Tom Warren

If you’ve missed out on the hearing over the past few days, here’s where to catch up:

• Day 1: Microsoft opened the FTC hearing with a Sony bombshell

• Day 2: Has Xbox really lost the console wars?

• Day 3: Sony’s PlayStation chief says publishers hate Xbox Game Pass

• Day 4: Microsoft and Activision CEOs battle to keep a giant Xbox deal alive

First we learned that the Competition and Markets Authority (CMA) in the UK filed to try and delay Microsoft’s appeal of its Activision Blizzard acquisition decision. The Competition Appeal Tribunal (CAT) shut that request down, as it would have pushed the appeal process from July to October — “contrary to justice and fairness.”

Next Canada’s competition regulator intervened with a letter to Judge Corley pointing out it had “concluded that the proposed merger is likely to result in a substantial prevention and / or lessening of competition” in consoles, multi-game subscriptions, and cloud gaming.

Microsoft hit back almost immediately with a statement pointing out that the formal period for Canada’s regulator to prevent the deal from closing has already passed.

There’s already a lot going on with the FTC v. Microsoft case and many moving parts with other regulators as Microsoft approaches the July 18th deadline when its deal with Activision Blizzard expires.

And no, he’s not named after Frank Shaw, lead communications at Microsoft. The only similarities here are that they both growl sometimes 😉

If you missed Xbox CFO Tim Stuart’s earlier testimony then we have a recap right here. Let’s recap what Stuart said since then:

• Microsoft has Xbox Game Pass strategy tiers

• The Xbox mobile store gets a mention

• Microsoft has been contemplating the financial gaps of Xbox exclusivity

• The FTC accidentally lets slip that Xbox Game Pass would need to grow by 2 million subs a year to help offset Call of Duty exclusivity

• Nintendo Switch impacted Xbox Series S pricing

• The Xbox oil company and a mobile future

• Minecraft is a “significant” revenue driver for Microsoft, but not thanks to Xbox.

We’ll be back at 2:30PM PT / 5:30PM ET for closing arguments.

Microsoft has now responded, making it clear the formal period for Canada’s regulator to prevent the deal from closing has already passed:

Obviously the oil part here is consoles. He clarifies his comments:

That doesn’t mean Microsoft thinks Xbox consoles are about to die, but it sure means they don’t see much revenue opportunity there compared to the mobile market.

Stuart confirms the Nintendo Switch is an Xbox competitor and has impacted the price of Xbox Series S:

It’s still not clear how much revenue Microsoft would lose in this scenario though, but it’s a surprise piece of data we weren’t expecting to hear today.

This has to be something that Microsoft commonly looks as with these acquisitions, but the FTC points out that Xbox CFO Tim Stuart asks “What happens if revenue that Activision earns on PlayStation declines?” and then “Let’s calculate Game Pass subs and how much revenue would have to move over to Xbox to offset that gap.”

The FTC is implying here that Microsoft could take Call of Duty or other Activision games exclusive and try to make up the revenues with Xbox Game Pass subscriptions.

A colleague of Stuart’s, Jamie Lawver, a finance director at Xbox, ran the numbers to create a table that would show many subscribers Microsoft needed for Game Pass or how much Activision revenue would need to shift to console to make up for lost revenues from Sony.