Xbox chief Phil Spencer says he had a call with Sony CEO Kenichiro Yoshida shortly after announcing Microsoft’s Activision deal. “I got positive affirmations from Yoshida-san,” says Spencer. He also had a “slightly longer” call with PlayStation chief Jim Ryan but the outcome was similar:
“He understood our rationale behind the deal. I think the email exchange showed he understood this was not about PlayStation.”
We heard about that email yesterday.
We know Microsoft wants to build a mobile Xbox store to take on Google and Apple, and Xbox chief Phil Spencer is taking shots at those platform holders today.
“Both Google and Apple exert control over the largest gaming platform,” says Spencer. “Apple won’t let us put a streaming app in their store, so we can’t bring console games through their storefront.”
Asked why Apple isn’t allowing an Xbox app in the App Store, Spencer says it’s about competition.
“Its competition for their control in the largest gaming platform. These are games that players want to play, we have a delivery mechanism to deliver games, they choose to block it.” He says Apple has “been allowed to do that.”
I wonder if Phil Spencer is wearing this T-shirt under his suit and tie? After all, Spencer says the console wars are a social construct.
Activision is key to Microsoft’s mobile strategy, Microsoft has argued over the past year. But this isn’t the first time Microsoft has tried to get into mobile. “We entered into some discussions with a company called Zynga, it ended up getting acquired by Take-Two,” says Spencer. Microsoft spent a lot of time talking to Zynga, Spencer confirms.
“In the end for our opportunity, we thought we needed to have something that was even bigger than Zynga was given our very small starting space in the mobile business.”
We’re on a 45-minute lunch break, so it’s time once again to recap Phil Spencer’s testimony. We knew there would be a lot here and there’s still more to come, but here’s what has happened so far:
• The FTC questioned Spencer about the Nintendo Switch, fps, teraflops, and lots more.
• Phil Spencer is asked whether Xbox lost the console wars, to which he responds that the console war is a “social construct” and he doesn’t wanna count the community out, but that Xbox is “in third place.”
• Sony is an aggressive competitor that spends its revenues on doing things to try and reduce Xbox’s survival on the market, says Spencer.
• Spencer says Sony is “actively signing third-party games to skip our platform,” as he is questioned over Microsoft acquiring exclusive content.
• Microsoft has thought about skipping PlayStation for Activision games and even considered making Minecraft Dungeons Xbox exclusive.
• Sony held back PS5 devkits which “put us behind on our development for Minecraft on PS5,” says Spencer.
• An internal email chain between Xbox’s Sarah Bond, Matt Booty, and Phil Spencer reveals how Microsoft planned to talk about the Bethesda acquisition as “making Xbox stronger.”
• Phil Spencer won’t confirm Elder Scrolls VI is an Xbox exclusive, and it sounds like it’s still many, many years away.
• Microsoft won’t degrade Call of Duty on PlayStation, says Spencer.
• Spencer swears under oath that he won’t pull Call of Duty from PlayStation.
The FTC references a February 2021 email between Xbox’s Sarah Bond, Matt Booty, and Phil Spencer about how to announce the Bethesda acquisition.
“I want us to be bold in our announce of the Bethesda close, focus on Bethesda on Xbox,” Spencer wrote at the time. “I want us to get comfortable with saying... the acquisition of Bethesda is about making Xbox stronger. Our focus with Bethesda will be on the Xbox ecosystem.”
The FTC wants to know if Spencer had any other conversations with Microsoft executives about making Bethesda games exclusive to Xbox. “Exclusivity is a general topic in the console business, so it’s a constant conversation,” says Spencer.
“Do you anticipate Call of Duty on Switch will look the same to a player as if that player was playing on Xbox Series X?” asks the FTC. “I think it will play as a great Switch game,” says Xbox chief Phil Spencer. “I don’t think it will look the same.”
The FTC now wants to know if Microsoft has done any economic analysis of Nintendo in terms of the Activision Blizzard deal. Presumably because creating a version of Call of Duty for Nintendo Switch will be costly. The FTC once again wants to determine that the Switch is separate from its “high performance” console market.
The FTC lawyer then reminds Spencer of the Bethesda roundtable press event. “Do you remember that you said that if you’re an Xbox customer, this is about delivering great exclusive games for you on platforms where Game Pass exists?” asks the FTC. “Yes, I do,” says Spencer.
Xbox exclusive games is another key part of the FTC’s case, where the regulator believes Microsoft will make Activision Blizzard games exclusive to Xbox in a move it deems anti-competitive.
Minecraft still doesn’t have an optimized version for PS5, and it appears that a Sony decision to hold back sending Microsoft PS5 devkits ahead of launch is why.
“Sony was reluctant to ship us PlayStation dev kits... it put us behind on our development for Minecraft on PS5,” says Spencer. The FTC says Microsoft fought back by still not providing an optimized version of Minecraft on PS5 nearly three years later.
“There is a version of Minecraft that runs on PS5,” says Spencer, but this isn’t an optimized version it’s simply the PS4 version of the game. There isn’t an Xbox Series S / X optimized version of Minecraft, either.
Microsoft considered only shipping Minecraft Dungeons on Xbox and PC. The FTC references a chat between Phil Spencer and former Xbox CMO Mike Nichols where both considered and agree it should be exclusive to Xbox.
Minecraft Dungeons eventually shipped on PlayStation, Xbox, PC, and Nintendo Switch.
