The second day has just concluded of the evidentiary hearing that sees Microsoft and Activision fight in court against the FTC's demand for a preliminary injunction that would severely hinder the proposed acquisition.
This followed a long hearing ( with details shared by FOSSpatents Bog founder Florian Mueller and Mlex's Michael Acton) that saw the testimony of CEO of Microsoft Gaming Phil Spencer,
During Spencer's deposition, the FTA attempted to prove its theory that the Nintendo Switch should not be considered as a direct competitor in the race between Microsoft and Sony.
Spencer was asked whether Microsoft lost the console war, and he responded that the console war is a social construct within the community, so he doesn't count Xbox's community out, but he admitted that Microsoft is in third place for market share.
He also mentioned that Sony is the market leader and an aggressive leader at that, responding "yes" to a question on whether Sony is hostile to Xbox's survival. Spencer also admitted that by shipping content on PlayStation, they enable Sony to make revenue that can be used to damage Xbox. On top of that, he described "securing" Call of Duty as a means to prevent Sony to gain exclusive content within the franchise.
To the mention that Minecraft doesn't have a native PS5 version, Spencer responded that Sony was reluctant to send PS5 devkits to Microsoft, putting the developers at a disadvantage. He was also asked why Minecraft is not on PlayStation Now, and he answered that he doesn't remember PlayStation ever making an offer for it.
Spencer explained that Xbox exclusivity for Bethesda's titles is decided on a case-by-case basis, and Microsoft respects every contract in place about platforms. Speaking of Elder Scrolls IV, that's too far out so Spencer doesn't know which platforms it will be on yet.
Speaking of Call of Duty, Spencer explained that losing its largest console platform would not be economically viable. Asked by the judge, he testified under oath that future Call of Duty games will be made available on PlayStation.
"My commitment, my testimony, is that we will continue to ship future versions of Call of Duty on Sony’s PlayStation."
Spencer further explained that the ABK deal for Microsoft is a way to break into the console market and has nothing to do with increasing the market share of Xbox in the console market.
Microsoft is also willing to put games on PlayStation Plus, as it makes sense economically. Microsoft tries to be good content partners and this includes PlayStation and Nintendo.
Returning to the console market, Spencer explained that in terms of exclusives Sony and Nintendo are dramatically larger than Xbox, and exclusives are an established part of the console business. He added that Sony itself has performed a number of acquisitions, the largest of which is Bungie. On top of that, PlayStation signs exclusive agreements with third-party developers, including Final Fantasy XVI. Incidentally, Spencer still hopes to be able to strike a deal with Sony about Activision's games.
The FTC's lawyer then demanded Spencer another commitment similar to the previous one but applied to cloud services. At that point, the judge cut the lawyer short, mentioning that was not necessary. That was the second time Judge Jacqueline Scott Corley stopped the FTC's lawyer, following another case in which he was attempting to compel Phil Spencer to promise to release Diablo on PlayStation consoles as well.
At the end of the hearing, the judge announced that she expects closing arguments by Thursday, June 29.
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.
Interestingly, the case is handled by the same Judge who denied a preliminary injunction in the so-called "Gamer's Lawsuit." Yet, this doesn't mean that she will come to the same conclusion this time around.
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, while earlier this week, South Korea's regulator also cleared the deal, bringing the number of countries that officially cleared the acquisition to 38.
A couple of days ago, 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.
In an interview published a few days ago, Activision Blizzard CEO Bobby Kotick mentioned that Microsoft is “by far the best place" for the publisher, adding that the acquisition is "the right thing for the industry."
