Gaming Monopoly”

[INTRO THEME]
[INTRODUCTIONS] (3-5 minutes)
Show introduction:
Insights Into Tomorrow Episode 16: “Microsoft’s Gaming Monopoly”

Host introductions
Host (Sam Whalen)
My co-host (Joseph Whalen)

[SUMMARY]

On January 18th, 2022, Microsoft announced that they were acquiring Activision Blizzard in an all-cash transaction valued at $68.7 billion, or $95 per share.
This is arguably the biggest piece of news in the history of the games industry.
Today, we’re going to take a look at why this acquisition is so important and what it means for Microsoft and the industry going forward.
In addition, we’ll hit some key elements that should be remembered surrounding this news.

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[TRANSITION]
Segment 1- What exactly happened?
WORLD SALAD- https://news.microsoft.com/2022/01/18/microsoft-to-acquire-activision-blizzard-to-bring-the-joy-and-community-of-gaming-to-everyone-across-every-device/
https://bit.ly/3rWkPPI
From Microsoft’s press release,
“Microsoft will acquire Activision Blizzard for $95.00 per share, in an all-cash transaction valued at $68.7 billion, inclusive of Activision Blizzard’s net cash.
When the transaction closes, Microsoft will become the world’s third-largest gaming company by revenue, behind Tencent and Sony.
The planned acquisition includes iconic franchises from the Activision, Blizzard and King studios like “Warcraft,” “Diablo,” “Overwatch,” “Call of Duty” and “Candy Crush,” in addition to global eSports activities through Major League Gaming.
The company has studios around the world with nearly 10,000 employees.
Important points
Microsoft will be the 3rd largest gaming company.
SONY. Gaming Revenue: $25.0 billion.
TENCENT. Gaming Revenue: $13.9 billion.
NINTENDO. Gaming Revenue: $12.1 billion.
MICROSOFT. Gaming Revenue: $11.6 billion.
Microsoft now owns some of the biggest franchises, especially Call of Duty. We’ll get back to COD.
King gives Microsoft a big foot in the mobile gaming market, which is where Tencent dominates.
COHOST- What are some things that come to your mind when looking at this acquisition?
This is the broad, umbrella look at the news. After this break we’ll take a look at some finer details.

[SEGMENT 2: Activision/Blizzard Baggage (10-15 minutes)
Activision/Blizzard has been making some questionable management decisions in the last few years.
Bobby Kotick- Activision Blizzard Inc. Chief Executive Officer
Bloomberg, from Devon Pendleton and Scott Carpenter “Activision’s CEO Is Looking at $375 Million Payday in Microsoft Sale”- https://www.bloomberg.com/news/articles/2022-01-18/activision-ceo-looking-at-375-million-payday-in-microsoft-sale
https://bloom.bg/33Mhqva
Last year, Activision Blizzard Inc. Chief Executive Officer Bobby Kotick received a 50% pay cut.
This year, he’s up for a $375.3 million windfall before taxes.
Koticks time as CEO has been marked by a leader whose recent tenure has been marked by employee complaints over sexism, a hostile work culture and mismanagement of assault claims.
As recently as November he was the target of employee walkouts and petitions demanding his removal over reports he failed to make the company’s board aware of allegations of rape and other serious misconduct.
CEO since 2017, Kotick owns almost 4 million shares of Activision, the most of any officer or director, filings show.
The second-largest holder, board Chairman Brian Kelly, owns 1.4 million through trusts and a foundation, a stake valued at $137.1 million based on the deal terms.
That’s where the money is coming from
Kotick’s compensation was controversial even before California’s Department of Fair Employment and Housing sued the video-game publisher in July, detailing a retaliatory “frat boy” culture.
Earlier, the company announced it was slashing Kotick’s 2021 salary and bonus in half in response to criticism his pay package was excessively lavish compared with peers.
Kotick was found in Jeffery Epsetin’s black book, including his company email address.
Union Busting
From Ethan Gach at Kotaku, – “Call Of Duty Maker Reveals Plan To Squash Union Effort, Activision Blizzard calls for studio-wide vote after refusing to voluntarily recognize Raven QA union”
https://kotaku.com/call-of-duty-warzone-activision-blizzard-raven-qa-union-1848422566
https://bit.ly/3g1BThO
“Thirty-four staff from Raven’s QA department revealed recently that they were organizing with the Communications Workers of America to unionize, an unprecedented step for developers at a major gaming company.
They called on Activision Blizzard…to voluntarily recognize the union, which had supermajority support within the QA department.”
Blizzard’s policy essentially boils down to, “When a company refuses to voluntarily recognize a union, the organizers behind it must win a majority in an election ratified by the National Labor Review Board, a hurdle that would have been easy for Game Workers Alliance to overcome within just the QA department.
By requiring “all employees at Raven ” to “have a say,” Activision Blizzard is effectively arguing that either the entire studio unionized or no one does.”
From Nicole Carpenter at Polygon https://www.polygon.com/22901414/activision-blizzard-raven-software-qa-union-reorg
https://bit.ly/3fWdU3L
The situation developed more. “In November, we began the process to convert our temporary employees to [full-time employment] status,” Raven Software studio head Brian Raffel said in an email to staff.
“Now, I’m excited to share that our QA colleagues will embed directly within various teams across the studio, including Animation, Art, Design, Audio, Production and Engineering.”
In the email, Raffel said the “move to embed our QA team” has been in the works for “several months.”
This comes after the QA team was on a six week strike.
This makes unionization even more difficult.
The timing of these events is interesting.
Acquisition using “get hype” moments to overshadow Activision/Blizzard’s terrible business practices?

SEGMENT 3: Microsoft in the Gaming Industry
Xbox Games Pass
Xbox Games Pass has become an extremely effective business practice for both Microsoft and gamers.
From Tom Warren at The Verge https://www.theverge.com/2022/1/18/22406059/xbox-game-pass-subscribers-25-million-microsoft-activision
https://bit.ly/3u8o7m1
“Microsoft’s Xbox Game Pass service now has 25 million subscribers.
That’s up from the 18 million Microsoft previously reported in January last year.
A Games Pass Ultimate Subscription is $15 a month and includes: over 100 games available to play, first party Xbox studio games day and date, Xbox Games with Gold and EA Play. In addition to Games Pass for PC
XGP is shifting how gaming companies look at revenue models.
Sony is looking to compete with its PSNow service.
It is similar to Games Pass but not nearly as effective in the marketplace.
However, Sony may be looking to beef up the service.
From Jonas Maki at Gamereactor, “the creator of PlayStation 4 and 5, Mark Cerny, has filed a patent via USPTO for “backward compatibility through use of spoof clock and fine grain frequency control”.
This doesn’t sound like something used to make PlayStation 4 games run better, and a reasonable guess is that it is related to older PlayStation consoles.
Could Sony try to compete by combining PS Plus and PSNow?
Xbox Gold is included with Games Pass Ultimate

SEGMENT 4: Call of Duty, and Monopolies
Let’s address the gun toting, Mountain Dew drinking, elephant in the room, Call of Duty
Once again, Call of Duty: Vanguard was the best selling game of 2021.
One of the market research group typically used to gauge game sales, The National Purchase Diary Panel, or NPD, released its sales report for 2021.
From Eddie Makuch at Gamespot (https://www.gamespot.com/articles/call-of-duty-vanguard-and-black-ops-cold-war-were-no-1-and-2-best-selling-games-of-2021-in-the-us/1100-6499720/)
https://bit.ly/3o1s9IT
“Vanguard was December’s best-selling game of December and the full year, and the series has now been the best-selling game franchise for dollar sales for 13 years in a row.”
For context, here’s the top five of 2021
Call of Duty: Vanguard
Call of Duty: Black Ops Cold War
Madden NFL 22
Pokemon Brilliant Diamond/Shining Pearl
Battlefield 2042
Microsoft now owns four of them
What does this mean for Microsoft monopolizing the games industry?
Should Playstation gamers be worried that they simply won’t be able to play some of their favorite franchises going forward?
COD has been confirmed to be multiplatform for at least 3 years (https://www.playstationlifestyle.net/2022/01/26/call-of-duty-ps5-exclusive-warzone-2/
By owning effectively all of the yearly releases that are cash cows for gaming companies, does Microsoft stifle competition?
As a gamer, how do you feel about this corporate consolidation?
Microsoft faced criticism in the 90’s for its antitrust practices, are we heading down a similar path?
From Makena Kelly at The Verge (https://www.theverge.com/2022/1/18/22889579/ftc-justice-department-lina-khan-kanter-google-facebook-amazon-antitrust)
https://bit.ly/3o36wb3
“The Justice Department and Federal Trade Commission launched a joint effort to modernize antitrust enforcement, seeking comment on how the agencies can apply current law in cases against tech companies like Meta (parent company of Facebook) and Google.
The announcement came at a joint press conference from FTC Chair Lina Khan and Justice Department Antitrust Chief Jonathan Kanter, who described the move as a wide-ranging enforcement modernization effort.
While the announcement spans markets, it specifically questions how regulators should approach merger approval in digital markets, potentially setting new legal standards around data aggregation, interoperability, and market consolidation that can affect competition.
Final Thoughts?
[OUTRO AND CREDITS]

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00:00:01:25 – 00:00:07:29
Narrator
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00:00:11:11 – 00:00:16:27
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Of insights into things.

00:00:18:05 – 00:00:44:16
Narrator
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00:01:00:05 – 00:01:09:23
Sam
Hello, everyone, and welcome to episode 16 of Insights into Tomorrow. Microsoft’s gaming monopoly. I’m your host today, Sam Whalen and my co-host Joseph Whalen. How you doing today?

00:01:10:01 – 00:01:10:25
Joseph
Doing good, Sam?

00:01:10:25 – 00:01:11:21
Joseph
How are you doing today?

00:01:11:27 – 00:01:28:00
Sam
Fantastic. We’ve taken a long hiatus from the show. The holiday break became the almost Q1 of 2020 to break, but we’re back. We’re back and we’re talking about the Microsoft acquisition of Activision and Blizzard. We’re going to break it all down for you.

00:01:28:14 – 00:01:48:16
Sam
On today’s episode, but really quick, just a quick summary at the top of the show. So in January the 18th, we’re a little bit late on this, but yesterday’s news are tomorrow’s insights. January 18th, 2022 Microsoft You guys may know them from Xbox and from computers announced that they were acquiring Activision Blizzard in an all cash transaction

00:01:48:16 – 00:02:04:26
Sam
valued at $68.7 billion, or $95 per share. Now, this is arguably the biggest piece of news in the history of the games industry, and on today’s show, we’re going to take a look at what this means, why the acquisition is so important, and honestly, why you should care because you might, you know, look at this news and say

00:02:04:26 – 00:02:19:04
Sam
, Well, how does this affect me? It might not, but we’ll get into it regardless. In addition, we’ll hit some key elements excuse me, some key elements that should be remembered in this conversation going forward. But before we get into all that, I wanna remind you some show plugs.

00:02:19:11 – 00:02:36:08
Sam
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00:02:36:08 – 00:02:55:27
Sam
It does help our numbers quite a bit in terms of contact information. We can be emailed at cons, comments and insights into things. RT.com Twitter We are at InSight’s Underscore Things Facebook can just search insights into things podcast Instagram, add insights into things and finally, all these links, as well as more information, are on our website.

00:02:56:06 – 00:03:19:01
Sam
Adobe WW Insights into things dot com. But that’s all the housekeeping for today. Let’s get right into the program. All right, so starting off with what exactly happened here, now we have the press release from Microsoft that I’ve pulled a couple of excerpts from just because nobody wants to hear boring corporate speak.

00:03:20:04 – 00:03:38:25
Sam
But I’ve kind of brought it down here. So quote Microsoft will acquire Activision Blizzard for $95 per share, which we heard at the top of the show a 68.7 billion dollar purchase inclusive of Activision Blizzard’s net cash. Now, when this transaction closes, Microsoft will become the world’s third largest gaming company by revenue.

00:03:39:10 – 00:03:52:24
Sam
And they are behind Tencent, a number one. Tencent, if you don’t know, is a mobile game company. They’re out of China. They make a ton of money through mobile games and of course, Sony at number two, Sony being the main competitor Microsoft.

