Microsoft CEO Criticizes Console Exclusives Amid FTC Hearing

SAN FRANCISCO, CA - JUNE 28: Microsoft CEO Satya Nadella arrives at federal court on June 28, 2023. Microsoft Corp CEO Satya Nadella has placed the blame for the existence of console exclusives on Sony Group Corp, saying that he would prefer to eliminate them altogether. During his testimony at a hearing in the lawsuit filed by the Federal Trade Commission against Microsoft, Nadella addressed the issue of exclusives and directed his criticism toward the PlayStation manufacturer. PHOTO BY LOREN ELLIOTT/GETTY IMAGES 

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 CEO stated, according to Kotaku.

“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.”

For example, Arkane Austin’s “Redfall,” originally intended for the PS5, became an Xbox exclusive after Microsoft’s acquisition. Moreover, the ownership of Bethesda Game Studios by Microsoft has made upcoming titles like “The Elder Scrolls VI” and “Starfield” exclusive to Xbox.In addition, a chat that came to light during the final day of testimony in the FTC’s hearing against Microsoft further questions the truth behind Nadella’s affirmations.

During the hearing, Xbox CFO Tim Stuart was questioned about a conversation from November 2021 between he and Xbox Vice President Matt Booty.

The conversation revolved around a monthly business review meeting between Xbox and ZeniMax, the video game holding company bought by Microsoft in March 2021.

During the meeting, Xbox boss Phil Spencer reportedly made a decisive call to make all ZeniMax games exclusive to the Xbox platform in the future, not just new intellectual properties.

“All games going forward? Not just new IP, but ALL games going forward? Wow,” Stuart asked, as reported by IGN.

The Microsoft-ZeniMax deal has been a focal point of the FTC hearing, as it pertains to the proposed $68.7-billion acquisition of Activision Blizzard, Inc (NASDAQ: ATVI) by Microsoft. The FTC has cited Xbox’s decision to make titles like “Starfield” and “Redfall” exclusive as “powerful evidence” against the merger with Activision Blizzard.

This statement contradicts Microsoft’s activity in recent years. Although exclusives have long been employed by major console manufacturers to entice consumers to their respective platforms, the tech giant’s recent acquisitions have resulted in several games becoming console exclusives. PHOTO BY STEPHEN BRASHEAR/GETTY IMAGES  

Judge Says ‘I’m Going To Do My Best’: As the hearings for a preliminary injunction in the FTC’s lawsuit came to an end and both parties made their closing arguments, Judge Jacqueline Scott Corley interrupted to ask for “grounded, real-world scenarios,” as per IGN’s Rebekah Valentine.

For instance, when FTC lawyer James Weingarten aimed to prove that a hypothetical PlayStation customer would be compelled to switch to Xbox if “Call of Duty” was unavailable on their console, Corley strongly emphasized the need to consider real-world scenarios, highlighting that individuals already possess Call of Duty-capable PCs in their homes and may choose to play the game on those devices.

Regarding the timeline for the decision, Corley acknowledged the time constraints but did not provide a specific time frame, although a decision could potentially be announced as early as Wednesday.

 

 

Produced in association with Benzinga