US District Judge Jacqueline Scott Corley on Friday asked Phil Spencer, who heads Microsoft Gaming, to confirm that Microsoft won’t exclude the popular shooter game from consoles offered by its top competitor Sony. Spencer raised his hand ceremoniously and said: “My commitment is, my testimony is, we will continue to ship future versions of Call of Duty on Sony’s PlayStation.” As long as Sony would allow that, he added. He also said that he would keep the game on future versions of the PlayStation. Spencer is among Microsoft executives defending the planned purchase in a five-day court hearing that began Thursday.
The FTC is seeking to temporarily halt the transaction while its legal challenge to the acquisition is pending. His promise under oath could hurt FTC’s attempt to show that the deal would reduce competition in the console gaming market. The blockbuster deal would vault Microsoft to the No. 3 position in the global games market after Tencent Holdings Ltd. and Sony.
The deal that has a closure deadline of July 18 could be wrecked if Corley rules in the agency’s favour. Microsoft claims its incentive in buying Activision is to gain a foothold in the lucrative mobile gaming market. “This deal has nothing to do with increasing” Microsoft Xbox’s share in the console market, Spencer testified. The executive who sported a dark gray suit and tie told the judge he plans to be in the courtroom during the entire hearing that’s set to end June 29. The FTC has also argued that the deal would hurt competition in markets for game subscriptions and games that can be streamed through cloud technology.
Agency lawyer James Weingarten said in his opening statement Thursday that the deal had nothing to do with Microsoft trying to challenge Alphabet Inc.’s Google and Apple Inc.’s “duopoly” in the mobile market. When questioned by Microsoft’s attorney Beth Wilkinson, Spencer tried to convey the extent of Microsoft’s interest in pursuing the mobile gaming market by divulging that the company made a bid for smartphone game maker Zynga. But Take-Two Interactive Software Inc. bought the Farmville creator, he said, referring to Take-Two’s $11 billion acquisition of Zynga announced last year.
Spencer also revealed that the “impetus” behind Microsoft’s $7.5 billion purchase of ZeniMax Media Inc. in 2020 was to stop the video game creator from offering its Starfield role-playing game exclusively to Sony’s PlayStation. “We can’t be in a position as a third-place console where we fall further behind on our content ownership,” he said. Microsoft Chief Executive Officer Satya Nadella and Activision CEO Bobby Kotick are expected to testify before the hearing ends next week. The case is Federal Trade Commission v. Microsoft Corp., 3:23-cv-02880, US District Court, Northern District of California (San Francisco).
