Following the United States Federal Trade Commission getting a requested temporary restraining order that would prevent Microsoft from closing its acquisition of Activision Blizzard, a hearing began yesterday to determine whether a requested injunction would be granted in order for the FTC to fully investigate the deal.
If the injunction is granted, the deal would not be able to close until the FTC fully reviews it and determines whether it complies with United States antitrust law. This process would go beyond the date the deal is supposed to close next month, meaning the companies could renegotiate or step away from the merger.
Since the focus here is whether or not the deal cooperates with antitrust law, a number of questions have been asked about exclusivity.
Among the revelations (hat tip to IGN for an in-depth roundup):
Microsoft says that Activision almost didn’t put Call of Duty on Xbox due to Bobby Kotick wanting a greater revenue share. Kotick got what he wanted, since “time was limited”. Activision also had an exclusive marketing contract with Sony at the time, which made Microsoft limit marketing for CoD.
The Indiana Jones game first announced in 2021 from Bethesda’s MachineGames studio,was originally planned for multiplatform release–until Microsoft acquired Bethesda and now the game is an Xbox/PC exclusive.
PlayStation’s Jim Ryan had a relaxed response to the announcement of the Microsoft-Activision Blizzard deal, saying “I’m pretty sure we will continue to see Call of Duty on PlayStation for many years to come”. Microsoft attempted to use this to poke holes in Sony’s testimony regarding fears of Call of Duty, and potentially other games, becoming exclusives.
Bethesda’s Pete Hines says that Starfield would be released later if it were multiplatform, due to extra QA testing needed. Yet, he also questioned the decision to keep Call of Duty multiplatform, but not Bethesda games, as it was “the opposite of what we were just asked — told — to do with our other titles".
The PlayStation 5 version of Redfall was also canceled following the Bethesda acquisition. Xbox Game Studios’ Matt Booty was questioned by an FTC lawyer about PlayStation releases of games like Deathloop, and The Outer Worlds, and he detailed how those had been contractually agreed upon before the Bethesda acquisition. Booty was asked about The Outer Worlds 2 and whether that would be an Xbox exclusive, but he claims no decision has been made.
Another standout from day one of the trial is Microsoft saying it has “lost the console wars” and has been third behind Sony and Nintendo for years. “Xbox’s console has consistently ranked third (of three) behind PlayStation and Nintendo in sales. In 2021, Xbox had a share of 16% while Nintendo and PlayStation had shares of [redacted numbers]”.They use this to argue that their strategy and a future is in selling more games and not consoles (which are sold at a loss). The merger would be necessary, according to Microsoft's testimony, to help them be a stronger competitor.
