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Microsoft Activision Deal: Firm Said to Offer EU Concessions Soon to Secure Early Clearance

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By Reuters | Updated: 29 November 2022

Microsoft is likely to offer remedies to EU antitrust regulators in the coming weeks to stave off formal objections to its $69 billion (roughly Rs. 56,350 crore) bid for Call of Duty maker Activision Blizzard, people familiar with the matter said.

The US software giant and Xbox maker announced the deal in January to help it compete better with leaders Tencent and Sony.

It has since then faced regulatory headwinds in the European Union, Britain and in the United States, with Sony criticising the deal and even calling for a regulatory veto.

The deadline for the European Commission, which is investigating the deal, to set out a formal list of competition concerns known as a statement of objection is in January. Offering remedies before such a document is issued could shorten the regulatory process.

“Ultimately, such a move could secure an early clearance with the European Commission and subsequently be used by the parties before other antitrust agencies,” said Stephane Dionnet, a partner at law firm McDermott Will & Emery.

“However, it remains to be seen whether the active complainants will validate such concessions (in particular in terms of scope) and if behavioural remedies will also be accepted by the CMA and the FTC,” he said, referring to the UK and US antitrust agencies.

Microsoft’s remedy would consist mainly of a 10-year licensing deal to PlayStation owner Sony, another person with direct knowledge said.

Activision shares were up 2 percent after the Reuters story was published.

The EU competition watchdog, which is scheduled to decide on the deal by April 11, and Sony declined to comment.

Microsoft said it was working with the Commission to address valid marketplace concerns.

“Sony, as the industry leader, says it is worried about Call of Duty, but we’ve said we are committed to making the same game available on the same day on both Xbox and PlayStation. We want people to have more access to games, not less,” a Microsoft spokesperson said.

The deal has been cleared unconditionally in Brazil, Saudi Arabia and Serbia.

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PlayStation CEO Jim Ryan Met EU’s Antitrust Chief to Discuss Microsoft’s Activision Deal

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Details on the discussion between Jim Ryan and Margrethe Vestager remain unclear.

By Reuters | Updated: 27 January 2023

Sony’s gaming chief Jim Ryan met EU antitrust chief Margrethe Vestager on Wednesday to discuss Microsoft’s $69 billion (about Rs. 5,62,647 crore) bid for Call of Duty maker Activision Blizzard, a person familiar with the matter said on Thursday.

The meeting came as the EU competition watchdog prepares to warn Microsoft this week about the potential anti-competitive effects of the US software giant and Xbox maker’s acquisition in the biggest gaming industry deal in history.

Microsoft is looking to Activision to help it compete better with leaders Tencent and Sony. The latter has criticised the deal and even called for a regulatory veto.

The person declined to provide details of the discussion between Ryan and Vestager. The European Commission, which is scheduled to rule on the deal by April 11, did not immediately respond to a request for comment.

The US Federal Trade Commission has sued to block the deal while UK regulators have also expressed concerns, arguing it would give Microsoft’s Xbox exclusive access to Activision games, leaving Nintendo consoles and Sony’s PlayStation out in the cold.

An earlier report suggested that Microsoft argued that the deal would benefit gamers and gaming companies alike, offering to sign a legally binding consent decree with the FTC to provide Call of Duty games to rivals including Sony for a decade.

Michael Chappell, the FTC administrative law judge, will rule on the deal after hearings set for August 2023.

The deal currently faces scrutiny in the European Union which is to decide by March 23 whether to clear or block the deal.

© Thomson Reuters 2023

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Microsoft Activision Takeover: No ‘Substantive’ Settlement Talks With US FTC, Lawyer Says

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Microsoft has offered to sign a legally binding consent decree with the FTC to provide Call of Duty games to rivals including Sony for a decade.
By Reuters | Updated: 4 January 2023

There are no “substantive” settlement discussions under way between US President Joe Biden’s administration and Microsoft to resolve a legal dispute over the Xbox maker’s $69 billion (roughly Rs. 5,71,900 crore) bid for games maker Activision Blizzard, a Federal Trade Commission attorney said on Tuesday.

