The Microsoft FTC trial is a wrap, and while we don’t have a ruling yet, we learned a lot of inside industry information that’s not usually available to the public.
From drama surrounding the exclusivity of Starfield and other Bethesda titles to the cost of producing huge AAA games like The Last of Us Part II, there were plenty of bombshell reveals from this week’s court battle. Here are 12 big things we learned from the Xbox FTC hearing.
Xbox Admits It Lost the Console Wars
The entire Xbox/Activision Blizzard saga has been filled with both Microsoft and Sony downplaying their respective achievements to appear as meek as possible to regulators. The FTC hearing was no exception, as the week kicked off with news of Microsoft claiming Xbox has officially “lost the console wars”.
Microsoft claimed its original Xbox was crushed by Sony and Nintendo when it entered the market in 2001, and the company said it’s been “losing” the “console wars” ever since. Citing numbers from 2021, Microsoft said Xbox held a 16% share of the console video game market. Xbox’s Phil Spencer also said a piece on the console wars, calling it a “social construct within the community” during his testimony.
Microsoft Says Next Gen Could Start in 2028
Years of hardware shortages and a slew of cross-generation game releases can make it feel like this console generation just started. But the reality is that we’re creeping up on the PlayStation 5 and Xbox Series X|S’ third birthday parties. In court documents reviewed by IGN, Microsoft is expecting the next generation — meaning the PlayStation 6 and Xbox Series X|S successor — to begin in 2028.
If Microsoft’s projection remains accurate, that means we’re just a year-and-a-half away from the halfway point of this current generation. 2028 places the PS5 and Xbox Series on an eight-year cycle, which is one year longer than the PS4 and Xbox One, and roughly the same length as the Xbox 360/PS3 generation.
Microsoft Wanted to Scoop Up Bungie, Sega, Square Enix, Zynga, and More
The last few years have seen the gaming industry’s biggest players go on an acquisition spree. We’ve seen Sony acquire Bungie, Microsoft acquire Bethesda, and a lot more. But in court documents, we’ve learned that Microsoft had plans for some big-name transactions that didn’t end up happening.
Namely, Microsoft had conversations about acquiring Sega, Square Enix, Zynga, and even Bungie before Sony bought them. But Microsoft’s ambitions went well beyond these big players. Internal documents reveal a list of 100 developers Microsoft considered at one point, before narrowing it down to eight final candidates. This list included Hades developer Supergiant Games, Pokemon GO’s Niantic, IO Interactive, and more.
AAA Sony Games Cost $200 Million-Plus to Produce
We’ve always known modern AAA video games cost a ton of money to make. But now we have a good idea of just how expensive some of these games are. In a poorly-redacted document submitted by Sony Interactive Entertainment, we learned The Last of Us Part II cost $220 million to develop, while Horizon Forbidden West cost $212 million. In the document, PlayStation said the costs are justified because AAA games “create deep and ongoing engagements with players.”
These costs give more context to recent comments from Xbox Game Studios’ Matt Booty, who said big-budget AAA games cost a half-decade or more to make, and failure can potentially ruin a studio.
Call of Duty Is, in Fact, Worth a Lot of Money
Unsurprisingly, Call of Duty was at the center of almost the entire courtroom battle over the last week. Activision’s biggest asset came up repeatedly, with the FTC raising concerns about exclusivity, or the potential of Activision releasing a worse version of Call of Duty on PlayStation.
Call of Duty’s impact makes sense, given that the same poorly-redacted document from Sony revealed that Call of Duty generated over $800 million for PlayStation in the United States alone in 2021. From Phil Spencer testifying under oath that Xbox will keep Call of Duty on PlayStation, to claims that Activision CEO Bobby Kotick threatened to pull Call of Duty from Xbox unless Microsoft granted Activision a higher revenue share, we learned a lot about the value of the franchise to both Sony and Microsoft.
Jim Ryan Doesn’t Think Starfield’s Exclusivity Is Anti-Competitive and Says PlayStation Will Be Fine
PlayStation boss Jim Ryan made it very clear that he’s not a fan of Starfield’s Xbox exclusivity. That being said, he admitted he doesn’t think it’s anti-competitive. Publicly, PlayStation has been the biggest opponent of the Microsoft Activision merger. But privately, it’s a bit of a different story.
In an email sent after Microsoft announced its intent to acquire Activision Blizzard, Ryan wrote, “I’m pretty sure we will continue to see Call of Duty on PlayStation for many years to come,” expressing that PlayStation would be more than okay if the transaction was approved.
Starfield Almost Skipped Xbox Entirely
Starfield is coming out this September as an Xbox exclusive, but that wasn’t always going to be the case. Xbox boss Phil Spencer confirmed that Starfield was potentially going to skip Xbox entirely prior to Microsoft’s acquisition of ZeniMax.
