Microsoft CEO Satya Nadella says he would like to stop exclusive games on consoles. He does this during the lawsuit with which the FTC wants to block Microsoft’s Activision takeover. Activision CEO Bobby Kotick also spoke.
“If it were up to me, I would prefer to do away with all exclusives on consoles. But that’s not for me to decide, especially as a player with a low market share in the console market,” said Nadella Wednesday night at a hearing. “The dominant player [Sony] has defined the competition in the market with exclusives, so that’s the world we live in. I have no love for that world.”
Microsoft previously said it will continue to release Call of Duty on PlayStation consoles after its intended acquisition of Activision. Xbox boss Phil Spencer also promised that under oath during the FTC lawsuit. Microsoft CEO Satya Nadella did the same on Wednesday evening. “It makes no economic sense or no strategic sense,” he said. “Our goal with Activision in particular, with their content and our content, is to get it on more platforms. That’s what we’ve done with Office and that’s what I want to do with gaming.” When asked if he would commit to continuing to release Call of Duty on PlayStation, replies Nadella: “A hundred percent.”
Nadella’s statement follows earlier statements from PlayStation boss Jim Ryan. He stated earlier this week during the FTC lawsuit that the Xbox exclusivity of Bethesda game Starfield is “not anti-competitive.” Microsoft lawyers also argue that game exclusivity is not anti-competitive, partly because Sony does the same with various titles. Final Fantasy XVI, among others, was discussed.
Microsoft CEO Satya Nadella will appear in court on Wednesday. Source: Loren Elliott/Getty Images
Nadella also stated in response to questions from the FTC Xbox’s market share. Last year, Microsoft stated that the company has gained global market share over Sony for several quarters in a row. The company also said at the time that it was the “market share leader” in a number of markets: the US, Canada and Western Europe with the current generation of Xbox Series X/S consoles. The Series X/S would also be the fastest selling Xbox generation to date. Nadella confirms that was all accurate.
Microsoft maintains in its arguments that the company is the smallest console maker, behind Sony and Nintendo. The company says it still has the lowest market share of those three console manufacturers, despite the advances mentioned above.
Furthermore, during the hearing quoted an email from Satya Nadella. In it he says that he wants to make the cloud mainstream. This does not only apply to gaming, by the way; documents released during the lawsuit show that Microsoft plans to make its Windows operating system available as a cloud platform.
Nadella states during the lawsuit that he believes cloud gaming is not only used as a replacement for a console or PC, writes The Verge. “The feedback from the market is that people love their PCs, phones and consoles and use cloud gaming as a complement.” Nadella declares that cloud gaming may see a breakthrough, but it hasn’t yet. “The feedback today is that it’s just not good enough as a replacement for other platforms.” The CEO also says that he sees the cloud broader than just game streaming; Xbox Live is also part of the cloud market.
A document from Microsoft shows that Windows should eventually become a fully-fledged cloud platform.
Activision CEO: “I have a general aversion to game subscription services”
Bobby Kotick, the current CEO of Activision, also spoke during the lawsuit on Wednesday evening. Among other things, he states that he is not a fan of game subscription services such as Game Pass. “I have a general aversion to the idea of multi-game subscription services.” According to the CEO, such services are not profitable. Kotick confirms that he personally probably wouldn’t make Call of Duty available through subscription services like Game Pass. Company considered that in 2020, but ultimately decided not to. That would probably change after the takeover by Microsoft.
The FTC, which wants to block the acquisition, argues that Microsoft can hinder competition by making the game available through its Game Pass service and excluding other subscription services. According to the FTC, it is more likely that Call of Duty will come to other subscriptions, in addition to Game Pass, if the acquisition does not go through. That benefits consumers, says the FTC.
The FTC states in its questioning of Kotick that Activision has not yet made a formal decision to completely exclude its games from subscriptions if the acquisition falls through, writes The Verge. “We would evaluate that,” Kotick confirms. The CEO says that Activision currently does not generate revenue from subscription services. The company has experimented with such services in the past, but does not plan to make games available through such subscriptions. “Overall, I don’t believe a game subscription service is the best way to enable players to make their investments.” Kotick did agree with the FTC that it may be strategic to offer content on subscription services “for a small amount of time.” However, Kotick does not think this is sustainable in the long term.
Kotick further stated on Wednesday evening that he regrets his company has not released any Call of Duty games on the Nintendo Switch. The company saw a prototype of the Switch and didn’t think the console would be successful, writes journalist Derek Strickland. Activision says it is now considering making those titles available on Nintendo’s console. The same goes for a new Nintendo console. “I think we’ll probably make a Call of Duty game for a new Nintendo console,” says Kotick. “I can’t tell you if there are any specific plans, but I can tell you it’s something we’re considering.”
Furthermore, Kotick also states that Microsoft would continue to release Call of Duty on PlayStation consoles. “You’d have a riot if you removed the game from one platform. Gamers are incredibly passionate.” According to Kotick, Call of Duty has 100 million monthly active players and an Xbox exclusivity would “alienate” a large part of that, the CEO explains.
Bobby Kotick at the San Francisco FTC lawsuit. Source: Loren Elliott/Getty Images
Nvidia en Dr. Elizabeth Bailey over cloudgaming
Nvidia’s Jeff Fisher further stated in a pre-recorded interview Wednesday evening that he expects PC gaming ‘always stays better’ than consoles. He also stated that Nvidia’s GeForce NOW service is not taking market share away from consoles or PCs because users typically use the service on relatively old hardware. In addition, Nvidia expects cloud gaming to become a very successful market in the long term, reports The Verge. “I am convinced that cloud gaming has a profitable future.” Fisher also states that the Activision acquisition by Microsoft is “good for the industry.”
On Wednesday, economist Dr. Elizabeth Bailey, Nvidia’s Jeff Fisher and economist Dr. Carlton speaks briefly. For dr. Bailey, an economics expert summoned by Microsoft, was the second time around; her questioning was halted on Tuesday evening and resumed on Wednesday. In her hearing, Bailey mainly repeated many arguments that had already been put forward.
She again argued that the Nintendo Switch is a full-fledged competitor to PlayStation and Xbox; the FTC thinks not because the Switch is less powerful, and therefore does not include the Switch in its post-acquisition economic forecasts. Bailey additionally stated that only a small fraction of Game Pass Ultimate subscribers use the Xbox Cloud Gaming feature; for example, only one percent of console hours by Xbox users would come from cloud gaming. Users would mainly use the service to try out games before downloading them.
Bron: SOPA Images / Getty Images
About the lawsuit
Wednesday was day four of the federal lawsuit between Microsoft and the FTC. The former wants to acquire game maker Activision Blizzard for $ 68.7 billion. The FTC wants to block that takeover because it could distort competition.
The current case revolves around a request from the FTC for a preliminary injunction configure. The FTC has an internal lawsuit pending; the regulator will hold the first hearings in that case on August 2. In the meantime, however, Microsoft should already be able to complete its acquisition. Microsoft and Activision could then be forced to separate again later if the FTC concludes that it is necessary.
The FTC wants to prevent Microsoft from completing its acquisition while its investigation is still ongoing. The requested preliminary injunction would prohibit the tech giant from doing so. The ongoing lawsuit officially therefore has no influence on the deal. In the past, however, the losing party usually dropped its case. It is therefore likely that this lawsuit will determine whether or not the takeover can go ahead. However, that is not certain; both Microsoft and the FTC have several options for appeals. Tweakers recently published a background story about this. Hearings in the federal lawsuit run through Thursday, June 29. A conclusion follows later.
2023-06-29 10:52:10
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