The FTC, which enforces antitrust law, asked a judge to block the transaction in early December, arguing it would give Microsoft’s Xbox exclusive access to Activision games, leaving Nintendo consoles and Sony’s PlayStation out in the cold.

FTC attorney James Weingarten, speaking in a brief telephonic pretrial hearing, said there were no “substantive” settlement discussions between the two sides under way.

Microsoft argues that the deal would benefit gamers and gaming companies alike, offering to sign a legally binding consent decree with the FTC to provide Call of Duty games to rivals including Sony for a decade.

The case reflects the muscular approach to antitrust enforcement being taken by the administration of US President Joe Biden. But antitrust experts say the FTC faces an uphill battle to convince a judge to block the deal, because of the voluntary concessions offered by Microsoft to allay fears it could dominate the gaming market.

Michael Chappell, the FTC administrative law judge, will rule on the deal after hearings set for August 2023. Either side can then appeal to the same FTC commissioners who voted to bring the challenge, and then to a U.S. appeals court.

The deal faces scrutiny in the European Union which is to decide by March 23 whether to clear or block the deal.

© Thomson Reuters 2023

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Arma 3 Video Game War Footage Used to Spread Waves of Misinformation About Ukraine Conflict

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Players often upload hours of Arma 3 gaming footage on platforms such as YouTube and researchers blame its easy availability for its misuse.

By Agence France-Presse | Updated: 2 January 2023

Troops battle through burning streets. Missiles take down fighter jets. Drones pulverize tanks. The dramatic visuals have the trappings of real-life combat, but they are clips from video games fuelling misinformation.

Footage from the war-themed Arma 3 video game, often marked “live” or “breaking news” to make it appear genuine, has been used repeatedly in recent months in fake videos about the Russian offensive in Ukraine.

The frequency and ease with which gaming footage is mistaken as real, even by some media broadcasters, and shared as authentic news on social media highlight what researchers call its serious potential to spread misinformation.

“The fact that it keeps happening is a reminder of how easy it is to fool people,” Claire Wardle, co-director of the Information Futures Lab at Brown University, told AFP.

“As video game visuals get more sophisticated, CGI (computer-generated imagery) can, at a quick glance, look real. People need to know how to verify imagery, including looking at metadata so that these mistakes don’t get made, especially by newsrooms.”

Arma 3, whose Czech-based developers promise “true combat game play in a massive military sandbox,” allows players to create various battlefield scenarios using aircraft, tanks and a host of weapons.

Players often upload hours of gaming footage on platforms such as YouTube and researchers blame its easy availability for its misuse.

In the comments under one Arma 3 video titled “Ukraine’s counteroffensive!” — which simulated a missile strike on a column of tanks — a user, who apparently took it as real, wrote: “We must ask Ukraine after this war to train NATO forces how to fight.”

First TikTok war

“While it’s flattering that Arma 3 simulates modern war conflicts in such a realistic way, we are certainly not pleased that it can be mistaken for real-life combat footage and used as war propaganda,” a representative of Bohemia Interactive, the game’s creator, said in a statement.

“We’ve been trying to fight against such content by flagging these videos to platform providers, but it’s very ineffective. With every video taken down, ten more are uploaded each day.”

In recent years, Arma 3 videos have been used in false depictions of other conflicts, including Syria, Afghanistan and Palestine, with the clips often debunked by global fact checkers.

That includes AFP, which has debunked several videos using Arma 3 content, including one in November that also claimed to show Russian tanks being struck by US-made Javelin missiles. The clip had been viewed tens of thousands of times on social media.

Bohemia Interactive said the misleading videos have recently “gained traction” in regard to the conflict in Ukraine.

Dubbed by observers as the “first TikTok war,” it is a conflict like no other as a steady stream of visuals from the frontlines — some of it misleading or false — pour onto social media platforms.

Given the unsophisticated nature of the Arma 3 misinformation, researchers say it is unlikely to be the work of state actors.