00:03:53:09 – 00:04:07:16
Sam
Now, the planned acquisition includes iconic franchises from the Activision Blizzard and King Studios King being the makers of Candy Crush. But games like Warcraft, whether it be World of Warcraft or is there another Warcraft game there?

00:04:07:16 – 00:04:09:27
Joseph
There’s a whole series of different Warcraft games that are.

00:04:11:01 – 00:04:24:17
Sam
Diablo Overwatch Call of Duty, which call it is a big one will come back to. And like I said, Candy Crush, in addition to the global e-sports activities through MLG or Major League Gaming, which is one of the biggest e-sports.

00:04:24:26 – 00:04:26:12
Sam
And what would you call them? Producers?

00:04:27:04 – 00:04:28:13
Joseph
Yeah, organizers, yeah.

00:04:29:08 – 00:04:47:17
Sam
The company has studios around the world with nearly 10,000 employees. Now, if we can see we have a there’s a graphic, you can look up. We have it on this back monitor here. But some of the studios included are Treyarch Raven, Hyman Beanbags Infinity Ward Toys for Bob, which makes remakes mostly.

00:04:47:26 – 00:05:00:22
Sam
But it’s more than just, you know, these big games here. These are your big things. Your Overwatch is your call duties, which will hit on more and later on in the show. But it’s important to remember just how many studios are being acquired now under the Microsoft banner.

00:05:01:09 – 00:05:11:28
Sam
But you may not even think of. But some important points, actually before we get into that. Joe, what do you think about this acquisition? When you see these big studios? Do any of these games jump out to you?

00:05:12:16 – 00:05:20:29
Joseph
Well, obviously some of them do. I mean, we’ve got cold air, we’ve got Diablo, we’ve got World Warcraft. That’s a little little long in the tooth right now, but it’s a huge franchise.

00:05:22:26 – 00:05:24:04
Joseph
one thing it’s.

00:05:24:04 – 00:05:30:13
Joseph
Important to emphasize is the deal is still pending regulation regulator approval, so it isn’t a.

00:05:30:13 – 00:05:30:27
Joseph
Done.

00:05:30:27 – 00:05:40:17
Joseph
Deal just yet. So I think it’s important to point that out. I think it’s definitely a huge deal as far as dollar value and the impact of the industry.

00:05:41:20 – 00:05:45:03
Joseph
I don’t think it’s game breaking just yet. I think we kind.

00:05:45:03 – 00:05:57:06
Joseph
Of have assuming it goes through. You’ve got probably about three years or more before it starts having a huge impact because of existing contracts and rights management that’s going on.

00:05:57:08 – 00:06:11:15
Sam
Yeah, definitely. I think the I think there’s a special task force task force is a bit dramatic, but there’s a there’s a FTC group being assembled specifically to look into this to make sure that it’s all, you know, it’s all square before this acquisition goes through.

00:06:11:15 – 00:06:25:06
Sam
So it is still pending, but it’s most likely going to happen. So we thought we’d cover it today, but some more important points for you. Like I said, Microsoft now becomes or will become once us, if this goes through, will become the third largest gaming company by revenue.

00:06:25:23 – 00:06:44:16
Sam
Just to put that into perspective, oh, what’s wrong? Sony is number one with gaming revenue at $25 billion, Tencent coming in at number two with 13.9 billion. Nintendo was number three with 12.1 billion, but Microsoft has knocked them out with 11.6 billion, which you know, those numbers don’t make sense, none of them looking at them.

00:06:44:27 – 00:06:57:22
Sam
But Microsoft will be taking that third spot for revenue. I imagine those numbers will probably go up for them now that they have acquired all these big franchises. Speaking of those franchises, especially Call of Duty Cold, it is one of the biggest things they’re getting out of this.

00:06:58:10 – 00:07:06:08
Sam
Activision isn’t publishing a whole lot now, but it’s primarily a Call of Duty machine, but we’ll get back to Call of Duty now. I’m sure that was an important whatever that was.

00:07:06:19 – 00:07:07:04
Joseph
Not all.

00:07:08:10 – 00:07:23:20
Sam
We’ll get back to Call of Duty later on, because it is something that I think deserves its own segment just because of how much money they’re making of it. But another important note is that King King, the development studio The Candy Crush People, gives Microsoft a big foot in the mobile gaming market, which they didn’t really have

00:07:23:20 – 00:07:35:19
Sam
before. They have their xCloud, which too they’re allowing you to play X-Box games on your phones, but in terms of game specifically developed for mobile. Microsoft didn’t really have something like that, except for, you know, there was a lot Spartan assault.

00:07:35:19 – 00:07:37:01
Sam
There was a couple of Halo games that were.

00:07:37:08 – 00:07:37:25
Joseph
Not even worth.

00:07:37:25 – 00:07:38:17
Sam
Mentioning. Yeah.

00:07:39:04 – 00:07:48:04
Sam
Yeah, which you can also play on console now anyway, but it’s where Tencent dominates. So we’re going to see if you know, Microsoft acquiring this, are they going to try to go after Tencent in that mobile gaming market?

00:07:49:18 – 00:07:58:18
Sam
But yeah, this is a broad umbrella. Look at it. This is the kind of big overview. We’ll get into some of the details in just a bit. But were there any thought you wanted to add just big picture about this acquisition?

00:07:58:26 – 00:08:00:27
Joseph
Yeah, I mean, consolidation in the game.

00:08:00:27 – 00:08:12:11
Joseph
Industry really isn’t new, and that’s what a lot of people are concerned about with this. You know, for the past four or five years, we’ve seen gaming studios gobble each other up. You know, left and right. Epic acquired Tonic in 2021.

00:08:12:22 – 00:08:22:09
Joseph
EA went on its own buying spree, picking up BioWare and all the other known studios in the last, you know, five or six years. What’s significant with Microsoft.

00:08:22:09 – 00:08:24:06
Joseph
Is that they’re not just a game studio.

00:08:24:14 – 00:08:24:19
Sam
Hmm.

00:08:24:27 – 00:08:32:24
Joseph
They’re a platform and a hardware manufacturer. So that’s that’s what’s got a lot of people concerned is that they can lock up a lot of exclusives with this.

00:08:32:27 – 00:08:33:13
Sam
Yeah, exactly.

00:08:33:21 – 00:08:35:16
Joseph
But even the exclusives aren’t.

00:08:36:01 – 00:08:58:01
Joseph
That concerning because Sony’s had exclusives, you know, for decades now. You know, their their entire intellectual property. When Sega liquidated their Dreamcast and their gaming systems, they basically sold off their intellectual property to Microsoft. They divided up between Microsoft and Sony and each got a couple of pieces of that property.

00:09:00:00 – 00:09:11:18
Joseph
But like I said before, the deal’s full impact won’t be felt for a few years because of a number of existing licensing agreements. And, you know, a lot can change in three or four years in the gaming industry.

00:09:11:27 – 00:09:25:03
Sam
That’s true. Yeah, you’re going to see these Z studios shift. I mean, a lot of these studios have big games waiting to come out. You know, we have Overwatch two. Overwatch one coming out in 2016. We’ve yet to see we’ve seen a ton of gameplay of Overwatch two, but it’s kind of one of those ones that Blizzard

00:09:25:03 – 00:09:36:24
Sam
has in their back pocket that the country’s waiting to drop probably a guaranteed hit. Because, you know, the overwatch. I’m part of the Overwatch fanbase. It’s a it’s a big, a big fan base, but we’re hoping to see that soon with this acquisition as well.

00:09:37:08 – 00:09:41:05
Sam
But let’s get we’ll take a short break. We’ll come back and get into the nitty gritty details.

00:09:49:07 – 00:10:13:16
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00:10:51:24 – 00:11:07:29
Sam
Welcome back, everyone, to episode 16 of insights into tomorrow or today, we’re talking about the Microsoft acquisition of Activision and Blizzard. So getting into the details here, Activision Blizzard has been making some questionable management decisions in the last few years, and this is something I wanted to put right at the top just so we can kind of

00:11:07:29 – 00:11:22:08
Sam
get it out of the way because it is. There is some controversy there that I think is worth talking about, mainly from Bobby Kotick, the Activision Blizzard Inc. chief executive officer or a CEO. This is from Bloomberg, from Devon Pendleton and Scott Carpenter.

00:11:22:21 – 00:11:43:03
Sam
Activision CEO is looking at a 375 million dollar payout in the Microsoft sale. So Bobby Kotick will be getting his his payout from this, and we’ll get into sort of his behavior and why that is controversial. I think last year, Activision Blizzard Inc chief executive, Kojak, he received a 50% pay cut.

00:11:43:24 – 00:12:01:16
Sam
This year, he’s up for a $375.3 million windfall before taxes. Now, Kotex Time as CEO has been marked by a leader whose recent tenure has been more or just repeated myself in the notes here. But his tenure has been marked by employee complaints over sexism, a hostile work culture and mismanagement of assault claims.

00:12:01:22 – 00:12:20:14
Sam
That’s kind of the big thing here, why he’s kind of had a negative light on him. Pretty much his entire time at Activision as CEO as recently as November, he was a target of employee walkouts and petitions demanding his removal over reports he failed to meet the company’s board, aware of allegations of rape and other serious misconduct

00:12:21:11 – 00:12:39:26
Sam
. Now, since being CEO in 2017, Kotick owns almost 4 million shares of Activision. This is the most of any officer or director, according to their filings. The second largest holder is Board Chairman Brian Kelley, who owns 1.4 million through trust and foundations, which his stake is at a value of 137 million.

00:12:40:10 – 00:12:48:11
Sam
Based on this deal. So that’s where a lot of this money is coming from. Now, were you aware of a technologies from any kind of press you might have heard about?

00:12:48:11 – 00:12:52:26
Joseph
I don’t know how you could not have been with all the all the negative press that he had.

00:12:52:27 – 00:12:53:05
Sam
Yeah.

00:12:53:20 – 00:12:56:27
Joseph
When the deal itself cut, it was interesting.

00:12:56:27 – 00:12:59:23
Joseph
The companies have been kind of playing the fate.

00:12:59:24 – 00:13:02:22
Joseph
Of Kotick a little loose, a little close to the vest.

00:13:03:26 – 00:13:07:01
Joseph
They only said that he’s going to remain CEO through the.

00:13:07:01 – 00:13:12:26
Joseph
2023 fiscal year for Microsoft, which ends June 30th, 2023.

00:13:13:14 – 00:13:16:12
Joseph
What is interesting he he’s quoted himself.

00:13:16:12 – 00:13:19:08
Joseph
Saying, is he’ll be available if needed, right?

00:13:19:14 – 00:13:24:20
Joseph
And I don’t think he’s going to get too many callbacks. No, but even if he doesn’t. In addition to the.

00:13:24:21 – 00:13:25:26
Joseph
Stock buyout that he.

00:13:25:26 – 00:13:27:24
Joseph
Gets, he has an employment.

00:13:27:24 – 00:13:31:13
Joseph
Contract that entitles him to a severance package worth.

00:13:31:13 – 00:13:32:28
Joseph
293 million.

00:13:32:28 – 00:13:41:21
Joseph
Should he lose his job as a result of a corporate takeover. So this guy is walking away with well over half a million, half a billion dollars as a result of this.

00:13:41:26 – 00:13:51:14
Sam
Yeah, and that’s one of the things you kind of hate to see come out of this, right when we get into that discussion of corporate consolidation is that, you know, the bad guys, the flow to the top often get away.

00:13:51:20 – 00:14:04:15
Sam
You know, arguably better off than they were before. Yeah. If they’re going at all, even, you know, Microsoft, like you had said, were very wishy washy about it because that was one of the things, you know, you think, Oh, great acquisition, OK, what happens with Bobby Kotick?

00:14:04:15 – 00:14:15:20
Sam
Are we getting this guy out of here? Because it’s it’s something that’s pretty much universally agreed upon is that he is not a great manager. And you know, these these sexual assault allegations and employee walkouts, the hits just kept common.

00:14:15:27 – 00:14:23:16
Sam
And it was, you know, it’s an interesting decision for Microsoft to say, OK, we’re going to keep the guy around. But is that because we don’t want to have to pay out $250 million?

