Remember SB 396 in Arkansas, which banned minors from an oddly specific set of web platforms? NetChoice — which also has active suits against Florida, Texas, and California — has sued to block it. You can read the full complaint here.
Microsoft’s attorney is asking Stuart to look at a revenue chart for Minecraft by platform, comparing different devices. Here’s loosely how it breaks down: Xbox is the smallest platform for Minecraft, PlayStation is roughly twice as big, and Nintendo’s platform is twice as big as PlayStation (or four times as big as Xbox.)
Mobile and PC numbers aren’t broken down, but they’re implied to be very large. Stuart also says this:
“Minecraft is one of the most profitable, if not the most profitable, IP that we have.”
The implication, of course, is that Microsoft would be leaving a lot of money on the table by locking it down — and that it would make just as little sense to take Call of Duty exclusive. The lawyer asks how Microsoft CFO Amy Hood would respond to a request like that. Stuart says:
“She would say probably that doesn’t make sense, we need to keep the existing business model running.”
Carlton has called putting Call of Duty on Game Pass a “prime” motivation of the merger, and he’s said Sony can avoid any ill effects by signing a deal with Microsoft. (Sony, very publicly, has not signed the offer.) He’s also claimed Sony is more motivated by blocking the merger than actually getting a good deal.
The FTC is prodding at all these claims, but unfortunately, much of what it’s asking him to read is under seal — so we aren’t hearing any of the details. What we do know is that the FTC is insinuating Carlton didn’t meaningfully analyze the actual proposed deal, something Carlton denies.
The early questioning of Microsoft’s expert involves jabs about how much Carlton’s getting paid ($2,000 an hour), which “percent of the academic sources you rely upon are written by you” (30 percent), and the number of federal cases (five) where at least some of his testimony as an expert witness has been excluded. This line of questioning isn’t unusual for expert witnesses — we saw it in the Epic v. Apple trial, for instance.
Carlton is here to contest the FTC’s claims about competition and the Microsoft acquisition. An FTC attorney is questioning him, asking him to lay out the evidence that’s gone into his expert opinion.
Microsoft’s CEO is the most powerful figure testifying during this trial, and one of the few executives who’s not focused primarily on games. His name hasn’t appeared that much in the Xbox vs. PlayStation drama so far, but he’s in a position to get questioned about Microsoft’s role as a potential “Big Tech” monopolist, not just a gaming one.
Microsoft’s witnesses have been reiterating that cloud gaming is a feature for Xbox, not a full present-day service. The FTC is using Fisher’s recorded testimony to rebut that idea. Here’s Fisher discussing cloud gaming as a category:
“I believe it is not speculative and I believe it will ultimately be successful.”
This depends on accessibility of content, he says, but it’s not the non-starter Microsoft is painting it as:
“It’s my strong belief that cloud gaming has a profitable future.”
As we’ve seen in earlier days of testimony, Microsoft didn’t want its first-party content on GeForce now — “no effing way,” Xbox Game Studios head Matt Booty said in 2021. (He says he feels differently now.)
That said, Fisher isn’t objecting to the proposed Activision Blizzard acquisition:
“I think it’s good for the industry.”
So says Nvidia’s Jeff Fisher, unsurprisingly! But enough of the PC vs. consoles wars. The FTC’s attorney is questioning Fisher about Nvidia’s previous discussions with the CMA, particularly the future of cloud gaming and its streaming service GeForce Now.
Fisher says GeForce Now doesn’t cannibalize the existing games market — users typically use “lower-end and incompatible systems,” says Fisher, to access games. “I do believe accessibility does bring in new gamers to high-end PC gaming,” and cloud gaming is part of that.
The FTC asks if Nvidia cloud gaming offers a “superior” experience to Xbox — Fisher says it’s “similar to or better than” the Xbox experience. “I believe that we have the capability of a tier of service that is better” than PlayStation’s service as well, he says.
The FTC’s attorney asks Kotick the difference between Call of Duty: Modern Warfare II and Call of Duty: Warzone — Warzone, of course, being the one with a mobile version. Regarding MWII, “it will get to the point where a lot of that content will be playable on the phone,” says Kotick, but not now — the FTC cites previous statements where Kotick says playing it on a phone would be “like using a refrigerator for a safe.”
