The trial between the FTC and Microsoft concerning the injunction to prevent the takeover of Activision Blizzard opened on Thursday June 22, 2023. As expected, this legal battleground was the scene of several behind-the-scenes industry revelations.
The courtroom is the place where brands are sometimes forced to drop pretense and declare the truth, and nothing but the truth. So it's a perfect opportunity to learn more about the behind-the-scenes workings of an industry, and to unravel some of its juicy details.
As in the case of Epic Games vs Apple, the trial between the FTC and Microsoft in a California federal court is already uncovering some of these details. Here's a summary of what we learned on the first day of the trial.
A PS6 and a new Xbox as early as 2028?
Even before the opening of the trial, one of the legal documents set the videogame press on fire. It states that Microsoft predicts the launch of the next generation of consoles in 2028. This would be the estimated launch year for the PlayStation 6 and the next Xbox.
"You may also have read statements about the next Xbox or PS6. In this document, Microsoft estimates with a wet finger that the next consoles would be for 2028.
It's simply about the 10-year contract they're offering Sony for ABK games. pic.twitter.com/O18SmVtoqk
- Cassim Ketfi (@NotCassim) June 22, 2023
This is an important date for Microsoft, as the company has promised Sony a 10-year contract to guarantee PlayStation access to Activision Blizzard games. The contract would therefore still be valid at the launch of the next generation of consoles.
In testimony dated April 2023 before the FTC, PlayStation boss Jim Ryan says that Sony would no longer want to release information about its next game console if the buyout went through. "We simply couldn't run the risk of a company owned by a direct competitor having access to this information".
Call of Duty could have been a PS5 exclusive
The testimony of Sarah Bond, who heads up the Xbox ecosystem, which includes relations with external developers, revealed details of the relationship between Microsoft and Activision.
In particular, it was revealed that Activision boss Bobby Kotick forced the renegotiation of revenue sharing between Microsoft and the publisher thanks to Call of Duty. Indeed, the boss threatened not to launch Call of Duty on Xbox Series in 2020 when the next generation of consoles is launched. De facto, this would have made Call of Duty a PS5 exclusive.
Given the strength of the license, this was an impossible eventuality for Microsoft, which agreed to renegotiate revenue sharing. We understand from the testimonial that the firm validated an 80 / 20 split in favor of Activision, rather than the classic 70 / 30 split practiced in the industry.
We also learn from Sarah Bond that the marketing contract binding PlayStation and Activision for the launch of Call of Duty Vanguard prevented Microsoft from announcing the game's availability on Xbox at its conference. In fact, Microsoft could only communicate about the game's launch where there were no customers on other platforms, i.e. neither on YouTube nor on the rest of the web.
The revelation about revenue sharing and behind-the-scenes negotiations could have repercussions on Microsoft's future negotiations with other partners such as Ubisoft and EA.
Indiana Jones will be an Xbox exclusive thanks to Microsoft
On January 12, 2021, Bethesda revealed that the publisher had signed with Lucasfilm Games to develop an Indiana Jones game. There had been no news of the game, at least until today. As the game was announced after Bethesda was acquired by Microsoft, but the contract was signed beforehand, the question of Xbox exclusivity had been raised ever since.
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