00:14:23:17 – 00:14:24:22
Joseph
Right, exactly.

00:14:25:09 – 00:14:45:13
Sam
But Kotex compensation was controversial even before California’s Department of Fair Employment and Housing sued the videogame publisher in July, detailing a retaliatory quote frat boy culture. Earlier, the company announced it was slashing Kotex 2021 salary and bonus in half in response to criticism his pay package was excessively lavish compared with his peers.

00:14:46:08 – 00:14:54:15
Sam
A Kotick was also found in Jeffrey Epstein’s black book, in which he used his company email address. And that’s not a great look.

00:14:54:22 – 00:14:57:02
Joseph
That doesn’t help you or the company at that point.

00:14:57:03 – 00:15:02:29
Sam
No, I mean, it’s it’s yeah, because I don’t know why you would use your company email address. The hubris.

00:15:02:29 – 00:15:05:14
Joseph
I don’t know why you’d be involved with him in the first place.

00:15:05:15 – 00:15:19:18
Sam
True. Yeah, but that’s just one of the issues with Activision Blizzard. There are other problems as well in terms of union busting. This comes from Ethan Gak. I hope I’m pronouncing your name right. Ethan from Kotaku called Duty Maker reveals plan to squash union effort.

00:15:19:18 – 00:15:41:18
Sam
Activision Blizzard calls for studio wide vote after refusing to voluntarily recognize Raven Cue a union A Raven is one of the studios under Activision Blizzard acquired in this acquisition, but this comes from the Kotaku article quote. 34 staff from Ravens Cube Department revealed recently that they were organizing with the communications workers of America to unionize, which would

00:15:41:18 – 00:15:55:01
Sam
have been an unprecedented step for developers and a major gaming company. They called on Activision Blizzard to voluntarily recognize the union, which had supermajority support within the. Apartment. Now this is where we get into company policy from Blizzard.

00:15:55:23 – 00:16:08:25
Sam
Their policy essentially boils down to when a company refuses to voluntarily recognize union. The organizers behind it must win a majority in an election ratified by the National Labor Review Board. Now, this would be a huge hurdle for the folks over at Raven.

00:16:09:21 – 00:16:25:14
Sam
That would have been sorry, a hurdle that would have been easy for GM workers allies to overcome within just the shoe department because you have a very small section of employees or in very easily get a majority. But requiring all employees at Raven to have a say, Activision Blizzard is effectively arguing that either the entire studio, not

00:16:25:14 – 00:16:36:29
Sam
just the shoe department but the whole studio freedom unionize or no one does. And that’s kind of where you get into these. These are wordsmith, sort of, you know, how we’re going to use technicalities to kind of break up these unions.

00:16:36:29 – 00:16:37:23
Sam
How do you feel about them?

00:16:38:04 – 00:16:38:15
Joseph
Well.

00:16:38:24 – 00:16:51:03
Joseph
I think that’s one of those things where one, you’re not going to you’re not going to win against a union at this point in time. All these. I mean, if Amazon itself is fighting against the unionization of their facilities.

00:16:51:15 – 00:16:53:10
Joseph
And losing, yeah, Blizzard’s.

00:16:53:10 – 00:17:04:06
Joseph
Not going to win. And second, if you’re trying to force the entire company to unionize rather than just a department, you’re shooting yourself in the foot right there because all you’re going to do is piss off all your employees.

00:17:04:07 – 00:17:07:14
Joseph
Then they’re all going to unionize and then you’re really screwed in the end.

00:17:07:29 – 00:17:23:06
Sam
Yeah, but Blizzard had another response to this. This comes from Nicole Carpenter over at Polygon. The situation developed even more back in November. Quote This is from a company statement. In November, we began the process to convert our temporary employees to full time employment status.

00:17:23:20 – 00:17:37:05
Sam
This comes from Raven Software Studio head Brian Raffel in an email to staff. He goes on to say, Now I’m excited to show that our colleagues will embed directly within various teams across the studio, including animation, art, design, audio production and engineering.

00:17:37:17 – 00:17:51:19
Sam
In the email, Raffel said The move to our embed, our team has been in the works for several months now. This is splitting up of the team that was trying to unionize comes just six weeks after they were ah, they were coming off a six week work strike.

00:17:52:05 – 00:18:05:03
Sam
This makes unionization even more difficult, so these folks go on strike for the union. They come back. The career department is split up among all different parts of raven, making it even more difficult to effectively unionize, do you think?

00:18:05:12 – 00:18:12:13
Sam
Now, according to travel here from Raven, they say this is in the works for several months. Do you buy that or just a little too much of a coincidence for you?

00:18:12:18 – 00:18:22:11
Joseph
I there’s probably a grain of truth in there because. These guys, as monumental.

00:18:22:12 – 00:18:25:12
Joseph
As some of the mistakes are that they’re making, they’re not stupid.

00:18:25:17 – 00:18:25:25
Sam
Right?

00:18:26:00 – 00:18:40:01
Joseph
And when they started getting whispers at the QE department was going to euthanize the first way to do that is to liquidate your QE department and dissolve it into everyone else who’s not going to unionize. So I’m sure there’s probably plans for it.

00:18:40:10 – 00:18:49:06
Joseph
I think the strike force their hand and require them to to basically pull the trigger on that decision. Yeah. I don’t think they had much of a choice there.

00:18:49:15 – 00:19:08:15
Sam
Yeah. And this, you know, as we’re kind of alluding to here, this the timing of these events is certainly interesting is the speculation is that is this acquisition of Microsoft purchasing Blizzard? You know, with the hype moments of having all these franchises coming to Microsoft, is that meant to overshadow the the the bad PR that Activision Blizzard

00:19:08:15 – 00:19:17:19
Sam
has been getting for like five years now? Pretty much everything there was. Even the thing with Blizzard. I don’t know if I have it in the notes here, but where the controversy with China, where they were censoring the Hearthstone player?

00:19:17:20 – 00:19:29:15
Sam
Yeah, when he was protesting China, and that was like huge news for like weeks and it was all negative PR for Blizzard. And, you know, it’s kind of interesting. Sometimes you have to wonder, you know, the CEO or the higher ups over at Microsoft.

00:19:29:26 – 00:19:34:17
Sam
Was there a thought of, you know, is this too many bad apples is? Is this too much of a bad PR move?

00:19:35:07 – 00:19:36:09
Joseph
And I think there’s little.

00:19:36:09 – 00:20:00:01
Joseph
Doubt that Microsoft is buying damaged goods. Yeah. As far as the reputation of the company goes, the products they put out are solid. Microsoft’s already looking to do damage control on the bad image. I had found a Wall Street Journal article where Sabina mentioned who’s the president of global investigative firm Nadella and company.

00:20:00:23 – 00:20:01:04
Sam
Says.

00:20:01:13 – 00:20:20:21
Joseph
There’s definitely more diligence being done, particularly diligence being done around bad behavior on the part of Microsoft doing their due diligence. She said not only sexual harassment or misconduct, but bullying and other types of behavior. Companies are a lot less tolerant, Microsoft being that Microsoft knows that they’re going to get a lot.

00:20:20:21 – 00:20:20:29
Sam
Of.

00:20:22:19 – 00:20:41:00
Joseph
Press and attention, and they realize that their own reputation is on the line here. So the last thing a company like Microsoft wants is to inject itself with a cancer ously bad culture that’ll eat away the rest of the company or, you know, certainly more company profits than anything else.

00:20:41:00 – 00:20:46:01
Joseph
So Microsoft’s not stupid in this acquisition. They kind of knew what they were getting.

00:20:46:12 – 00:20:54:08
Joseph
Which is why I’m pretty sure they’re so aloof when it comes to what the management of Blizzard is going to wind up looking like after all this.

00:20:54:15 – 00:21:08:09
Sam
Yeah, you know, you want to be optimistic, right? You want to say they’re being acquired. Maybe we’ll get some management management shakeups. You know, we’ll improve the culture, but especially when it comes to the gaming industry, the culture of crunch, when you have to get the game out and your work in, you know, double to triple the

00:21:08:09 – 00:21:20:17
Sam
hours that are are healthy and you know, you’re getting harassed at work, it’s something that is all too common, especially in the gaming industry. So we’re you want to hope that things will get better, but only, you know, time will tell, especially with something as big as this.

00:21:20:17 – 00:21:23:26
Sam
It’s going to take years to see if there are any changes, what they might.

00:21:23:27 – 00:21:25:01
Sam
Be. Well, and.

00:21:25:01 – 00:21:43:15
Joseph
Honestly, historically, Microsoft doesn’t have its the best reputation with its game developers. It had a really rocky relationship with bungee back when Bungee was developing Halo for them. Yup. So that was kind of a caustic environment there, not nearly as bad as what Activision Blizzard had, but you know, it is.

00:21:43:15 – 00:22:00:05
Joseph
It’s it’s a high stress environment. You know, I’ve worked in development environments doing application development. Game development is on a whole different level. You’ve got deadlines that are right off the bat, unrealistic deadlines that are being set by salespeople, not set by engineers.

00:22:00:22 – 00:22:07:02
Joseph
And you’re driven to the point of collapse by the time the end of the project rolls around.

00:22:07:08 – 00:22:16:02
Sam
Yeah, you know, we’re still seeing the effects of COVID all this as well. You know, a lot of these studios had to completely shut down and send everybody home with all their equipment, which, you know, we’re seeing that with games.

00:22:16:02 – 00:22:26:03
Sam
I mean, you know, probably the biggest one is Halo Infinite, Microsoft’s arguably biggest title in years. Got to leave a whole year, you know, to make the game ready to currently.

00:22:26:04 – 00:22:29:01
Joseph
Needed to be delayed another couple of months before launch.

00:22:29:01 – 00:22:31:16
Sam
But well, yeah, there’s still stagger in that content.

00:22:31:25 – 00:22:36:14
Joseph
They’d laid it for a year and then released 70% of the games. Yeah, and 30% of it was bugged.

00:22:36:20 – 00:22:37:01
Sam
Yeah.

00:22:37:20 – 00:22:43:12
Sam
I don’t know. When it comes to things like that, it’s on as a bit of an aside. I would I would rather it just take longer. Just so, you know.

00:22:43:17 – 00:22:56:19
Joseph
Early on the same way, I, you know, I play in a game that’s owned by email now, Star Wars the Old Republic. They had a major content drop that was supposed to happen right after the first of the year, and they had to push it out another month.

00:22:57:15 – 00:23:03:19
Joseph
And it’s like, it’s OK, I’m all right waiting for that because I’ve lived through content drops that weren’t ready.

00:23:04:03 – 00:23:05:09
Joseph
And it made the game just.

00:23:05:09 – 00:23:09:24
Joseph
Completely unplayable for a month or two while they went back to the drawing board and fixed.

00:23:09:24 – 00:23:10:08
Sam
It. Yeah.

00:23:10:22 – 00:23:13:05
Joseph
You know, I’d rather stay with the old content.

00:23:13:05 – 00:23:13:24
Joseph
And.

00:23:13:24 – 00:23:15:22
Joseph
Live with it, but still be able to play.

00:23:15:22 – 00:23:16:09
Joseph
The game.

00:23:16:23 – 00:23:17:28
Joseph
Until it’s ready to go.

00:23:18:03 – 00:23:30:26
Sam
And that’s not even, you know, the quality of the games and what you’re dropping. The kind of content you’re dropping is important, but giving it more time also allows the people making this content to not necessarily have to crunch and to have more time to to work on it at a healthy pace.

00:23:31:05 – 00:23:43:08
Sam
And I think that’s a lot of the reason we’re seeing the delays as well. So hopefully we’ll see some, some more positive management decisions, but unfortunately only time will tell on that. Excuse me. But another big aspect of this is games pass.

00:23:43:14 – 00:23:55:19
Sam
Now, for those you that might not know, Xbox Games Pass is basically the Netflix of gaming. It’s the thing that everybody calls it, and I’m sure they’re going to. They might already have that as like their official slogan, but if they don’t, they should.

00:23:57:06 – 00:24:06:10
Sam
But basically, you pay a set fee every month. I think if you get the Games Pass Ultimate, which includes your Xbox Live Gold, which allows you to play online, what’s at once a month, I think.

