The third day of the hearing that sees Microsoft and Activision face the FTC in the case about the pending acquisition is now ongoing, and Activision Blizzard CEO Bobby Kotick presented his deposition.
Kotick testified in person, as shared by Mlex's Michael Acton and FOSS Patents' Florian Mueller.
Kotick explained that Call of Duty has never been exclusive because Activision has always aimed to create games for as many platforms as possible. He would never want to make it exclusive because the franchise has 100 million monthly active users (half on smart devices and half on consoles) and there would be a revolt if a platform was removed from the picture.
Kotick mentioned that the revenue on PlayStation is twice as that on Xbox, as Sony's brands and presence in different markets lets them have a disproportionate market share. The executive doesn't doubt Sony would manage to compete if the deal passes as they have an enormous development capacity and own some of the best studios in the world.
According to Kotick, Microsoft never even discussed the idea of removing CoD from PlayStation and always described it as multiplatform. Speaking of the possibility of intentionally degrading the games on PlayStation, Kotick explained that he has never heard of such an occurrence.
He has been opposed to the franchise on subscription services as he has a general aversion to the whole idea, partly due to seeing media companies moving their content to streaming subscription services and having their business suffer. He also confirmed that COD (or any other title) would never appear on Game Pass without the deal with Microsoft, and he would never consider it if the deal fell through. He also mentioned that with players paying $15 per month to play World of Warcraft, it would not make economic sense to put it on multi-game subscription services.
Asked whether he wants the deal to go through, he answered "very much so" and added that 98% of Activision Blizzard shareholders voted in favor.
Questioned by the FTC's attorney, Kotick reiterated that Activision is "platform agnostic" and wants its games distributed as widely as possible and confirm that there are no plans to launch games on multi-games subscription services. While Activision had games on PlayStation Plus it was only for a small duration of time and for promotional purposes. Asked whether Activision has formally decided against launching content on Nintendo's service, Kotick responded that he's not aware of any multi-game subscription service offered by Nintendo.
Judge Jacqueline Scott Corley herself asked Kotick why he accepted the acquisition since he thinks that putting games on multi-game subscription services doesn't make economic sense, and he responded that while he has a philosophical disagreement, his responsibility as CEO is to the shareholders.
The FTC questioned Kotick on a document prepared by Activision's COO for him with talking points for a discussion with Nvidia about putting Activision's games on Geforce Now, but Kotick responded that said talking points were never used. The regulator's attorney also attempted to poke holes in the perception of Activision's mobile development capabilities besides King by highlighting the deals with Tencent and NetEase for Call of Duty Mobile and Diablo Immortal. They also attempted to cast doubt on Microsoft's ability to promise Call of Duty on the Nintendo Switch because they don't directly develop it so they wouldn't know how to optimize it.
Kotick also mentioned that Activision would possibly consider putting Call of Duty on its own on a hypothetical next-generation Nintendo Consoles, but there are currently no plans to do so. It would depend on the specs. Asked whether he's confident that the team at Activision working together with the engineers at Xbox will be able to deliver Call o Duty on Nintendo Switch, he answered positively.
if you're unfamiliar with the situation, the FTC has recently obtained a temporary restraining order against the acquisition until the federal court rules on the possible preliminary injunction. You can read our summaries of the first day, second day, and third day of the hearing.
On the other side of the Atlantic Ocean, Microsoft's appeal against the British CMA's decision to block the acquisition is ongoing, with the hearing starting on July 28.
Recently, the European Union approved the deal including proposed remedies to level the competitive playing field on the cloud market, which Microsoft agreed to. A few weeks ago, we learned that the deal was approved by the Chinese authority and South Korea's regulator bringing the number of countries that officially cleared the acquisition to 38.
The authority of New Zealand asked for further information addressing its possible concerns on the case in order to come to a conclusion in mid-July.
