Day 4 of the Xbox FTC Trial: Bobby Kotick and Jim Ryan agree on one thing – neither of them like Game Pass

Another busy court day lies ahead as the FTC v. Microsoft trial is due to conclude tomorrow. It was a surprisingly quiet day compared to some of the previous ones, with Microsoft CEO Satya Nadella making a relatively dovish statement, Activision CEO Bobby Kotick calmly parrying his FTC inquisitors, and a slew of more business talks.

We also got a glimpse of Nadella and judge Jacqueline Scott Corley bonding through their shared love of Candy Crush. Splendid.

Exclusivity for me, but not for you

For as long as video games have existed, console exclusivity has been a part of how video game releases work effectively. But hearing about it from Xbox and friends over the past few days, everyone in the industry just hates the idea.

Today, figures like Microsoft CEO Satya Nadella and Activision CEO Bobby Kotick have made exclusivity seem less like a feature and more like a bug, ruining their ability to do business on certain platforms and reach larger audiences. Nadella, for example, mentioned that he has “no preference” for exclusives, while Kotick emphasized that bringing Call of Duty to Xbox exclusively would be “very damaging” to business.

All of this is consistent with Spencer’s comments. Overall, Xbox and its witnesses and attorneys seem to be arguing that the whole idea of ​​exclusivity is a vile idea that they’re playing with because Sony forced them into it. If Sony just stopped paying for exclusives like Final Fantasy XVI, they don’t think Xbox would need to make deals like it did with Activision just to keep up.

For as long as video games have existed, console exclusivity has been a part of how video game releases work effectively. But hearing about it from Xbox and friends over the past few days, everyone in the industry just hates the idea.

It’s also not shocking that Sony Interactive Entertainment chief Jim Ryan struck a very different tune in his video claim yesterday. He noted that while he “didn’t like” Redfall and Starfield being exclusives to Xbox after the Zenimax acquisition, he “didn’t object” and didn’t see it as anti-competitive. Ryan is unable to get on the high horse of exclusives when Xbox has already revealed data in the courtroom that the number of PlayStation-owned exclusives far exceeds that of Xbox. He draws the line, of course, with Call of Duty: a franchise so huge and successful that (the FTC and Sony argue) the very idea of ​​making it exclusive would supposedly cause irreparable harm to PlayStation.

Admittedly, right now it’s pretty hard to imagine a scenario where the Xbox exclusivity for Call of Duty doesn’t massively backfire on Xbox. A loss of Sony’s much larger market share would severely eat away at Call of Duty’s existing profits, and (as several executives have reminded us) the “passion” this hypothesis would ignite in gamer audiences could result in significant harm for lead the brand. But one thing to definitely keep in mind is that Ryan isn’t thinking of a situation where Xbox gets Call of Duty exclusive next week, month, or year in very similar market conditions. Rather, Ryan seems terrified that the tide will really turn, that he could do without Call of Duty in a hypothetically distant future where PlayStation, for whatever reason, is already at the bottom, just like Xbox is now.

Certainly at the top of the world, PlayStation would do just fine without Call of Duty. But Ryan knows this situation may not last forever. The “console wars”, however online they may be, do produce sales winners and losers. While PlayStation is confident in its plans for five or even ten years, Ryan worries that Spencer’s Call of Duty promise will eventually expire. And if that happens and Sony isn’t still at the forefront of the console world, the loss of Call of Duty could be devastating.

It makes sense to be vehemently opposed to exclusivity when exclusivity is the tool of winners and losers. But markets are unpredictable. There is no guarantee of where a competitor will be in ten years. Ryan seems to think that unless he’s at the helm after those deals expire, Xbox will do to Sony exactly what Sony has been doing to Xbox for years…or much, much worse. Whether or not he is right in this belief is for the court to decide.

If the takeover goes through, he admits he’s stuck with Game Pass whether he likes it or not. “I disagree with the idea of ​​a multi-game subscription service as a business proposition for the future, but we do [Activision and Microsoft] “I can agree to disagree,” he said.

Kotick’s fundamental dislike of multi-game subscription services makes perfect sense. He has no prospect of profiting from them. Why on earth would he put Call of Duty on Game Pass when Activision is currently getting $70 per copy from millions of units sold? What’s the point of subscribing to Diablo 4 if people are already paying for it? If Activision’s games were less popular or had a shorter sales streak, it would make good business sense to eventually put them on a subscription service and make guaranteed money. But Activision Blizzard games have reached a level of notoriety where that’s no longer necessary. GTA 5 has been scarcely and briefly available on Game Pass in the decade since its release for the same reason: it doesn’t need to. A subscription deal would only hurt sales.

Which brings me back to Jim Ryan. Game Pass is most likely an excellent deal for developers who need the financial guarantee that Game Pass offers since their own sales prospects are uncertain enough. But I suspect Jim Ryan hasn’t spoken to Mike Rose or Tequila Works or the other developers Eurogamer spoke to. I suspect Jim Ryan is referring to the big publishers who don’t require a Game Pass, either because they have their own services to offer games (EA or Ubisoft), or because they’re Take-Two, Activision Blizzard, or even Nintendo: well massive that a guaranteed return in exchange for all units sold would be utter nonsense.

leaks in the boat

Before we get started, one last quick note from today. Perhaps today’s funniest revelation actually didn’t take place in court. It happened because some attorney, assistant, or anybody wasn’t looking closely enough at a felt-tip pen that he was using to edit some very, very confidential documents.

Lawsuits like this are a heyday for gaming media, not only because of what comes to light in normal litigation, but also because very secretive gaming companies keep messing things up like this in spectacular ways, leading to mountains of secrets being poured into end up in evidence folders. Aside from the Sharpie disaster above, last week we got a glimpse of a whole presentation of top-secret details from companies looking to buy Xbox, which has since been taken out of the binder and replaced with another version that offers way, way more to Everywhere were plastered over huge black editorial boxes. I expect we’ll see more of this tonight and tomorrow as the entire evidence folder was taken offline following the Sharpie incident.

It’s all pretty funny, but it has a much more important effect. Judge Jacqueline Scott Corley was a good thing in that regard, but both here and in the Epic v. Apple case, the U.S. judicial system has made it clear that while it allows legitimate company secrets to be protected, it is not equipped to do public relations work video game company. When game companies fight anything of this magnitude in court, it’s bound to result in some weird, underhanded gain in company transparency for consumers. The more they fight, the more we know.

There is still one day left in court, and the verdict is expected to be passed in the days that follow. You can check out our daily recaps here on IGN for the full day-to-day update on everything that’s happening in the FTC vs. Microsoft case, as well as our in-depth analysis of day one, day two and day three of the trial leading up to the meeting himself again tomorrow.

Rebekah Valentine is senior reporter for IGN. You can find her on Twitter @duckvalentine.

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