00:24:06:12 – 00:24:07:29
Joseph
Something like that. Yeah, yeah.

00:24:08:25 – 00:24:23:13
Sam
But around that price, and you can basically download the library of games, which is like 100 some games. Yeah, available to play. Now you also get first party Xbox Studio Games, day and date Xbox games with gold, EA Play as well, getting a lot of titles in there.

00:24:24:07 – 00:24:34:14
Sam
And there’s also game space for PC, so you don’t even have to have an Xbox to access a lot of these things because you can get it all through games versus a PC, which is a recent addition, but definitely a huge, huge get.

00:24:34:27 – 00:24:40:19
Sam
Which also ties into this acquisition because a lot of these games from Blizzard are primarily on PC.

00:24:40:20 – 00:24:41:00
Joseph
Yeah.

00:24:42:12 – 00:25:02:08
Sam
But some numbers for you about Microsoft Games Pass. This comes from Tom Warren over at The Verge quote. Microsoft Game Pass Service now has 25 million subscribers, which is up from 8 million Microsoft reported in January of last year. So in just a year, you’re adding 7 million more subscribers, and that’s in a year where you acquire Bethesda.

00:25:02:17 – 00:25:14:15
Sam
You get the deal through swing at EA Play, you get games pass on PC. That’s all in a year, and it makes sense why they’ve got 7 million more people on board. Sure. And that’s not even accounting to the Xbox first party studios.

00:25:15:03 – 00:25:24:14
Sam
Those games that came out like Halo. And I’m trying to think some other ones there was there was Rainbow six, but I don’t think that’s that’s another big game on game space. It’s not an Xbox exclusive bug room.

00:25:25:01 – 00:25:39:20
Sam
So you had a couple of games drops as well to kind of justify those higher numbers. Xbox Games Fest is shifting how gaming companies look at revenue models. It’s kind of changing the whole industry. It’s it’s changing it from being you pay 60 to $70 for a game the day it comes out.

00:25:39:27 – 00:25:51:06
Sam
You have a physical desk, you play it and that’s it. Now we’re kind of shifting to a more ever changing thing where you have a library of digital games that you can then download, which some people aren’t for because they rather have that physical media.

00:25:51:17 – 00:26:02:05
Sam
Personally, I don’t mind except for when it comes to storage, because I know you have there’s two different models of the newest Xbox out now, right? There’s one that has a disk drive and one that doesn’t. You have the nondescript one?

00:26:02:05 – 00:26:05:08
Sam
Do you ever run into the storage issues with, you know, having to download everything like that?

00:26:05:16 – 00:26:09:24
Joseph
I don’t and I have I have the internal storage.

00:26:10:18 – 00:26:26:18
Joseph
I have the external and VM card storage. Plus I offload a good chunk of the games to the slower USB drive on there. So I’ve got plenty of storage. Is only the newest latest greatest games need to be played on the faster storage.

00:26:27:01 – 00:26:40:28
Joseph
So they’ve provided enough options that it’s manageable and I’m not too worried about it and I download all the games anyway. I mean, I couldn’t tell you last time I went to a GameStop or someplace else to buy a physical piece of media for the for the game.

00:26:41:02 – 00:26:52:08
Sam
Yeah, absolutely. I’m the same way I have because I download everything. The second comes the Game Pass. I’m downloading at the play just because I love video games. And you know, I think this is a great, you know, this isn’t an ad for games best, but it is.

00:26:52:08 – 00:27:02:07
Sam
I think it’s the best value in gaming because if you’re someone that doesn’t necessarily want to commit to that 60 dollar purchase, you get games best and have over 100 games available to play like that. Yeah. And you know, you run really.

00:27:02:11 – 00:27:04:01
Joseph
Not like that. You do with the download.

00:27:04:01 – 00:27:13:22
Sam
Yeah, that’s what I was about to say. Yeah, there is the issue. You know, if you don’t have the best internet connection or if you don’t have the money to shell out for an external hard drive or things like, then there are some barriers to entry there.

00:27:14:19 – 00:27:26:00
Sam
But you can still only download one game at a time. And you know, the Xbox can handle that if you’re able to download eventually. But like I was saying, this game’s fast is shifting how game companies are looking at the revenue models going forward.

00:27:26:16 – 00:27:37:22
Sam
Sony is looking to compete with its peers now service. It is similar to games past, but not nearly as effective in the marketplace. And a big reason for that is because with us now, I don’t think you can download the games.

00:27:37:22 – 00:27:38:21
Sam
I think you have to stream them.

00:27:38:21 – 00:27:40:00
Joseph
Streaming live.

00:27:40:06 – 00:27:42:29
Sam
Which even with a good internet connection, you can tell.

00:27:43:04 – 00:27:43:22
Sam
Yeah, well.

00:27:43:22 – 00:27:45:20
Joseph
It means you can’t. There’s no way you can.

00:27:45:20 – 00:27:47:10
Joseph
Get around with the technology we have today.

00:27:48:09 – 00:27:50:07
Joseph
You can’t get around latency and latency.

00:27:50:07 – 00:27:55:26
Joseph
Especially if you’re playing like a first person shooter or something like that. Latency is going to kill you every time.

00:27:55:29 – 00:28:01:07
Joseph
There’s no way you can. Around the physics of you’re trying to send a bit of data.

00:28:01:07 – 00:28:07:14
Joseph
From your network all the way across the internet to some server somewhere else and might not even be your region.

00:28:09:13 – 00:28:12:13
Joseph
You physically, even if you are using fiber.

00:28:12:13 – 00:28:25:02
Joseph
Optics all the way, you’re limited by the speed of light and there is, you know, people don’t realize it, but there’s a limit to the speed of light when you’re trying to go across the country where when you’re trying to bounce a signal off a satellite.

00:28:25:02 – 00:28:25:10
Sam
Mm-Hmm.

00:28:25:20 – 00:28:38:14
Sam
And talking about those online only services, Xbox does have xCloud, which allows you to stream games from your console to your either your phone or tablet or something like that. And they have made significant improvements to that in terms of dealing with latency.

00:28:38:20 – 00:28:45:20
Sam
But still, if you’re playing like is said, a first person shooter or a fighting game or a racing game, something that is online multiplayer, you’re going to notice that regardless.

00:28:45:21 – 00:28:47:26
Joseph
You know, single player games are usually pretty okay.

00:28:47:26 – 00:28:51:24
Joseph
With it, but don’t try to do anything competitive in player versus player. Yeah.

00:28:52:12 – 00:29:09:06
Sam
But Sony is looking to beef up their peers and now services comes from Jonas McKee over a gamer actor called the creator of PlayStation four and five. Mark Cerny has filed a patent via USPTO for quote backward compatibility through use of spoofed clock honor that is and fine grained frequency control.

00:29:09:06 – 00:29:26:04
Sam
So basically, you know, Sony’s got some some patents on the book for backwards compatibility, so it leads people to speculate that they are going to try to incorporate some more, you know, PS3 games and PS4 games into peers now to try to make it compete with games past, while also maybe throwing in your SP+ plus, which is

00:29:26:04 – 00:29:37:22
Sam
the equivalent of Xbox games or X-Box gold. Basically, the online component kind of rolling it all into one package, just like you have here with games fast. Do you think that would be as effective as Microsoft’s Game Pass?

00:29:38:24 – 00:29:41:27
Joseph
It has the potential. I think the problem you run into is the game.

00:29:41:27 – 00:29:45:02
Joseph
Services is an area where PlayStation is playing catch up.

00:29:45:15 – 00:29:50:04
Joseph
Microsoft is leaps and bounds. They’re there ten years.

00:29:50:04 – 00:30:10:13
Joseph
Ahead of PlayStation. When it comes to this, this service and this ability Microsoft abandoned, or I’m sorry, PlayStation really abandoned their backwards compatibility is a serious concern. Years ago, you know, as they were moving past the PC to PS3, they didn’t really worry about supporting backwards compatibility.

00:30:10:28 – 00:30:11:19
Joseph
That was an.

00:30:11:19 – 00:30:14:20
Joseph
Area that Microsoft really cashed in on because.

00:30:14:20 – 00:30:17:07
Joseph
They knew all these people out there had this huge.

00:30:17:07 – 00:30:18:13
Joseph
Library of games.

00:30:18:29 – 00:30:19:07
Sam
And.

00:30:19:07 – 00:30:32:00
Joseph
They were going to be angry if they couldn’t play them, you know, moving forward. So Microsoft has been very good about that. And Microsoft, you know, just to talk real quickly about the technology that that they’re talking about here, the spoof clock.

00:30:32:15 – 00:30:49:05
Joseph
So the problem with the newer game systems is they run fast, right? There are newer processors, the faster clocks on the processors, and you need all that for the computation. The problem is when you try to run an older system on a clock that fast, it either doesn’t work at all or it works at a rate that

00:30:49:05 – 00:31:04:20
Joseph
you can’t play that game anymore. So what they do is they try to to clock down the processor on there so you can play it at the same speed as the old consoles. Well, Microsoft got around that by using virtual machines, which Microsoft brought in from their corporate world.

00:31:05:06 – 00:31:09:01
Joseph
So when you fire up, you know an old Xbox.

00:31:09:01 – 00:31:10:03
Joseph
360 game.

00:31:10:09 – 00:31:17:20
Joseph
It fires up a virtual machine and it runs in that virtual machine, completely self-contained in there and fully functional. So they’re not.

00:31:17:20 – 00:31:19:04
Joseph
Doing these gimmicky type.

00:31:19:04 – 00:31:21:12
Joseph
Things like PlayStation trying to do.

00:31:21:27 – 00:31:34:29
Sam
Yeah, absolutely. And I think that that is that is kind of a thing, right? That Xbox, when they announced that they were going to have 360 games coming to Xbox one at the time, people lost their minds because, yeah, obviously for the reasons you’re saying, people don’t want to lose all those games.

00:31:34:29 – 00:31:35:20
Joseph
You can go back and.

00:31:35:20 – 00:31:39:04
Joseph
Play original X-Box games now that they’re making it compatible.

00:31:39:05 – 00:31:50:28
Sam
Yeah, as a as a lifelong Xbox and PlayStation fan, it’s really, really cool to have access to those old games. Although I think they Xbox announced recently that the last batch of what’s going to be backwards compatible has been announced.

00:31:51:12 – 00:32:04:01
Sam
So we are seeing that hold, but it’s still a ton of games. Yeah. And you know, even one game would have made it, you know, over PlayStation in this and in this instance. But let’s get into another big aspect of this, which we kind of teased at the beginning of the show.

00:32:04:16 – 00:32:05:02
Sam
Call of Duty.

00:32:05:09 – 00:32:06:25
Joseph
Let’s take a break before we get into that.

00:32:06:28 – 00:32:07:10
Sam
All right.

00:32:16:23 – 00:32:34:29
Joseph
For over seven years, the second safe empire has been the Premiere Community Guild in the online game Star Wars The Old Republic, with a friendly and helpful active members. A weekly schedule of nightly events.

00:32:35:22 – 00:32:44:24
Joseph
Annual guild meet and greets in the the community, both on the web and on Discord. The second Sydney Empire.

00:32:44:29 – 00:32:48:15
Narrator
Is more than your typical gaming. We’re family.

00:32:49:25 – 00:32:53:13
Joseph
Joining us on the star forward server for nightly events.

00:32:54:03 – 00:32:58:12
Narrator
Such as operations, flashpoints, world boss funds.

00:32:58:27 – 00:33:00:11
Joseph
The Star Wars trivia.

00:33:01:06 – 00:33:09:14
Joseph
Old Lottery and much more. Visit us on the Web today at W W W Dot, the second sip.

00:33:09:15 – 00:33:11:07
Narrator
And fire dot com.

00:33:18:22 – 00:33:30:12
Sam
And we’re back with insights into tomorrow. Today we’re talking about Microsoft’s gaming monopoly. So like I said before, you know, I’m a little rambunctious. I thought I just plowed right through, but you know, we got bills to pay out to keep the lights on, so we had to run some ads.

