A five-day hearing in the case between the U.S. Federal Trade Commission (FTC) and Microsoft in regards to the latter’s plans to acquire Activision Blizzard has had a knock-on effect – it’s revealed some of the inner workings of the usually secretive game industry according to Game Rant and CNBC.
The hearing held closing arguments on Thursday, with a judge now determining if the arguments are sufficiently plausible that a federal court should grant a preliminary injunction against the deal. Whatever way the case goes, some big revelations have come forward regarding the game industry overall.
Microsoft’s acquisition does indeed seem to be primarily about finding mobile customers for Xbox and expanding into that market which is growing faster than revenue from gaming on PCs or consoles. Microsoft reportedly considered several others like Zynga, Sega and Square Enix before settling on Activision to acquire.
Whilst Microsoft publicly proposed a ten-year extension to Sony regarding the “Call of Duty” franchise, Xbox Head Phil Spencer reportedly originally offered a five-year commitment which Sony Interactive’s Jim Ryan rejected as failing to address wider concerns about the deal. Spencer has subsequently sworn under oath during the second day of the ongoing trial to keep the “Call of Duty” franchise on PlayStation.
On the final day of the hearing, the FTC did reportedly succeed in getting witnesses to show that Microsoft evaluated ways of trying to reduce the availability of Activision Blizzard content on the Sony PlayStation.
Activision Blizzard CEO Bobby Kotick indicated while Activision Blizzard has experimented with putting games in subscription libraries, he didn’t think they would lead to “sustainable long-term business” and he “couldn’t imagine anyone offering commercial terms that would be favorable”.
In regards to cloud gaming, Microsoft CEO Satya Nadella reportedly said: “The feedback to date is that it’s just not good enough as a — you know, definitely as a substitute to any of the current platforms.” He adds it could “breakthrough at some point” but neither the economics nor content are there yet.
Another reveal was that Bethesda’s Indiana Jones game, which was going to be multi-platform before the Xbox acquisition, will be an Xbox exclusive. The trial revealed Bethesda originally had more plans related to PlayStation than Xbox and Xbox was so worried about losing “Starfield” in particular to PlayStation that it became one of the deciding factors that made it acquire Bethesda’s parent company ZeniMax.
After that, Microsoft cancelled the PlayStation versions of all of Bethesda’s upcoming games that weren’t tied to pre-existing exclusivity agreements with Sony. Spencer adds that platform exclusivity decisions are made on a case-by-case basis at Microsoft.
Spencer also suggests “The Elder Scrolls 6” is at least five years away and will very likely be either a cross or next-gen title only at that time – so don’t expect it in stores until after a PS6 is available which the company predicts will happen in 2028.
The tech giant also tells the FTC it’s certain that Sony’s Project Q handheld, allowing people to stream PS5 games to a handheld within their home, will have a sub-$300 price tag.
Sony meanwhile indicated it intends to keep Activision out of the PlayStation 6 creation loop should Microsoft manage to acquire the “Call of Duty” maker as it can’t risk sharing its future hardware with its fiercest rival’s subsidiary. It was reportedly revealed that Activision helped Sony with PlayStation hardware development in the past.
Finally those poorly redacted documents have revealed the cost of AAA gaming these days with “Horizon Forbidden West” costing around $212 million U.S. dollars to make – created by 300 employees working on the game for five years. Around 200 people worked on “The Last of Us Part 2” which also took five years and came in at a cost of $220 million.
District Judge Jacqueline Scott Corley said on Thursday that she isn’t sure when she’ll decide on the preliminary injunction but is mindful of the dates set as Activision Blizzard and Microsoft have agreed to terminate the deal if it’s not done by July 18th. Thus if a preliminary injunction is granted, then the deal is likely off.
Sources: Game Rant, Games Hub and CNBC
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