Microsoft CEO Satya Nadella says he would rather there were no Xbox or PlayStation exclusive console games.
“If it was up to me, I would love to get rid of the entire exclusives on consoles,” Nadella said at a Federal Trade Commission (FTC) hearing in the US, as reported by The Verge.
“But that’s not for me to define, especially as a low-share player in the console market. The dominant player there has defined market competition using exclusives, so that’s the world we live in. I have no love for that world.”
He made these statements as part of FTC hearings regarding Microsoft’s plan to buy publisher Activision Blizzard for £85 billion.
Xbox versus PlayStation
The “dominant player” he refers to here is Sony, which has invested heavily in PlayStation 5 exclusive console games, such as Horizon Forbidden West, Final Fantasy XVI, Demon’s Souls, and God of War Ragnarok. Some of these were developed by Sony-owned studios, others by third-party companies paid not to release on Xbox.
However, Microsoft’s Xbox fortunes for the remainder of this year also rely heavily on an exclusive console game, Starfield.
This game is in development at Bethesda Game Studios, which was acquired by Microsoft in 2021 when it bought parent company ZeniMax Media for around £6 billion.
Microsoft snagged ZeniMax after hearing it was in discussions to make Starfield a PlayStation exclusive, as reported by Polygon.
Microsoft has been keen to highlight its third-place position in the games industry as part of its pitch to acquire Activision Blizzard, trailing behind Sony and Nintendo.
According to VGChartz, Microsoft Series S and X units account for around 14.4 per cent of console sales in 2023 so far, compared to 33 per cent for Nintendo Switch, and 52.6 per cent for Sony’s PS5.
Microsoft’s FTC talks
Satya Nadella’s statements on exclusives are among a slew of tasty titbits that have come out of Microsoft’s FTC hearings.
Poorly redacted papers suggest Sony spent Hollywood blockbuster movie money on some of its exclusive games. It spent £165 million developing Horizon Forbidden West Coast, and £171 million making The Last of Us 2.
Rather than relying on exclusives, Microsoft’s strategy in recent years has been to focus on Game Pass, the subscription service that offers Netflix-like access to hundreds of games.
PlayStation boss Jim Ryan says game publishers “unanimously do not like Game Pass,” and claims it to be “value destructive,” as reported by IGN.
Of course, Sony does offer a somewhat comparable service with its PlayStation Plus Extra and Premium subscriptions. Their Game Catalogue includes access to “up to 400 titles”.
Will Microsoft buy Activision Blizzard?
The UK’s Competition and Markets Authority has already blocked Microsoft’s acquisition of Activision Blizzard, while the US’s FTC filed an injunction in June to stop the deal going ahead before current talks conclude. Some authorities have greenlit the acquisition, though, including the EU.
“Innovators large and small will take note that, despite all its rhetoric, the UK is clearly closed for business,” said Microsoft president Brad Smith after the CMA’s decision was announced.
The CMA decided against green-lighting the acquisition not on the headline-grabbing allegation that Microsoft might not release Call of Duty games on PlayStation consoles, but because of the control it would give Microsoft over the future of cloud gaming.
Microsoft has until July 18 to finalise its buyout of Activision Blizzard, or it faces a £2.35 billion breakup fee.
