Xbox FTC Trial Day 4: Bobby Kotick And Jim Ryan Agree On One Thing – Neither Of Them Likes Game Pass

Another busy day in court, with the FTC v. Microsoft trial ending tomorrow. It was a surprisingly quiet day compared to some of the days before, with Microsoft chief Satya Nadella giving relatively lighthearted testimony, Activision CEO Bobby Kotick calmly protesting against the FTC’s investigators. yourself and more economic talk.

We also get to briefly see that Nadella and Judge Jacqueline Scott Corley stick together because of their shared love for Candy Crush. interesting.

Exclusively for me, but not for you

Console exclusivity has been part of how video game publishing has worked since the birth of video games. But having heard Xbox and friends recount it over the past few days, everyone in the industry just hates the idea.

People like Microsoft head Satya Nadella and Activision CEO Bobby Kotick today have made exclusivity seem less like a feature but more like a bug, damaging their ability to do business on several platforms. certain platforms and access to larger markets. For example, Nadella mentioned that he was “don’t love” for exclusivity, while Kotick stressed that taking Call of Duty exclusively for Xbox would be “very detrimental” to the business.

All of this is appropriate with Spencer’s opinion. All in all, Xbox and its witnesses and lawyers seem to be making the argument that the whole idea of ​​exclusivity is a loathsome idea they play with because Sony coerced them. If Sony stops paying for exclusives like Final Fantasy XVI, it thinks Xbox won’t have to make deals like it did with Activision just to compete.

It’s also no surprise that the head of Sony Interactive Entertainment, Jim Ryan, sang a different tune yesterday in his video deposition. He noted that while he “didn’t like” the Xbox exclusive Redfall and Starfield after acquiring Zenimax, he had “no dispute with it” and do not consider it anticompetitive. Ryan can’t get high on exclusivity when Xbox has shared data in the courtroom that PlayStation exclusivity far exceeds Xbox. Where he draws the line, of course, is in Call of Duty: a franchise so large and successful that (FTC and Sony argue) the very idea of ​​it becoming a monopoly is supposed to trigger irreparable harm to PlayStation.

Right now, it’s hard to imagine a scenario in which the Xbox exclusive Call of Duty doesn’t backfire massively on Xbox. Sony’s much larger loss of market share would significantly cut existing Call of Duty profits and (as many executives have reminded us) the “passion” this hypothetical would ignite in the audience. gamers can do significant damage to the brand. But it’s important to note that Ryan isn’t thinking of a Call of Duty-exclusive Xbox situation next week, month, or year, under very similar market conditions. Instead, Ryan seems to fear the situation really turns around, about the absence of Call of Duty in a hypothetical distant future where the PlayStation, for whatever reason, is already at the bottom, just like the Xbox is now. .

Safely on top of the world, the PlayStation would actually be fine enough without Call of Duty. But Ryan knows that the condition may not last forever. The “panel wars”, produced as online as they can be, really play out with winners and losers. While PlayStation may have confidence in its plans for the next five or even ten years, at some point Ryan worried that Spencer’s Call of Duty promise would expire. And when that happens, if Sony isn’t yet at the top of the console world, then losing Call of Duty could be a disaster.

It makes sense to be vehemently antitrust when monopolies are the tools of winners and you are losing. But the market is unpredictable. There’s no way to guarantee where either competitor will be ten years from now. Ryan seems to believe that if he doesn’t come out on top when those deals expire, Xbox will do to Sony exactly what Sony has done to Xbox for years…or a lot worse. Whether he is true to that belief is up to the court to decide.

Microsoft Acquires Activision Blizzard: The Story So Far

tried to claim that he spoke to “all the publishers” and that, unanimously, they all hate Game Pass. Is he right? Hard to say.

ONE Eurogamer Report 2019 surveyed developers about their Game Pass thoughts and the results were more mixed than Ryan is describing – but that was four years ago and those surveyed were mostly developers. medium-sized developers, not large publishers. Mike Rose of No More Robots have some more recent thoughts on service inclined much more aggressive, but he is just an example. To hear Xbox speak, the service is great for developers, although it admits it too cannibalize all game sales. Taken all together, public evidence of companies talking about Game Pass emotions seems to be fairly common. So what is Ryan talking about?

A guess can be made thanks to today’s testimony from Bobby Kotick, who likes Ryan, apparently doesn’t like Game Pass. When asked, he admitted that he’s not a fan of multi-game subscription services, hence why Activision games (mostly, though not entirely) don’t appear on them. He emphasized that while there is no clear internal rule that Activision games won’t show up on subscription services, he doesn’t think there’s a strong enough business proposition to convince him. he’s in for a game if Activision remains independent.

I disagree with the idea of ​​a multi-game subscription service as a future business proposition, but we [Activision and Microsoft] can agree disagree

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If the acquisition happens, he admits he’ll be stuck with the Game Pass whether he likes it or not. “I disagree with the idea of ​​a multi-game subscription service as a future business proposition, but we [Activision and Microsoft] can agree to disagree,” he said.

Kotick’s dislike of multi-game subscription services makes sense in principle. He does not stand to benefit from them. Why did he include Call of Duty on Game Pass when Activision is currently getting $70 a copy from millions of units sold? What does a subscription mean for Diablo 4 if people already pay for it? If Activision games are less popular or have a shorter sales period, it ultimately makes business sense to include them in a subscription service and earn a guaranteed amount. But Activision Blizzard games have reached such a level of popularity that that is no longer necessary. That’s also why GTA 5 has only appeared on Game Pass briefly in the decade since its release: it doesn’t need it. A subscription deal will only hurt sales.

Which brings me back to Jim Ryan. The Game Pass could very well be a great deal for developers who need the money security that Game Pass offers, because their own sales prospects are uncertain enough. But I suspect Jim Ryan didn’t talk to Mike Rose or Tequila Works or the other developers Eurogamer talked to. I suspect Jim Ryan is referring to the big publishers that don’t need a Game Pass, either because they have their own service to get games on (EA or Ubisoft) or because they’re Take-Two, Activision Blizzard or even Nintendo : so big that a certain guaranteed profit in exchange for all their unit sales would be a total hoax.

leak in the boat

One quick last time apart today before we go. Perhaps today’s most exciting revelation actually didn’t happen in court. It happened because some lawyer or assistant or someone not looking closely enough at a sharpie they’re using to redact some very, very secret documents.

Trials like these are the golden age of game media, not just because of what’s revealed in the usual proceedings, but because the extremely secretive game companies constantly churn out out things like this spectacularly, leading to piles of secrets actually being put into the evidence folders. In addition to the sharpie disaster above, last week we looked at entire presentation with confidential details about the companies Xbox is thinking they want to buy. I hope we see more of the same tonight and tomorrow, as the entire folder of evidence has been taken offline following the sharpie issue.

All of this is pretty funny, but it has a much more important impact. Judge Jacqueline Scott Corley did a great job of it all, but both here and in Epic v. Apple, the US justice system has made it clear that while it will allow the protection of legitimate corporate secrets, it is not here to do PR work for video game companies. Sure, game companies fighting in court over anything on this scale will result in a strange, backhand, corporate transparent win for consumers. The more they fight, the more we know.

There is one more day left in court, with a verdict due in the coming days. You can check out our daily meetings right here on IGN for updates on everything happening in the FTC v. Microsoft, daily, as well as update our detailed analysis of the first day, Monday, And the third day of the trial before it summons again tomorrow.

Rebekah Valentine is a senior reporter for IGN. You can find her on Twitter @duckvalentine.