00:33:30:28 – 00:33:41:05
Sam
But we’re back and we’re going to get into talking about Call of Duty. You know, it’s one of the biggest, the worthy enough that they decided to put it as part of their their banner here for the purchase.

00:33:42:00 – 00:34:02:05
Sam
But it is Activision’s probably their biggest game that they’re currently publishing. Once again called Duty Vanguard, which is the most recent addition in the franchise, was the best selling game of 2021. This comes from the NPD or the National Purchasing Diary panel that comes from its sales report for 2021 that called it the vanguard number one again

00:34:02:27 – 00:34:17:23
Sam
, which is interesting because it was critically panned and like Fan panned on what we would call that demographic, but nobody liked the game, but it was still the number one bestselling game, you know, and and that kind of speaks to why Call of Duty is such a valuable asset for now Microsoft to have in their pocket because

00:34:18:19 – 00:34:26:28
Sam
and I can speak to this as a Call of Duty fan that kind of hopped off the bandwagon after Cold War. The last entry called Rudy fans are dedicated.

00:34:27:12 – 00:34:28:14
Joseph
And fanatical, and.

00:34:28:20 – 00:34:43:06
Sam
Yeah, and they’re going to buy it. Regardless of what it is, people will preorder the next call of duty before it’s even announced what it is. Yeah. So when you acquire something like this, that’s that’s guaranteed money in your pocket and in a second will get into Microsoft now has a lot of these titles where the fan

00:34:43:06 – 00:34:51:22
Sam
bases are extremely rabid. But this comes from Eddie Mo Mac Cook over at GameSpot dot com. You know, that’s a shame.

00:34:51:22 – 00:34:52:23
Joseph
Just works ruining.

00:34:52:23 – 00:35:08:05
Sam
Yeah, Eddie Eddie. If you’re listening, I apologize. Change your name! The quote Vanguard was December’s best selling game of December and the full year, and the series has now been the bestselling game franchise for dollar sales for 13 years in a row.

00:35:09:11 – 00:35:12:24
Sam
How do you feel about that, because I could not believe that statistic when I saw it.

00:35:14:20 – 00:35:19:22
Joseph
Being a fan of Call of Duty for 13 years, I can totally understand it. You know, that’s the.

00:35:19:22 – 00:35:23:11
Joseph
one game a year. I don’t play games nearly as.

00:35:23:11 – 00:35:35:05
Joseph
Much as I used to, but the one game a year that I always look forward to is Call of Duty. And, you know, Call of Duty is not released by just one development group, either. You know, they come out each year.

00:35:35:05 – 00:35:51:15
Joseph
It’s a different group. It comes out with them. And it’s it’s funny looking at the dynamic and almost the personality that you get from game to game, but it’s a totally makes sense to me that you’re going to have a group of people that are that.

00:35:52:12 – 00:35:56:19
Joseph
Dedicated to because the big fan base for Call of Duty isn’t.

00:35:56:19 – 00:36:04:08
Joseph
The Oh, let’s just play through the scenario and be done with the campaign and be done with it. It’s that online, cutthroat, super competitive.

00:36:05:03 – 00:36:07:26
Joseph
You know, prestige thing 20 times.

00:36:07:26 – 00:36:14:11
Joseph
Getting all the bells and whistles and all the toys on my weapons and all the colors. That’s what it is. And it’s it’s a.

00:36:15:08 – 00:36:17:01
Joseph
It’s a reward based.

00:36:17:12 – 00:36:29:24
Joseph
System that they run on that keeps people addicted. You know, it’s almost like, like, you know, drug addiction where there’s always something for you when you keep playing, it’s not like you run the content and the game’s over.

00:36:30:05 – 00:36:33:23
Joseph
There’s such replayability with it, with the online PvP play.

00:36:33:27 – 00:36:46:12
Sam
Yeah, that’s not even factoring in called it a warzone, right? Which dropped, what, three or four years ago. But, you know, kind of became another another battle royale in that battle royale wheelhouse that is just a cash cow for the folks over at Activision.

00:36:46:12 – 00:36:59:17
Sam
Because, you know, it’s difficult for any game, especially a battle royale to break out and kind of make its name. But you know, you have the big three. I would say at this point you have Fortnite Apex Legends, which is also one by year and now called Warzone.

00:36:59:27 – 00:37:09:01
Sam
So it’s just interesting to think about how much money just Warzone alone is bringing in, which they’ve already said they’re going to continue that because of course they are. What? Why would they start winning you?

00:37:09:01 – 00:37:11:05
Joseph
It’s a, you know, it’s a golden goose.

00:37:11:05 – 00:37:21:16
Sam
Yeah, but something else I wanted to mention about the Call of Duty thing is that now part of this acquisition, Microsoft now owns Major League Gaming, and I don’t know for sure, but there’s got to be a Call of Duty tournament within LG, right?

00:37:21:17 – 00:37:22:18
Joseph
I’m sure there is. Yeah.

00:37:22:27 – 00:37:24:16
Sam
So now Microsoft has all that stuff in-house.

00:37:24:17 – 00:37:27:26
Joseph
I’m not nearly that good enough to to know where it is or how to play it.

00:37:27:26 – 00:37:39:25
Sam
But yeah, so no, Microsoft has all those they almost have. It’s, you know, the old paramount decision with movies back in the thirties. They have the the distribution, the manufacturers and distribution, manufacturing. And what’s the other one production production?

00:37:39:25 – 00:37:41:16
Sam
Maybe. I don’t know. There’s three things that, you know.

00:37:41:17 – 00:37:42:26
Joseph
Produce them they distribute.

00:37:42:26 – 00:37:52:06
Sam
And yeah, they have all these exhibition. That’s what it is like for movies when you go see in theater. But now they own the Xbox, I guess would be the movie theater at this point.

00:37:52:07 – 00:37:55:28
Joseph
And that’s really where that concern came from was that you’re not just looking at an.

00:37:55:28 – 00:37:56:25
Joseph
EAA buying.

00:37:56:25 – 00:38:00:03
Joseph
Up other development houses, you’re looking at.

00:38:00:21 – 00:38:01:06
Sam
The.

00:38:01:06 – 00:38:09:12
Joseph
People that bring this to your house that you play on their hardware. They’re now going to be a major player in producing the games.

00:38:09:12 – 00:38:11:28
Joseph
Themselves and locking up.

00:38:11:28 – 00:38:17:18
Joseph
Those games to a closed system. And that’s what scares a lot of people. Yeah.

00:38:18:12 – 00:38:32:28
Sam
For a little bit of context, here’s the top five games of 2021 you have called Duty Vanguard. Vanguard Call Duty Black Ops Cold War, which was the one before Vanguard, Madden, NFL 22, Pokémon, Brilliant Diamond, Shining Pearl and Battlefield 2042.

00:38:32:29 – 00:38:46:01
Sam
Now there’s some variation in the numbers there because I don’t think this accounts for digital sales, but regardless. four out of these five games Microsoft now technically owns, right? And these are, you know, semiannual titles. You know, Madden comes out every year and is another cash cow.

00:38:46:01 – 00:39:02:18
Sam
That’s that, you know, you talk about rabid fan bases, man is one of the biggest ones out there. And FIFA, you know, just the FIFA Ultimate Team alone is 1,000,000,000 dollar industry. And it’s just it’s insane that now Microsoft now has Call of Duty, the sports games, and just that alone could make any company rich for years

00:39:02:18 – 00:39:04:16
Sam
. But they’ve got they’ve got everything else to back it up.

00:39:05:19 – 00:39:11:12
Joseph
Ironically, the place that I think Microsoft is going to make the most money out of this in the short term is going to be mobile.

00:39:11:29 – 00:39:13:12
Joseph
Microsoft had no.

00:39:13:28 – 00:39:16:08
Joseph
Footprint in the mobile market itself now.

00:39:16:20 – 00:39:20:02
Joseph
And now they’re going to be probably second place in mobile games.

00:39:20:02 – 00:39:22:10
Joseph
At this point in time, just from this acquisition.

00:39:22:24 – 00:39:23:23
Joseph
That’s huge.

00:39:23:23 – 00:39:29:01
Joseph
Just the microtransactions associated with the mobile games. Huge cash cow for them.

00:39:29:03 – 00:39:42:03
Sam
Yep, because you have king with Candy Crush and I’m sure King makes other mobile games. I’m not too familiar with them, but you also have Diablo. Diablo Immortal is a huge mobile game that no one was particularly happy about when it got announced, but it might already be out or it’s coming out.

00:39:42:03 – 00:39:42:13
Sam
And that’s.

00:39:42:23 – 00:39:44:24
Joseph
When you can have games that.

00:39:45:00 – 00:39:50:24
Joseph
Are terrible games by all accounts, and they still make a fortune. You know you’re doing something right?

00:39:50:25 – 00:40:07:22
Sam
Yeah, I’m pretty sure when Diablo Mortal got announced, it was booed at E3. But yeah, but yeah, that’s another big mobile title coming out. You know, we’re going to see. I wouldn’t be surprised if we got a variation on, you know, Warcraft, the original Warcraft like the arts real strategy games ported to mobile.

00:40:07:22 – 00:40:10:04
Sam
Because in Starcraft, I think all these things could.

00:40:10:04 – 00:40:12:12
Joseph
They’re they’re they’re perfect for it.

00:40:12:13 – 00:40:26:07
Sam
Yeah, exactly. I think, you know, I would not be surprised at all. There’s also Call of Duty Mobile, which is, I think, you know, it’s still around, so it’s pretty successful. But you know, you’re exactly right. I think we’re going to see, you know, Xbox kind of maybe try to dominate this market assuming it can compete with

00:40:26:07 – 00:40:35:11
Sam
Tencent. That’s also counting xCloud, which you is, you know, you can play games mobile, which I think is really cool technology, especially if you’re someone that travels a lot.

00:40:35:12 – 00:40:36:03
Joseph
I have not had.

00:40:36:03 – 00:40:39:17
Joseph
A good experience. Not really. And it’s more because of the controls.

00:40:39:18 – 00:40:40:04
Sam
Oh yeah.

00:40:40:06 – 00:40:45:18
Joseph
You know, it’s really tough to play a console game on a tablet or a phone without having a proper controller.

00:40:45:19 – 00:40:57:16
Sam
Yeah, that’s that’s kind of been why I don’t use it often as well, because I have to hook up the controller to my phone and it’s like, Oh, you’ve kind of lost me that. But you know, if they’re if they’re going to double down on this mobile market, I could see them making, you know, a more and

00:40:57:16 – 00:41:03:03
Sam
easier to use interface or make games specifically for mobile that you don’t have to worry about translating that controller in.

00:41:03:04 – 00:41:05:28
Joseph
Long as Microsoft doesn’t try to make phones again, we should all be.

00:41:05:28 – 00:41:15:29
Sam
Okay. I had that Microsoft phone, by the way. I wanted that thing, and it was terrible. So, yeah, I think they learned their lesson there, but we’re going to take another quick break and we’re going to come back and talk more monopolies.

00:41:24:19 – 00:41:46:11
Narrator
Insights into entertainment, a podcast series taking a deeper look into entertainment and media. Are husband and wife, team of pop culture fanatics are exploring all things for music and movies to television and fandom. We’ll look at the interesting and obscure entertainment news of the week.

00:41:48:19 – 00:42:06:20
Narrator
We’ll talk about theme park and pop culture news. We’ll give you the latest and greatest on pop culture conventions. We’ll give you a deep dove into Disney, Star Wars and much more. Check out our video episodes at youtube.com.

00:42:06:20 – 00:42:19:00
Narrator
Backslash insights into things are audio episodes and podcast insights into entertainment dot com or check us out on the web at insights into things dot com.

00:42:26:23 – 00:42:41:06
Sam
We’re back with insights into tomorrow, episode 16, where we’re talking about Microsoft acquiring Blizzard. So we’ve kind of been leading up to this, this entire show, the discussion of Monopoly. What does this mean for? What does this mean, Jenny?

00:42:41:18 – 00:42:50:19
Sam
What does this mean for Microsoft monopolizing the games industry? Should PlayStation gamers be worried that they simply won’t be able to play some of their favorite franchises going forward ever? Any thoughts on that?

00:42:50:20 – 00:42:52:08
Joseph
Oh, they should not be worried at all.

