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Microsoft CEO Satya Nadella will appear in court in San Francisco on June 28, 2023. The CEOs of Microsoft and Activision Blizzard will testify to persuade a federal judge in California to reject the Federal Trade Commission’s efforts to block the $69 billion deal.
Shelby Knowles | Bloomberg | Getty Images
microsoft CEO Satya Nadella said Wednesday that he wants to end exclusive deals between video games and popular consoles.
Major gaming rivals Nintendo and Sony often release exclusive titles on their devices as a way to lure customers in a competitive market. Microsoft has adopted this strategy with the Xbox as well, but Nadella said the company “has a low share of the console market.”
“I have no love in that world,” Nadella said of the exclusive deal.
Nadella spoke at a hearing in federal court in San Francisco as the Federal Trade Commission sought legal help to block Microsoft from completing its $68.7 billion acquisition of the video game publisher. activision blizzard. The FTC is concerned that the partnership could cause Microsoft to withhold popular games in Activision’s library from other consoles, or degrade other consoles’ service.
Microsoft said it wants to add Activision games to its Game Pass subscription service. To allay regulatory concerns, Microsoft has proposed a 10-year deal to make Activision’s popular Call of Duty title available on Sony and Nintendo consoles.
Sony does not accept Microsoft’s offer and opposes acquisition of Activision.
“We believe this deal is bad for competition,” Jim Ryan, president of Sony Interactive Entertainment, said in a video affidavit shown in court on Tuesday.
Nadella’s take on consoles reflects his broader approach to technology platforms. Since taking over as his CEO in 2014, he has changed the culture of a company long known for its proprietary, closed-hire system, ensuring that its software works well not only on its own hardware, but across multiple devices. I have tried to make it work.
Microsoft brings Office productivity applications to apple Migrate your iPad and its SQL Server database software to Linux. Microsoft used to prioritize Windows, but now the operating system is not as important a revenue stream as it used to be. Microsoft said Windows accounted for just over 10% of its revenue in the third quarter of its fiscal year, down from about 25% in 2011.
A Microsoft spokesperson said Nadella’s comments on Wednesday “make it sufficiently clear that Microsoft will keep its promise to partners and the gaming community to bring more games to more players.” rice field.
Nadella also acknowledges that Microsoft has its challenges when it comes to gaming. Microsoft’s cloud service, available with Game Pass Ultimate subscriptions, is “just not good enough” as an alternative to the current platform, he said.
Activision CEO Bobby Kotick is skeptical of multi-game subscription services in general. He said in court Wednesday that his company has been conducting those experiments. NVIDIA’s GeForce Now was in the testing phase.
Kotick, who is headquartered in Santa Monica, Calif., said he still wants to do a deal with Microsoft, even if he has different opinions about subscriptions and whether subscriptions are a big deal.
“Being in Los Angeles and seeing big media companies move their content to these subscription streaming services and see their performance worsen,” Kotick said. Told.
Judge Jacqueline Scott Corey will decide whether the FTC will receive a preliminary injunction to prevent it from completing a deal with Microsoft. Meanwhile, in the UK, the Competition and Markets Authority moved to block the deal in April.
“In the view of the board, if the preliminary injunction is granted, we do not know how we will be able to continue trading,” Mr. Kotick said.
clock: FTC’s injunction against Microsoft-Activision merger is a ‘positive development,’ says TD Cowen’s Aaron Glick