Sean Hollister

Lawyers just showed that ABK also considered a different deal with a redacted company. The business presentation included this note:

“Note: these deals are mutually exclusive and ABK will only enter into the one we determine as the best option.” Zerza confirms ABK choose Google over the other company, and (Google’s? Epic’s?) lawyer is driving home that ABK did so because the terms of the deal were simply better for ABK.

One of those terms that I managed to nab before it flashed off-screen:

We briefly saw the entire term sheet, but it was shown too small for us to read.

However, there’s apparently a document that implies the January 2020 deal did derail the Project Boston plan to do so, at least: “It led us to make the decision to pivot the plans for Boston,” read a lawyer, off a document I didn’t manage to see myself.

Here is another bullet about its proposed app store I missed getting into earlier posts:

ABK had an “estimated steady state goal of 10-12%” for its store, rather than the 30 percent fee it pays Google, according to the Boston presentation. Zerza said he couldn’t confirm the number.

In 2021, the plan was to reach “ABK solution at scale,” with 45–70 employees working on the project.

ABK’s CFO says that sounds very low. “This is not consistent with what I think it would take to develop a store like this,” he says, saying other internal efforts have hundreds of people.

The first version would have exclusively had King games like the mega-popular Candy Crush, but could stretch to Activision and Blizzard games later.

Details:

“Goals”:

Here’s the part where ABK suggests it could stretch to Blizzard games:

The MVP would have had 15 people working on it within the company, according to the slide we’re seeing.

Overall, the app would be:

I’m copying down the details about those paths best I can:

“At the time, we were talking to Google about an enterprise-wide deal which we obviously signed with Google in early 2020,” says the company’s CFO.

“At the same time we were also looking at our own mobile store,” he says. ABK wants you to think it genuinely pursued these ideas in parallel, but he hasn’t yet told us when ABK stopped pursuing the store.

Correction: I typo’d: the Google deal was early 2020, not early 2022.

“Project Boston” shows two parallel “paths” for ABK through the mobile app landscape, only one of which would be chosen in the end.

ABK wanted either a mobile app store or, alternatively, a $100M+ deal with Google. We know which one it got.

“Path 1: Enterprise negotiation” read: “capture stronger economics for ABK across mobile, YouTube, advertising, media spend, and cloud” and “$100M+ per year value creation for ABK and growth in overall book of business between ABK and Google”

“Path 2: Build own mobile store” includes this incredibly important bit, which ABK bolded for emphasis: “Should we secure real savings with Google, we would deprioritize path 2.”

“We have already announced CoD and Diablo mobile, more to come,” he teased.

In a 2022 video deposition, he told the court there were many reasons to explore the idea:

It would have had an interoperable account system, and the idea was to build the storefront first, then add marketing and promotions later on, according to the emails.

But in the 2022 deposition we’re hearing now, Zerza claims they were “very early exploratory discussions.”

“Obviously we never pursued it because it wasn’t financially attractive for us,” he says.

Lawyers questioning him are asking questions designed to see how serious ABK really was, and whether it lied to partners about its plans. Whether Google and Epic believed Activision Blizzard is relevant to this case.

The goal: “one single mobile games store focused on distribution of mobile games (“STEAM of Mobile” concept), including a single payment system.”

We’re seeing their emails in court right now:

Now, we’re hearing they wanted to build a mobile game store together, too.

We’ve now moved on to a September 22nd, 2022, video deposition with Activision Blizzard CFO Armin Zerza.