00:42:52:13 – 00:42:57:02
Joseph
Sony just acquired Bungee and that huge catalog of games that.

00:42:58:05 – 00:43:00:05
Joseph
Bungee doesn’t have.

00:43:00:05 – 00:43:01:09
Sam
Destiny two, baby.

00:43:02:14 – 00:43:03:21
Joseph
Yeah, I’m kind of.

00:43:03:21 – 00:43:07:18
Joseph
Puzzled at the Sony response to this. It was almost like a Hey.

00:43:07:18 – 00:43:08:01
Joseph
We need to.

00:43:08:01 – 00:43:10:16
Joseph
Look like we’re still in the game here, so let’s buy something. Well, it.

00:43:10:16 – 00:43:27:26
Sam
Wasn’t a response because these deals take months. Sony, it’s a response in general to Microsoft’s, you know, acquiring Bethesda now this but the the acquisition game, the land grab in general, I think I don’t think it’s a direct response to this, but it is something that Sony is trying to flesh out their online presence because, you know

00:43:28:01 – 00:43:41:27
Sam
, you think Sony, you think single player narrative focused action, you know, adventure games, you have uncharted. Not anymore. But you know, the last of us got a war. All these things are Amazing Spider-Man. Yeah, all these things that are single player driven.

00:43:42:08 – 00:43:50:05
Sam
Sony really doesn’t have a foot in that multiplayer landscape like Microsoft does with things like, you know, Halo Infinite multiplayer, which is free to play, not exclusives.

00:43:50:05 – 00:43:55:02
Joseph
Now they’re banking on cross-platform licensing like Call of Duty and stuff like that.

00:43:55:02 – 00:43:55:10
Sam
Yeah.

00:43:55:19 – 00:44:14:00
Sam
But hopefully having Bungie, they can kind of flesh out that landscape, not just for Destiny two, but I think they announced another IP from Bungie kind of focusing in the multiplayer world as well. But Call of Duty has been confirmed to be multi-platform for at least the next three years, and I wouldn’t be surprised if do do

00:44:14:00 – 00:44:17:18
Sam
you think we’ll see a kind Xbox exclusive Call of Duty?

00:44:17:19 – 00:44:21:07
Joseph
Absolutely. Microsoft would be stupid if they didn’t.

00:44:21:23 – 00:44:32:19
Sam
Yeah, yeah, that’s kind of what I was thinking, too. Do you think they would try to split it up and have it be a single player only on Xbox multiplayer? Warzone everywhere else or Warzone everywhere else. Multiplayer single player only on Xbox.

00:44:32:22 – 00:44:34:05
Joseph
I think you’re going to see the whole thing.

00:44:34:05 – 00:44:36:20
Joseph
Just be on Xbox. Microsoft has very.

00:44:36:20 – 00:44:39:07
Joseph
Few bankable.

00:44:39:21 – 00:44:50:18
Joseph
Franchises that they can say are exclusives that they didn’t themselves create already. You know, you’ve got Halo, you’ve got what else do you have? I mean.

00:44:51:03 – 00:44:55:10
Sam
Gears of War, which unless they make another game, is not super vague.

00:44:55:10 – 00:44:56:22
Joseph
That’s kind of getting long in the tooth.

00:44:56:23 – 00:45:00:21
Sam
Yeah. Well, we’re on number six. five came out, but the next one would be number six.

00:45:00:21 – 00:45:02:00
Joseph
But Microsoft.

00:45:02:00 – 00:45:02:24
Joseph
Sony made.

00:45:02:24 – 00:45:12:03
Joseph
Their place in the gaming market with their exclusives, and they suck up all the exclusives is the problem. When Microsoft went to start doing exclusives, there was none left.

00:45:12:04 – 00:45:12:15
Sam
Yeah.

00:45:12:28 – 00:45:23:29
Sam
Well, I mean that too. And like the focus of Microsoft has never really been on making, you know, you don’t have those like it reminds me of like the nineties and 2000s where he had mascot games like Crash Bandicoot and Spyro.

00:45:24:04 – 00:45:37:03
Sam
Sony kind of has that now with Spider-Man. Horizon zero Dawn. You see these characters. You recognize them from PlayStation games. Microsoft pretty much only has Master Chief. Right? You can count Marcus Fenix and now Kate. I forget her last name from from Gears of War.

00:45:37:18 – 00:45:45:06
Sam
Those are iconic characters, but they’re not nearly as as beloved and as current as as a lot of your PlayStation single party players are.

00:45:45:06 – 00:45:45:29
Joseph
Characters, so.

00:45:46:01 – 00:45:46:22
Joseph
Seeing Call of.

00:45:46:22 – 00:45:49:13
Joseph
Duty go exclusive to Microsoft, I think is a no brainer.

00:45:49:16 – 00:45:51:29
Sam
Are we going to get a Call of Duty Halo crossover?

00:45:52:18 – 00:45:54:07
Sam
I hope not. I mean.

00:45:54:15 – 00:45:59:02
Joseph
It’s possible given the direction that they’ve gone with some of the Call of Duty stories.

00:45:59:02 – 00:45:59:12
Sam
Yeah.

00:46:00:07 – 00:46:16:28
Joseph
I wouldn’t put it past them if they think they can make money on it. I think I think us arguing whether or not Microsoft acquiring Blizzard Activision is a monopolistic move is difficult when they’re claiming they’re solidly claiming the third place slot.

00:46:17:05 – 00:46:17:14
Sam
Yeah.

00:46:17:26 – 00:46:19:06
Joseph
It’s really hard.

00:46:19:06 – 00:46:21:03
Joseph
To say you’re a monopoly when your third place.

00:46:21:05 – 00:46:40:15
Sam
Yeah, it’s just, I think, the biggest thing that frightens people in why they cry monopolies, because the the independent game studio landscape is dwindling quickly. And you wonder if there’s going to come a day where everything is either as Sony Studios or an Xbox Studios game and if we’re just going to lose that independent scene altogether.

00:46:40:22 – 00:46:43:26
Joseph
Well, you will. But it’s one of those things that’s.

00:46:43:26 – 00:46:59:16
Joseph
Self-sustaining because I can go into business for myself. I can take out $100,000 and start a studio run for three years, come up with something that’s marketable and then get a 100 time return on my investment, get bought out.

00:47:00:01 – 00:47:12:11
Joseph
So just as a as an entrepreneurial injector, those independent organizations are still going to continue going on there, if for no other reason than to be targeted for buyouts.

00:47:12:22 – 00:47:23:05
Sam
Yeah, you know, the more I think about it, it is a lot like movies where you had, you know, early movies were not owned by anybody, but then you had big studios like Warner Brothers and others. And then eventually that studio system was torn down.

00:47:23:12 – 00:47:34:14
Sam
And that’s why you get more independent films like In the Sixties and Seventies. Are we going to see this with gaming where, you know, these studios buy up, everybody? We get these, you know, a decade or two of all these exclusive console exclusive games?

00:47:34:21 – 00:47:44:13
Sam
And then do we have, you know, a kind of consumer pushback against that where we’ll go back to more independent publishers? Do you think Bill will settle into this studio? You know, grab up, grab a thumb.

00:47:44:13 – 00:47:47:00
Joseph
In the market never really allows.

00:47:47:25 – 00:47:56:00
Joseph
The polarizing effect of one or two companies to run things the the corporate industry.

00:47:56:01 – 00:47:57:02
Joseph
Tends to.

00:47:58:16 – 00:48:12:15
Joseph
Migrate in that direction. I mean, even if you look at like retail, for instance, so everybody vilified Wal-Mart because they they came into every town and they killed all the small, small mom and pop shops. And then what happened after that?

00:48:12:15 – 00:48:24:06
Joseph
Then Amazon showed up, and Amazon is now killing Wal-Mart. So now all of a small mom and pop shops like, well, you got to support your local businesses. So now there’s a big push for all the local businesses, all your little bookstores and everything else.

00:48:24:26 – 00:48:39:17
Joseph
So the market is going to regulate itself more than the government is. The government is going to try and regulate it for purposes of, you know, tax revenue and so forth. But the market doesn’t sustain monopolies very well.

00:48:39:20 – 00:48:40:01
Sam
Yeah.

00:48:40:23 – 00:48:55:26
Sam
Dialing it back a bit by owning all these, these yearly releases, the ones we had on earlier the Maddens, the call of Duty’s the Pfeiffer’s. Does Microsoft stifle competition? Because if you’re if you’re someone that is a casual gamer, right, and you only buy one game a year and that game is called duty and you own a

00:48:55:26 – 00:49:03:29
Sam
PlayStation, you know, is this something that Microsoft, whether it’s, you know, not a real monopoly, not a total monopoly? Are there some, some issues with it?

00:49:04:15 – 00:49:18:21
Joseph
Well, the competition does not survive off of those guys that buy one game a year, right? You know, the competition is is. It’s spurred on by market growth, it’s spurred on by market activity.

00:49:19:06 – 00:49:19:16
Sam
And.

00:49:19:16 – 00:49:23:03
Joseph
What you find now. The reason so many of these.

00:49:23:03 – 00:49:24:10
Joseph
Acquisitions are happening is.

00:49:24:10 – 00:49:27:08
Joseph
Because you have so many independent companies.

00:49:27:22 – 00:49:41:17
Joseph
That put out that one gem and everybody loves that for for six months and it makes a fortune. Well, and then you see someone like Microsoft Go gobble them up. Mm-Hmm. It’s not going to stop those guys from producing that.

00:49:42:00 – 00:49:47:13
Joseph
You’re still going to have all these small studios and individual efforts that are going to be putting out.

00:49:47:13 – 00:49:51:11
Joseph
Those brainstorms that you don’t get that level of.

00:49:51:11 – 00:49:55:14
Joseph
Innovation from a corporation like a Microsoft or a Sony.

00:49:56:04 – 00:50:02:20
Joseph
You just don’t get that kind of innovative design in and out of the box thinking this.

00:50:02:20 – 00:50:03:18
Joseph
This sort of stuff has.

00:50:03:18 – 00:50:05:28
Joseph
Been happening since the 1980s and.

00:50:05:29 – 00:50:14:08
Joseph
Through the nineties, where you get a couple of guys that start like you’ve probably heard of Sid Meier’s, right, you know, civilization pirates.

00:50:14:21 – 00:50:19:14
Joseph
He started there was a two man company. He started and they got huge.

00:50:19:14 – 00:50:31:26
Joseph
Than they were popular. And then when when they got bought out, they created micro pros and when when Mike or prose wound up getting bought out, he went and started another studio. And when that got bought out for AXS, he went and started it.

00:50:31:28 – 00:50:38:05
Joseph
So you’re not going to stop people like that who who can’t. I don’t want to see can.

00:50:38:05 – 00:50:53:16
Joseph
Operate in a corporate culture, but they don’t thrive in a corporate culture. They thrive in that small incubator type of environment. And they’re going to keep going there. They’re going to they’re going to build what they want will sell off to build the next great thing.

00:50:53:16 – 00:50:58:23
Joseph
They’ll sell it off to build the next great thing. And there’s hundreds of people like that that are out there.

00:50:58:24 – 00:50:59:17
Joseph
And in.

00:50:59:17 – 00:51:01:23
Joseph
Multiple industries, not just the game industry.

00:51:01:28 – 00:51:14:19
Sam
Yeah, it’s true. I mean, you know, it was something I was worried about because I think that just like with movies again, bring it back again. You have to have the independent element, right? Because if you’re if everything is studio mandated, it stifles creativity, at the very least.

00:51:15:09 – 00:51:24:01
Sam
So, you know, I do I do agree with you that I think we’ll see that independent scene will still be there. And it’s just a matter of, you know, when they make it big and get bought by Sony or Microsoft.

00:51:24:18 – 00:51:25:25
Joseph
And everybody wants, you know, the.

00:51:25:25 – 00:51:26:28
Joseph
Old saying in.

00:51:26:28 – 00:51:28:12
Joseph
The movies, everyone wants their 15 minutes.

00:51:28:12 – 00:51:30:03
Joseph
Of fame. Well, everybody.