Xbox was worried about losing out on Starfield following PlayStation’s exclusivity deals for Bethesda games like Ghostwire: Tokyo and Deathloop. Spencer said Microsoft had to secure content for Xbox to “remain viable in the business.” Xbox did so by acquiring ZeniMax altogether, locking down Starfield as an Xbox exclusive.
Drama Surrounding Bethesda Exclusivity: Indiana Jones, Elder Scrolls, and More
The FTC tried to prove that Xbox’s treatment of ZeniMax games could demonstrate how the company will handle exclusivity when it comes to Activision Blizzard games. One piece of evidence used was a chat exchange between Xbox’s Tim Stuart and Matt Booty. The chat log focused on a November 2021 meeting, where Phil Spencer apparently decided to make all future Bethesda games Xbox exclusives, not just new IP.
Exclusives came up in a number of different ways during the hearing, specifically in regard to ZeniMax studios. We learned that MachineGames’ upcoming AAA Indiana Jones game was at one point set to be a multiplatform release before Microsoft’s acquisition changed plans. In terms of other future games, Spencer claimed that final decisions on platforms for upcoming Bethesda games like Obsidian’s The Outer Worlds 2 and Bethesda Game Studios’ The Elder Scrolls 6 have not been made yet. But with Spencer’s apparent decision in mind, it seems like deciding Xbox exclusivity for those titles could be more of a formality than an actual decision at this point.
The Elder Scrolls 6 Is a Long Ways Off
Speaking of The Elder Scrolls 6, don’t expect to play the Skyrim follow-up anytime soon. We already knew The Elder Scrolls 6 was set to be Bethesda Game Studios’ next priority following Starfield (With Fallout 5 coming after TES6), but Spencer said the game is still “five plus years away.” Five years from now is 2028, which puts us in the window for the next console generation we discussed earlier. So, it’s entirely possible that The Elder Scrolls 6 could be a cross-generation release, or skip this current generation of consoles entirely.
Everyone Says They Don’t Like Exclusives
For all the talk of exclusives, multiple industry figures took the stand and said they aren’t big fans of exclusive games. Microsoft CEO Satya Nadella said he “has no love” for console exclusives, and that Microsoft plays the exclusive game to stay competitive with market leaders. Activision CEO Bobby Kotick agreed, saying making Call of Duty Xbox exclusive isn’t in Activision’s best interest, and it would actually be detrimental to business.
“You would alienate over 100 million monthly active players,” Kotick said. “Half of them play on phones, but the rest of them play on computer and PlayStation, and you would have a revolt if you were to remove the game from more than one platform. Gamers are very passionate… And so with that kind of investment, time, and effort, you get an enthusiastic, passionate group of people.”
Sony’s Jim Ryan and Activision’s Bobby Kotick Had Words for Game Pass
PlayStation boss Jim Ryan had strong words for Xbox Game Pass, claiming he “talked to all the publishers, and they unanimously do not like Game Pass because it is value destructive.” Ryan also claimed Game Pass is unprofitable for Microsoft. IGN reached out to Xbox for comment, and Xbox pointed out that every Game Pass title announced at this month’s Xbox Games Showcase is coming from a creator that’s previously worked with the subscription service. And, there are multiple examples of publishers in favor of Xbox Game Pass, so it’s not entirely clear who exactly Ryan was referring to.
We know that Activision’s Bobby Kotick doesn’t want to see his games on subscription services, as he said, “I don’t agree with the idea of a multi-game subscription service as a business proposition going forwards, but we [Activision and Microsoft] can agree to disagree.”
Activision CEO Bobby Kotick Regrets Not Supporting Nintendo Switch
The Nintendo Switch is an undeniable smash hit. But that wasn’t obvious to everyone when Nintendo was emerging from the Wii U era in 2017. In fact, even Activision’s Bobby Kotick underestimated the Nintendo Switch when he saw a prototype for the machine. Now, he admits it was a mistake to not develop more software for Switch, and says Activision will consider putting Call of Duty on future Nintendo consoles once they have the specs of the next device.
There’s a lot more to read about regarding this week’s huge trial while we all wait for a ruling. Check out our analysis pieces about how Microsoft’s mask is slipping, and Activision’s claims that the FTC “doesn’t really understand our industry.” And, IGN Senior Reporter Rebekah Valentine was in the courtroom all week long, and she wrote analyses and recaps for every day of the hearing. Or, for all the news highlights, check out our full recap of the Microsoft FTC hearing.
Logan Plant is a freelance writer for IGN covering video game and entertainment news. He has over seven years of experience in the gaming industry with bylines at IGN, Nintendo Wire, Switch Player Magazine, and Lifewire. Find him on Twitter @LoganJPlant.