Tom Warren

Senior Correspondent

Tom WarrenJun 23, 2023

Google prototyped Stadia running on Windows servers.

Google’s former Stadia product lead, Dov Zimring, has given us some early insights into Stadia development:

“We had prototyped on Windows early on... the mission we had established at the very beginning was to enable revolutionary experiences... we saw Windows as limiting to innovate in that regard because we didn’t have control over the operating system.”

Google did hint at Windows games running on Stadia, but that’s very different to actually running Stadia games on a Windows server.

So why didn’t Google go with Windows for Stadia?

“[Windows] would have doubled our total cost of operating on hardware that was equivalent to the 8th generation consoles, like the PlayStation 4.”

Image: Google

Tom WarrenJun 23, 2023

What was Stadia?

The FTC opens its questioning of Dov Zimring, Google’s former Stadia product lead, by asking what Stadia was and when it was shut down.

Zimring says it was key for Stadia to “have sufficient content... to have blockbusters at the right time,” which is probably a big part of why it failed. Asked about Stadia’s technology, Zimring says:

“To our knowledge we had the best technology in the market. We had performance capabilities that didn’t exist in the [cloud] market like 4K.”

Tom WarrenJun 23, 2023

Google’s former Stadia product lead is taking the stand.

Up next we have Dov Zimring, Google’s former Stadia product lead. The FTC has been focusing on Microsoft’s cloud competition in this case, so we’re likely to hear more about that. Perhaps we’ll even get some insight into why Google shutdown Stadia earlier this year.

During yesterday’s testimony we learned that Microsoft was working on a separate “dedicated” version of Xbox Cloud Gaming in September 2022. That’s the same month Google announced its Stadia shutdown. Microsoft now says it’s no longer planning a separate version due to costs and usage.

Dov Zimring, Google’s former Stadia product lead.

Tom WarrenJun 23, 2023

Spencer is teaching the FTC how acquisitions work.

You can tell Xbox chief Phil Spencer is frustrated by the FTC’s questions here. He remains calm, but he shoots back to illustrate his knowledge of financials and acquisitions.

“Now you have a $70 billion upfront payment to Activision, right?” asks the FTC lawyer. Spencer’s response:

“No, when you acquire something it’s not a payment. It’s like when you buy a house. You’re buying an asset that has value so it’s really a transfer of cash into an asset called Activision, that you believe retains the value that you acquired. So to try and characterize the $70 billion as somehow spent is incorrect. Financially, it’s really moving $70 billion in cash into an asset, which is a game publisher, that to us is actually worth more than $70 billion, so it is not spent.”

Tom WarrenJun 23, 2023

We’re back to the FTC and Microsoft arguing about the Switch.

This is getting rather tedious now. The FTC has console props in the courtroom to try and show the Xbox Series X / S and PS5 are very different to the Nintendo Switch.

It’s ”incorrect to say Nintendo isn’t a competitor,” says Xbox chief Phil Spencer and he comments on the visual appearance of the consoles in the courtroom:

“The PS5 and Xbox Series X shipped at the same time... from a form factor these two functionally look more equivalent.”

Tom WarrenJun 23, 2023

The FTC digs into the Xbox business.

The FTC wants to know about the Xbox business and why Microsoft is spending nearly $70 billion on Activision Blizzard.

FTC: your business is not necessarily meeting its internal targets today?

“It is not right now, no,” admits Spencer.

FTC: so you’re paying $70 billion for a mobile business?

“The business is across mobile, PC and console, but when you think about the unique opportunity relative to our business today, it’s that mobile engagement that Activision drives.”

Spencer then says Microsoft is trying to grow the overall Xbox business it’s not just about console:

“We are trying to compete in the market by growing our business. Some of our business growth is something that our competitors would like to have, so some of our growth is probably from our competitors not realizing that growth themselves.”

Tom WarrenJun 23, 2023

We’re back and the FTC is grilling Spencer on CoD.

The FTC is back to question Phil Spencer, and the FTC’s lawyer wants to run a little late to make sure we hear from a Google witness about Stadia.

The FTC begins by asking Spencer “can you swear under oath that you can promise that you’ll ship Call of Duty on PlayStation” without looking at the terms?

“That’s my goal yes. If what you’re trying to propose is that Sony might change the terms of how we ship games on our platform then that would prohibit us from shipping on their platforms.”

The FTC asks why the contract for CoD on PlayStation is different to standard Sony contracts:

“Sony is asking for significant commitments... even thought we know how to ship games on PlayStation that we do on a regular basis.”

After some back and forth about whether future Activision games will ship on PlayStation, a Microsoft lawyer objects and Judge Corley cuts in. “Your point has been made, move along.”

Tom WarrenJun 23, 2023

10-minute break, let’s recap.

Spencer has spent most of his time after lunch discussing mobile, how Microsoft thought about buying Zynga, relationships with Sony, and how Microsoft’s rivals have far more exclusive games. This is your latest recap:

• Microsoft found “very limited success” of making mobile games outside of Minecraft.

• Microsoft tried to buy Zynga to rectify its missed mobile gaming opportunity.

• Microsoft acquired Bethesda after hearing Starfield would be a PlayStation exclusive.

• Spencer takes shots at Apple.

• Microsoft and Sony discussed the Activision deal with “positive affirmations” from Sony’s CEO.

• Spencer says Microsoft’s rivals have far more exclusive games

Tom WarrenJun 23, 2023

Spencer says rivals have far more exclusive games.

The FTC is worried about Microsoft making Activision Blizzard games exclusive, but Xbox chief Phil Spencer says competitors have a much larger collection of exclusives:

“Sony has a significant catalog of exclusives games. It’s drastically larger, dramatically larger than what we have on Xbox today. Both Sony and Nintendo’s first-party is stronger than Xbox.”

He also argues exclusives are just a normal part of the gaming business now:

“It is an established part of the console business, and Sony and Nintendo are very strong with their exclusive games.”

Sony also has an exclusive marketing deal for Final Fantasy XVI, says Spencer.

Tom WarrenJun 23, 2023

‘I’ve never been around this much paper.’

Phil Spencer is flicking through exhibits as he continues to be questioned by Microsoft’s lawyers about the Xbox business. He jokes he’s “never been around this much paper.”

The exchange followed questions around Xbox exclusives.

“Is it incorrect or correct to say that Microsoft will always make its games exclusive?” asked Microsoft’s lawyer.

“That’s incorrect,” says Spencer.

“Does that include ZeniMax games?”

“Yes,” says Spencer.

“And Activision games?”

“Yes,” Spencer confirms.

Microsoft argues exclusivity will always be a case-by-case decision, but the FTC fears it will make plenty of Activision games exclusive.

Evidentiary Hearing Held In San Francisco As FTC Seeks Injunction In Microsoft And Activision Blizzard Merger

Phil Spencer talks with Microsoft attorney Beth Wilkinson.

Photo by Justin Sullivan/Getty Images

Tom Warren

Senior Correspondent

Senior Correspondent

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Tom Warren

Senior Correspondent

Senior Correspondent

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