“I suspect that the people posting this content are just trolls doing it to see how many people they can fool,” Nick Waters, from the digital forensics firm Bellingcat, told AFP.

“Secondary disseminators will be gullible people who pick up this content and circulate it in an attempt to garner fake internet points.”

Bohemia Interactive said the false videos were “massively shared” by social media users, many of whom seek what researchers call engagement bait — eye-catching posts that generate more interaction through likes, shares and comments.

Different from reality

The Arma 3 videos, which its creator acknowledged are “quite capable of spreading fake news,” were also shared by various mainstream media and government institutions worldwide, Bohemia Interactive said.

In a live broadcast in November, Romania TV wrongly presented an old Arma 3 video as battle footage from Ukraine, and a former Romanian defence minister and former intelligence chief offered their analysis of the footage as if it were real.

This occurred after another Romanian news channel, Antena 3, made the same error in February — among the experts invited by the broadcaster to analyse its video taken from Arma 3 was the spokesman of the Romanian defence ministry.

Bohemia Interactive has urged users to use gaming footage responsibly, refrain from using clickbait video titles and clearly state that it was derived from a video game.

Researchers say their videos are relatively easier to debunk compared to “deepfakes” — fabricated images, audio and videos created using technology that experts warn is frighteningly sophisticated and gaining ground in the criminal underworld.

“If you know what you’re looking for, these (Arma 3) videos aren’t actually difficult to identify as fakes,” said Waters.

“As good as Arma 3 looks, it’s still significantly different from reality.”

The fact that many are unable to do so points to another stark reality in the age of misinformation.

“It shows that some people don’t have the skills to navigate the current information environment,” Waters said.

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Esports Now Recognised as Part of Multi-Sport Event, to Be Taken Care by Department of Sports: Government

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Esports Now Recognised as Part of Multi-Sport Event, to Be Taken Care by Department of Sports: Government
By Press Trust of India | Updated: 28 December 2022

The Government of India on Tuesday gave Esports a major boost by integrating it with mainline sports disciplines in the country.

The President of India, Droupadi Murmu, in exercise of the powers “conferred by clause (3) of article 77 of the Constitution” amended the rules governing Esports and asked the Ministry of Electronics and Information Technology (MeitY) and the Sports Ministry to include “e-Sports as part of multi-sports events”.

There had been a growing demand for Esports to be included in the curriculum of multi-discipline events after it was included in the 2018 Jakarta Asian Games as a demonstration sport, meaning medals won in the sport were not counted in the official overall medals tally.

But following the President’s notification, issued on December 23, that IT Ministry will be the nodal agency for online gaming-related matters and the sports ministry will have to include it in its curriculum, it has come as shot in the arm for Esports enthusiasts.

The International Olympic Association (IOC) too is going big on popularising e-Sport with Singapore being confirmed to host the inaugural Olympic Esports Week in June next year.

This marks the next big step in supporting the development and integration of virtual sports with the Olympic movement and engaging further with competitive gamers.

The IOC had said in November this year that the Olympic Esports Week would showcase the best of virtual sports — hybrid physical and simulated sports — in the four-day festival from June 22 to 25, including exhibiting the latest technologies, panel discussions, education sessions and show matches.

IOC President Thomas Bach had said last month that the inaugural Olympic Esports Week would mark an important milestone “in our ambition to support the growth of virtual sports within the Olympic Movement”.

The Indian DOTA 2 team had clinched bronze at the first Commonwealth Esports Championship held in Birmingham in August defeating New Zealand.

The sport will make its debut at the Asian Games to be held in Hangzhou, China next year.

Reacting to the report of its inclusion as a mainline sport, Lokesh Suji, director, Esports Federation of India and vice-president of Asian Esports Federation, said the efforts of the fraternity had finally borne fruit.

“We have been constantly working on establishing the difference between esports and iGaming, and finally, our efforts have been fulfilled. We welcome this announcement by our government, which will open new avenues to pour in more investment opportunities in this booming industry.