00:51:30:03 – 00:51:33:07
Joseph
Wants their big break. Everyone wants their buy out here, so everyone’s.

00:51:33:07 – 00:51:33:26
Joseph
Still going to keep.

00:51:34:02 – 00:51:35:20
Joseph
Building the stuff independently.

00:51:35:25 – 00:51:50:29
Sam
Yeah, there was an example I thought of why you were making that comparison. Drink box studios. They made a game called Guacamole and guacamole, two side scrolling platforming action game. Really creative, really fun. Then they got bought by Microsoft, and they recently had a game come out called Nobody Saves the World, which was day and date on

00:51:51:00 – 00:52:05:09
Sam
game stands. But playing that game, you know, you worry a little bit that you’re going to lose some of the independent charm, but they didn’t. And so, you know, as long as Microsoft, if they’re going to, you know, Microsoft and Sony, if they’re going to buy these studios, if they can kind of remain hands off and still

00:52:05:09 – 00:52:10:25
Sam
let these guys work. And but just have it be, you know, maybe a conflict inclusive if it needs to be at the end of the day.

00:52:11:00 – 00:52:28:07
Joseph
But there’s a great example a bunch of fantastic small independent group. When Microsoft went to them with Halo, they did a fantastic job with Halo, knocked it out of the park. Microsoft bought them, ran them for a little bit, stifled their innovation, and then they went to breaking it off again as an independent group.

00:52:28:21 – 00:52:33:19
Joseph
Now they’re getting bought by Sony, so, you know, some people don’t learn their lessons, I guess.

00:52:33:19 – 00:52:46:09
Sam
Well, it’s also important to note that they were owned by Activision for like two years. I don’t forget how long, but they were owned until 2019 by Activision, which was also a terrible relationship, right? That they were treated terribly with and the fans hated it, and Bungie hated it.

00:52:46:11 – 00:52:49:06
Sam
I’m pretty sure Activision hated it. It was a bad time all around.

00:52:49:10 – 00:52:49:14
Sam
Yeah.

00:52:49:28 – 00:52:51:04
Sam
But but you can’t catch a break.

00:52:51:10 – 00:52:52:14
Joseph
BioWare same thing.

00:52:52:14 – 00:52:55:08
Joseph
BioWare had had a huge.

00:52:55:08 – 00:53:03:17
Joseph
Fan base of of rabid fans because of the philosophy that the owners had the quality of the product they put out. They get acquired.

00:53:03:17 – 00:53:05:08
Joseph
By IAEA basically.

00:53:05:08 – 00:53:13:10
Joseph
Waters. The entire thing down slaps their little formula for development on there. And it’s it’s it’s just a clone of what the idea is now.

00:53:13:11 – 00:53:14:06
Sam
Yeah, yeah.

00:53:14:07 – 00:53:28:20
Sam
Yeah, we can probably do a whole episode. And yeah, but they have similar corporate issues. But but yeah, again, going back to Microsoft in the monopoly, Microsoft, of course, we talked about it on a previous episode. They face criticism back in the nineties for its antitrust practices.

00:53:28:28 – 00:53:48:17
Sam
Are they heading down a similar path from mechanically over at the Verge? Quoting This gets into some of the details about the FTC. The Justice Department and Federal Trade Commission launched a joint effort to modernize antitrust enforcement, seeking comment on how the agencies can apply current law in cases against tech companies like Metta, which is formerly Facebook

00:53:48:23 – 00:54:04:03
Sam
and Google. The announcement came at a joint press conference from FTC Chair Lina Khan and Justice Department Antitrust Chief Jonathan Kanter, who described the move as a wide ranging enforcement modernization effort. So we did an episode a while back about tech companies and their monopolies.

00:54:04:11 – 00:54:12:27
Sam
And I think this is just another nail in the coffin of the FTC kind of getting wise to it and kind of changing legislation to to better combat. These deals, how do you think about that?

00:54:13:05 – 00:54:14:07
Joseph
Well, and I think the problem.

00:54:14:07 – 00:54:19:00
Joseph
You run into here is it’s a change of administration. It’s a.

00:54:19:00 – 00:54:21:05
Joseph
New FTC that.

00:54:21:05 – 00:54:24:23
Joseph
Has to kind of make a splash here that it’s anti monopolistic.

00:54:25:03 – 00:54:26:08
Joseph
So they need an example.

00:54:26:14 – 00:54:26:26
Sam
Right?

00:54:27:11 – 00:54:29:00
Joseph
So the advantage that Microsoft.

00:54:29:00 – 00:54:29:19
Joseph
Has, though.

00:54:30:01 – 00:54:33:19
Joseph
Is they’re not in the center of the.

00:54:33:27 – 00:54:38:01
Joseph
You know, the regulatory sniper rifle at this point in time.

00:54:38:19 – 00:54:39:24
Joseph
You’ve got two big.

00:54:39:24 – 00:54:42:22
Joseph
Companies out there that have really got everybody else’s attention.

00:54:43:07 – 00:54:44:16
Joseph
So I think it’s more.

00:54:45:05 – 00:54:59:16
Joseph
A matter of timing. I think if Microsoft plays this smart, they don’t rush this. They wait for Khan to get caught up in either a media witch hunt or a Google witch hunt and go after them.

00:54:59:27 – 00:55:02:09
Joseph
And I think the FTC is the Biden.

00:55:02:09 – 00:55:03:22
Joseph
Administration is looking for a win.

00:55:04:00 – 00:55:07:20
Joseph
Right? And if the big guys out there.

00:55:07:20 – 00:55:19:10
Joseph
To get that win on aren’t Microsoft, their Mehta and Google, so if they lock horns with one of them first, Microsoft will be able to get through without any real challenges, I think.

00:55:19:11 – 00:55:23:04
Sam
Yeah, definitely. And Met has already kind of taken a couple of hits recently.

00:55:23:05 – 00:55:24:23
Joseph
They’re not doing themselves any favors.

00:55:24:24 – 00:55:27:20
Sam
No, it seems like every week we’re getting they feel like the worst month ever.

00:55:27:27 – 00:55:32:06
Joseph
The fact that they even changed the name. I mean, that was just such a blatant attempt.

00:55:32:06 – 00:55:37:12
Joseph
To put lipstick on a pig there and hope the government didn’t recognize you’re the same evil company.

00:55:37:13 – 00:55:45:04
Sam
Yeah. Would they have their first mark or a quarter where they lost users and their revenue is down like they’re just vulnerable?

00:55:45:10 – 00:55:48:27
Joseph
Rehberg lost $20 billion on paper in one day.

00:55:48:28 – 00:55:49:09
Sam
Yeah.

00:55:50:05 – 00:55:54:29
Sam
So you’re right, if you’re looking for someone to make an example out of, it seems like Metta might be the better target.

00:55:55:07 – 00:55:56:01
Joseph
Well, and that’s.

00:55:56:01 – 00:55:57:00
Joseph
A thing, not.

00:55:57:00 – 00:56:09:24
Joseph
Even from a, you know, I hate to bring politics on this, but it’s not even just from a monopolistic standpoint. Mehta has a reputation from a perspective of influencing.

00:56:09:24 – 00:56:12:06
Joseph
Politics and in a negative.

00:56:12:06 – 00:56:15:20
Joseph
Way for Democrats, and when you’re facing a Democratic administration.

00:56:16:10 – 00:56:16:19
Sam
Who.

00:56:16:19 – 00:56:17:21
Joseph
Needs a win.

00:56:18:08 – 00:56:21:08
Joseph
You’ve made yourself a very easy target at that point.

00:56:21:11 – 00:56:41:28
Sam
Yeah, that’s a great point. I mean, that was it makes them certainly a. Like you said, a much bigger target. While the announcement spans markets, it specifically this goes back to the FTC. The task force of putting together it specifically questions how regulators should approach merger approval in digital markets, potentially setting new legal standards around data aggregation

00:56:42:05 – 00:56:59:10
Sam
. Inter poll interoperability that’s fair to say. I was going to say inter polarity, but doesn’t make any sense and market consolidation that can affect competition. So it’s really we’re seeing a bit of a a really unprecedented time for when it comes to these kind of laws because they have to change them for the digital market.

00:56:59:21 – 00:57:04:07
Sam
It’s it’s it makes you wonder where these things will go in, say, 20 years.

00:57:04:28 – 00:57:07:15
Joseph
The problem that you have is government is.

00:57:07:25 – 00:57:24:08
Joseph
The wheels of government are notoriously slow. They do not keep up with technology. They do not. Even from a medical standpoint, government regulation does not keep up with advances in technology, and they never it never will, because the bureaucracy itself doesn’t allow it.

00:57:24:25 – 00:57:27:21
Joseph
You know what? What would take a development company.

00:57:28:13 – 00:57:32:17
Joseph
You know, six months to put out a new piece of technology?

00:57:32:17 – 00:57:33:24
Joseph
It would take the government.

00:57:33:24 – 00:57:41:16
Joseph
For years to catch up to that between legislation and debates and subcommittees and all that stuff. So for the government itself, to be.

00:57:41:16 – 00:57:44:04
Joseph
Reactionary in situations like this is very.

00:57:44:04 – 00:57:50:18
Joseph
Dangerous from a regulatory standpoint. What the government needs to do is start looking at this from a per company.

00:57:50:18 – 00:57:51:28
Sam
Standpoint and.

00:57:51:28 – 00:57:59:08
Joseph
Look at it from an impact to the market and impact to the country and the citizens and everything else. Because only.

00:57:59:08 – 00:58:06:06
Joseph
Then can you react in a way that is slow.

00:58:06:06 – 00:58:18:26
Joseph
But effective. And I think what you run into is the reaction that you get now is it’s Oh, well, these guys are bad, so we have to do something about them. And legislation is never going to keep up with that.

00:58:19:01 – 00:58:30:08
Sam
Yeah. And it’s interesting, too, because we talk about how slow government moves, but these tech companies move lightning fast, you know, in terms of, you know, whether it be making acquisitions like this or by expanding their are spheres of influence.

00:58:30:18 – 00:58:43:04
Sam
So it’s almost like in oil and water in terms of how these these two entities operate. And you know, how does that impact legislation and how does that impact the amount of power of these tech companies are able to to, you know, consolidate and aggregate?

00:58:43:28 – 00:58:47:28
Sam
But, you know, as we’re coming to the end of the show, do you think this merger is going to go through?

00:58:48:07 – 00:58:50:20
Joseph
I think without a doubt, it’s going to go through, yes.

00:58:50:24 – 00:58:58:10
Sam
And do you think that it will? Do you think this will be a footnote in the FTC’s policy going forward when it comes to these kind of mergers?

00:58:58:14 – 00:59:06:12
Joseph
I don’t think it’s really going to get much scrutiny from the FTC. It’s not a questionable deal. We already talked about them becoming thorough. If they.

00:59:06:19 – 00:59:09:03
Joseph
If they were number one after this deal, I could.

00:59:09:03 – 00:59:10:03
Joseph
See it getting scrutiny.

00:59:10:21 – 00:59:11:29
Joseph
You can’t accuse them of.

00:59:12:00 – 00:59:14:08
Joseph
Being monopolistic when you’re number three in the market.

00:59:14:16 – 00:59:15:25
Joseph
It just doesn’t make sense.

00:59:15:25 – 00:59:16:04
Sam
Yeah.

00:59:16:24 – 00:59:21:25
Joseph
If the merger, you know, stepping out of the game industry for for a moment, if the merger.

00:59:21:25 – 00:59:22:20
Joseph
Between T-Mobile.

00:59:22:20 – 00:59:33:11
Joseph
And Sprint could go through because they were third place and that was part of the justification for that, then you already have a precedent set for it. So there’s very little chance that it’s going to get blocked.

00:59:33:17 – 00:59:43:09
Sam
Yeah, no, I absolutely agree. I think it will go through and you know, you were kind of at that stage where all this news broke and it was a it was a crazy month of hearing the headlines and what this means.

00:59:43:19 – 00:59:55:12
Sam
But we’re kind of at a point where now we kind of just hurry up and wait where we, you know, we see because this is going to these things take years to figure out what’s the real question is what are the things going to look like in five to ten years for Microsoft and for Blizzard?

