Microsoft's legal battle with the FTC has passed through a third day of trial. On Wednesday, both Microsoft CEO Satya Nadella and Sony's gaming head Jim Ryan had their say. Nadella said that Sony had forced the console exclusivity concept and he dislikes it. Ryan said published dislike Game Pass and said it was in Microsoft's interests to make Call of Duty an exclusive.
Also, Sony has accidentally revealed confidential information about its PlayStation business, including the cost of developing some of its games and how much time its users spend playing Call of Duty.
Microsoft CEO Satya Nadella Blames Sony for Console Exclusives
Microsoft CEO Satya Nadella has expressed his dislike for the idea of console exclusives, but says that Sony is the one who has defined the market competition using them. Nadella made these remarks during his testimony in the FTC v. Microsoft case, where he also discussed Microsoft's cloud gaming strategy, internal gaming targets, and the proposed acquisition of Activision Blizzard.
Console exclusives are games that are only available on a specific console platform, such as Xbox or PlayStation. They are often used as a way to attract customers and increase sales of hardware and software. Some of the most popular console exclusives include Halo, God of War, Horizon Forbidden West, and Starfield.
Nadella said that he would prefer a world where there are no console exclusives, and where Microsoft could focus on software across as many platforms as possible. However, he acknowledged that Sony, as the dominant player in the console market, has set the rules of the game by investing heavily in first-party development and publishing, and by paying third-party publishers not to release their games on Xbox.
“If it was up to me I would love to get rid of the entire exclusives on consoles, but that's not for me to define especially as a low share player in the console market. The dominant player there [Sony] has defined market competition using exclusives, so that's the world we live in. I have no love for that world.”
Xbox Game Pass is Microsoft's subscription service that offers access to hundreds of games for a monthly fee. It is one of Microsoft's main strategies to grow its gaming business, along with cloud gaming and acquisitions. Microsoft has announced in 2022 its intention to buy Activision Blizzard, one of the largest game publishers in the world, for $68.7 billion.
Sony's Gaming CEO Says Publishers Hate Microsoft's Game Pass
On the third day of the FTC's hearing on Microsoft's proposed acquisition of Activision Blizzard, Sony Interactive Entertainment CEO Jim Ryan testified that publishers hate Xbox Game Pass. Ryan said that the subscription service is “not sustainable” for publishers in the long term, and that it could lead to a “race to the bottom” in terms of pricing.
Ryan also said that Sony is not interested in following Microsoft's lead with Game Pass. He said that Sony believes in the traditional model of selling games individually, and that it is “not going to change that.” However, he has concerns that Microsoft will actively harm PlayStation even if Call of Duty is available on Sony's consoles.
“I believe Microsoft intends to use Call of Duty to disadvantage PlayStation in terms of the availability or the manner in which the game is made available on PlayStation consoles and to drive PlayStation gamers to Xbox platforms, specifically Game Pass.”
In an ironic twist, Ryan was unable to answer if he would steer Sony to retaining exlcusitivity of Call of Duty if the company was in Microsoft's position:
“Microsoft Lawyer: Do you think it would be better if Microsoft kept Activision games on PlayStation?
Ryan: Yes, I do
Microsoft: So you do believe it's in Microsoft's best interests to make Activision games available on multiple platforms?
Ryan: No, I don't agree with that
Microsoft: So if you were running Xbox, would you recommend making Call of Duty and other Activision games exclusive to Xbox and PC?
Ryan: That's a hypothetical question that I don't wish to answer
Microsoft: So you don't get to answer?
Ryan: I don't have enough knowledge to answer that question”
Sony Accidentally Leaks Information in Court Documents
Sony also made a faux pas by not properly redacting sensitive details on upcoming projects. The information was revealed in a document that was submitted to the US Federal Trade Commission (FTC) as part of the ongoing antitrust investigation into Microsoft's proposed acquisition of Activision Blizzard. The document was redacted, but some of the redactions were easily visible, revealing the confidential information.
The document shows that Horizon Forbidden West apparently cost $212 million over five years with 300 employees, and The Last of Us Part II cost $220 million with around 200 employees. It also shows that over 1 million PlayStation gamers play nothing but Call of Duty, and that in 2021, over 6 million users spent more than 70% of their time playing Call of Duty.
Sony has since apologized for the error, and the FTC has removed the document from its website. However, the information has already been widely circulated online, and it is likely to have a significant impact on the antitrust investigation.
The revelation of this confidential information is a major embarrassment for Sony, and it raises questions about the company's internal security procedures. It also provides Microsoft with valuable ammunition in its defense against the antitrust investigation.