“From now onwards, we will have to build proper infrastructure, training facilities and coaching for our young esports athletes. Only a short time until we see esports being placed in the same league as cricket, football, basketball, etc. and having similar fan power, scale and craze,” said Suji.

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Microsoft Activision Deal: Firm Offered to Agree to FTC Consent Decree on Call of Duty Games for Rivals

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Microsoft's Activision Blizzard takeover also faces scrutiny outside the US, with the EU opening a full-scale probe into the deal in November.
By Reuters | Updated: 14 December 2022

Microsoft President Brad Smith said on Tuesday the company had offered to agree to a legally-binding consent decree with the US Federal Trade Commission to provide Call of Duty games to rivals including Sony and others for a decade. The development comes as Microsoft is seeking approval for its $69-billion (roughly Rs. 5,66,800 crore) takeover bid for video game publisher Activision Blizzard.

Microsoft, which owns the Xbox console and game network platform, said in January 2022 that it would buy Activision for $68.7 billion (roughly Rs. 5,64,474 crore) in the biggest gaming industry deal in history.

The deal has drawn criticism from Sony, maker of the PlayStation console, citing Xbox maker Microsoft’s control of games such as the Call of Duty series.

FTC and Activision Blizzard did not immediately respond to a request for comment on Tuesday.

In a move to blunt criticism, Microsoft this month entered into a 10-year commitment to bring Call of Duty to Nintendo platforms. The company made the same offer to Sony.

Earlier this month, the Biden administration moved to block Microsoft’s bid to buy Activision, throwing a stumbling block in front of the tech giant’s plans to rapidly expand its portfolio of popular games and catch up to bigger rivals.

FTC and Activision Blizzard did not immediately respond to a request for comment on Tuesday.

In a move to blunt criticism, Microsoft this month entered into a 10-year commitment to bring Call of Duty to Nintendo platforms. The company made the same offer to Sony.

Earlier this month, the Biden administration moved to block Microsoft’s bid to buy Activision, throwing a stumbling block in front of the tech giant’s plans to rapidly expand its portfolio of popular games and catch up to bigger rivals.

Without Activision and its variety of games across mobile, consoles and PCs, Microsoft could struggle to attract users to its budding subscription service for accessing games. Drawing subscribers has become a priority for big tech companies as traditional growth sources such as ad sales become less reliable.

© Thomson Reuters 2022

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ED Investigates Gaming Companies’ GST Evasion Worth Rs. 23,000 Crore

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ED is also investigating several cases related to cyber and crypto assets frauds wherein online gaming have been used for siphoning the proceeds.
By Press Trust of India | Updated: 12 December 2022

Tax officers are investigating GST evasion of about Rs 23,000 crore by gaming companies between April 2019 and November 2022, Minister of State for Finance Pankaj Chaudhary said on Monday.

In a written reply to a question in the Lok Sabha, the minister said the Enforcement Directorate has attached proceeds of crime of more than Rs 1,000 crore in several cases related to Cyber and Crypto assets frauds wherein online gaming etc have been used for siphoning the proceeds.

About evasion of Goods and Services Tax (GST), Chaudhary said Central Board of Indirect Taxes and Customs (CBIC) formations have initiated investigations against some gaming companies (including online gaming firms) located in India as well as abroad.

“The estimated evasion of GST by these companies works out of Rs 22,936 crore, relating to the period April 2019 to November 2022,” he said.

The ED is also investigating several cases related to Cyber and Crypto assets frauds. In these cases, as on December 6, 2022, proceeds of crime of more than Rs 1,000 crore have been attached under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA). Also, 10 Prosecution Complaints (PCs), including 2 supplementary PCs, have been filed before the Special Court PMLA.

Further, assets amounting to Rs 289.28 crore have been seized under section 37A of the Foreign Exchange Management Act, 1999, the minister said.

To a query on whether the Income Tax Department has issued notices to many gaming companies for non-payment of tax, Chaudhary said the information is not available, since no specific identification code for online gaming entities is available in Income Tax Return.

“The disclosure of information about specific taxpayer is prohibited except as provided under section 138 of the Income Tax Act, 1961,” he added.

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