00:59:55:14 – 00:59:56:28
Joseph
And that’s where you have to look, because.

00:59:57:03 – 00:59:58:08
Joseph
Even after this deal, so.

00:59:58:08 – 01:00:08:23
Joseph
Nothing’s going to happen for three to four years, five years from now, I think you’re going to find X. Xbox is going to be far more dominant.

01:00:08:23 – 01:00:10:14
Joseph
In the gaming scene. You know.

01:00:10:27 – 01:00:16:03
Joseph
PlayStation has traditionally always beat out Xbox as far as console sales and game sales.

01:00:16:27 – 01:00:18:08
Joseph
And I think it’s.

01:00:18:29 – 01:00:22:20
Joseph
If Microsoft doesn’t come out on top, it’s going to be a lot closer than it was.

01:00:23:28 – 01:00:26:11
Joseph
But the other thing you have to keep in mind.

01:00:26:11 – 01:00:30:19
Joseph
Is a lot of the reason why Microsoft isn’t first is Microsoft.

01:00:30:19 – 01:00:32:04
Joseph
Tends to shoot themselves in the foot.

01:00:32:04 – 01:00:36:06
Joseph
From a technology standpoint, from a marketing standpoint, you know, just.

01:00:36:06 – 01:00:40:00
Joseph
The fact that they can’t consistently name their consoles really.

01:00:40:07 – 01:00:41:25
Joseph
Confuses the hell out of people.

01:00:41:25 – 01:00:43:06
Sam
It’s a branding issue, right?

01:00:43:12 – 01:00:46:02
Joseph
It really is. Every time they come out with a new.

01:00:46:02 – 01:00:51:06
Joseph
Console, they try to reinvent themselves and it backfires every single time.

01:00:51:07 – 01:00:51:16
Sam
Yeah.

01:00:51:20 – 01:00:52:24
Joseph
So Microsoft has.

01:00:52:24 – 01:00:53:12
Joseph
Their own.

01:00:54:11 – 01:00:58:14
Joseph
Flurry of mistakes that they continuously make over and over again that really.

01:00:58:23 – 01:01:00:28
Joseph
Impede their ability to be dominant.

01:01:01:22 – 01:01:07:19
Joseph
Buying their way to dominance is a new strategy. But I don’t know if it’s necessarily going to work because you get.

01:01:07:19 – 01:01:09:25
Joseph
The same people making the same mistakes.

01:01:09:27 – 01:01:22:28
Sam
Yeah, I mean, you know, we talk about that strategy of buying, and it almost creates the image of Microsoft setting up all these dominoes that they’re just waiting to push down, you know, because we have the Bethesda acquisition Elder Scrolls six, a big game from Bethesda Starfield.

01:01:23:06 – 01:01:37:15
Sam
I believe Starfield was confirmed to be an Xbox exclusive. So again, we go back to that five to ten year, you know, benchmark. Is Microsoft going to have a decade where they’re just releasing, you know, hit title after hit title, which people kind of think that they were going to do now with Halo.

01:01:37:15 – 01:01:38:24
Sam
But that was kind of all they did.

01:01:39:01 – 01:01:41:25
Joseph
And that’s the thing you can’t just because you have an.

01:01:41:25 – 01:01:46:02
Joseph
Exclusive because people are going to want to play it. Yeah, that’s the problem you run into.

01:01:46:02 – 01:01:54:02
Sam
Yeah, and you get the opposite of that with Sony, where people are going to play those games because there’s a level of quality that is pretty much unmatched.

01:01:54:06 – 01:01:55:10
Joseph
Yes. And Microsoft.

01:01:55:12 – 01:01:56:26
Joseph
If nothing else.

01:01:57:06 – 01:02:10:05
Joseph
Has an infamous reputation of putting out poor quality code, whether it’s operating systems, Microsoft Office video game, it doesn’t matter. I mean, when.

01:02:10:05 – 01:02:11:15
Joseph
You and they just.

01:02:11:29 – 01:02:14:11
Joseph
This was another folly of their marketing department.

01:02:14:22 – 01:02:15:29
Joseph
They mark the.

01:02:18:04 – 01:02:24:13
Joseph
Red Ring of Death issue from the Xbox 360 by selling T-shirts with the Red Ring of Death.

01:02:24:17 – 01:02:24:24
Sam
Hmm.

01:02:25:03 – 01:02:33:29
Joseph
Now, if you haven’t been in the gaming industry for a while, the Red Ring of Death was when the office the Office for the Xbox 360 came out.

01:02:35:02 – 01:02:35:20
Joseph
They had.

01:02:36:06 – 01:02:36:12
Sam
A.

01:02:36:12 – 01:02:40:02
Joseph
Hardware issue, a fundamental. Hardware issue.

01:02:40:12 – 01:02:42:07
Joseph
That was causing the little.

01:02:42:07 – 01:02:54:18
Joseph
Xbox power ring to turn red and the game system basically became useless. And they stumbled on replacing that. It turned out actually turned out it was it was bad solder.

01:02:55:04 – 01:02:56:27
Joseph
So they were using.

01:02:57:21 – 01:03:13:04
Joseph
Code solder that was too fragile. So the solder points just from the motion of the fans and moving the thing around because the solder points the break. So they went back to the manufacturing process and they injected more.

01:03:14:29 – 01:03:19:27
Joseph
I think it was more letter or something into the conference off to soften the copper up. Well, and then.

01:03:19:27 – 01:03:20:11
Joseph
What happened.

01:03:20:11 – 01:03:21:28
Joseph
Was as you played the game over a period.

01:03:21:28 – 01:03:23:29
Joseph
Of time, the game system would heat up to the.

01:03:23:29 – 01:03:26:24
Joseph
Point that it would melt the and you get the problem.

01:03:26:24 – 01:03:27:05
Sam
Again.

01:03:27:14 – 01:03:30:00
Joseph
So they really for the first two years.

01:03:30:00 – 01:03:34:10
Joseph
Of the 360, they really flubbed the whole thing until they fixed the manufacturing issues.

01:03:35:03 – 01:03:35:29
Joseph
The fact.

01:03:35:29 – 01:03:41:18
Joseph
That they’re going to mark the release of the 360 by using the Red Ring of Death on a.

01:03:42:02 – 01:03:46:06
Joseph
Logo. Yeah, is just idiotic. Like, why would you do that?

01:03:46:07 – 01:03:53:24
Sam
Yeah, it’s like trying to claim something right and to make it better. But I don’t think I think the memories that’s the wound is still to to expose.

01:03:53:25 – 01:03:54:11
Joseph
Exactly.

01:03:54:20 – 01:04:05:08
Sam
To be doing things like that. I mean, now we’re seeing that they don’t have nearly as poor of a launch with the Xbox Series X and S, there is the chip shortage, which is affecting everything. But but the.

01:04:05:08 – 01:04:10:11
Joseph
Problem that you run into is so you want to buy an Xbox Series S will do you need to.

01:04:10:11 – 01:04:11:21
Joseph
Buy an Xbox one.

01:04:11:21 – 01:04:23:03
Joseph
S because that’s what a lot of people wound up doing and not getting what they wanted. Yep. So it’s almost like Microsoft is deliberately confusing their marketing now and having people buy stuff that they don’t want.

01:04:23:10 – 01:04:25:28
Sam
Yeah, it’s definitely a branding issue overall.

01:04:26:00 – 01:04:26:26
Joseph
How difficult.

01:04:26:26 – 01:04:29:18
Joseph
Is it? Xbox one Xbox two extra.

01:04:29:28 – 01:04:33:17
Joseph
Hey, you know what Sony did that nobody confuses their consoles do.

01:04:33:21 – 01:04:44:11
Sam
It’s true. Well, you also get into the whole discussion of what kind of company Microsoft wants to be. Because with the Xbox one, they wanted it to be a multimedia device. Right. And Sony was never they didn’t care about that.

01:04:44:11 – 01:04:56:25
Sam
I mean, they kind of tried it with the PS3, but it was still called the PlayStation three. Ultimately, it’s there to play video games, which I think that Xbox is definitely going back to that with the Xbox Series X because you lost the bypass for your cable.

01:04:56:25 – 01:05:02:02
Sam
That’s not that’s no longer a feature, right? And so I think they’re definitely returning to their, I guess, quote unquote roots.

01:05:02:09 – 01:05:03:23
Joseph
They’re building a game system.

01:05:03:24 – 01:05:04:14
Sam
Yeah. And it’s.

01:05:04:15 – 01:05:05:03
Joseph
Tabulations.

01:05:05:03 – 01:05:15:24
Sam
Guys. I mean, the Series X is on par with something you can get on PC, right? In terms of specs, not like high end from a hardware standpoint. Yeah, yeah. So they’re they’re going back to the drawing board in the basics, hopefully.

01:05:15:24 – 01:05:32:00
Sam
And you know, we’ll see the ramifications of the COVID 19 pandemic and that chip shortage for years in terms of actually being able to get your hands on these consoles. But I think that, you know, Microsoft is almost stepping past that with things like xCloud, you know, they continue to dump money into that.

01:05:32:01 – 01:05:40:20
Sam
Yeah, I could totally see in a decade, maybe, you know, the next Xbox isn’t, you know, it isn’t a bucket of like a fire stick that you just stick in your.

01:05:40:20 – 01:05:41:26
Joseph
TV, and that’s.

01:05:41:26 – 01:05:46:17
Joseph
Hard to do. Google try to do that, and Google Stadia are just early. Take off with.

01:05:46:17 – 01:05:47:01
Sam
It. Yeah.

01:05:47:21 – 01:05:49:10
Sam
Amazon’s doing it, too with Luna.

01:05:49:12 – 01:05:49:26
Sam
Yeah.

01:05:50:08 – 01:05:54:02
Sam
You know, I think the technology just isn’t there yet. But when it gets there, you know, the.

01:05:54:02 – 01:05:55:21
Joseph
Audience isn’t ready for that.

01:05:55:21 – 01:06:02:16
Sam
Yeah, that’s true. Yeah. Yeah. I don’t think it’s a very hard sell to be like, Well, there’s no box. Well, how do I what do I do with this here?

01:06:02:16 – 01:06:03:08
Joseph
Here’s 500.

01:06:03:09 – 01:06:04:26
Joseph
Dollars, you know, stick.

01:06:05:29 – 01:06:08:05
Sam
Yeah, it’s a little bit of buyer’s remorse there. Yeah.

01:06:08:15 – 01:06:17:01
Joseph
Well, and the problem is that, you know, not to go off topic too far here, but the problem of Google had was you would buy games through Google Stadia, but you never own the rights to the games.

01:06:17:09 – 01:06:18:15
Sam
Mm hmm. Yeah, that’s true. Yeah.

01:06:18:16 – 01:06:21:20
Joseph
So you’d pay full price for the game and.

01:06:21:20 – 01:06:24:12
Joseph
It was their game. You were really just borrowing it for 50 bucks.

01:06:24:24 – 01:06:35:23
Sam
But that was worth it. Had you lost me? Yeah, but we will monitor this going forward. We’ll see when this acquisition goes through what’s going to happen with it. But that’s going to wrap up today’s episode of Insights into Things.

01:06:36:10 – 01:06:51:04
Sam
Of course, I’ll hit the show plugs for you again. You can always subscribe to everything on every platform, everywhere Apple Podcasts, Spotify, Google Podcasts, Stitcher, iHeartRadio, tune in Amazon, Pandora. But we also, you know, want to hear what your thoughts are?

01:06:51:04 – 01:07:00:10
Sam
What did you think about this acquisition? How do you feel about it? Even if you’re not a gamer in terms of a tech acquisition, how do you feel about it? You can email us at comments and insights in the things we’re on.

01:07:00:10 – 01:07:12:26
Sam
Twitter insights underscore things we stream on Twitch, Twitter TV’s insights into things, and if you have Amazon Prime, that means you do have Twitch Prime and you can give us that free Prime stuff. It really helps us out here on Facebook at facebook.com.

01:07:12:26 – 01:07:25:06
Sam
Such Insights Into Things podcast, Instagram, at insights into things, and finally, all this information and so much more and insights into things dot com that’s going to wrap it up for today. Thank you so much for listening and have a wonderful rest of your day.