FTC v. Microsoft: all the news from the big Xbox courtroom battle
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Microsoft has filed its written declaration from CFO Amy Hood in lieu of her appearing at the witness stand for Microsoft’s lawyers. The FTC will still cross-examine Hood, though.
In the declaration Hood says Call of Duty exclusivity wasn’t part of Microsoft’s rationale behind the proposed Activision Blizzard acquisition:
The possibility of making Call of Duty exclusive to Xbox was never assessed or discussed with me, nor was it even mentioned in any of the presentations to or discussions with the Board of Directors. I understood the necessity of keeping Call of Duty on other platforms. The Acquisition’s strategic rationale and financial valuation are both aligned toward making Activision games more widely available, not less.
Hood also says Xbox has historically had a lower operating margin (profits) than Microsoft’s other lines of business. “Over time, we are striving to increase Xbox’s operating margin to bring it closer to those of Microsoft’s other lines of business.”
The Activision Blizzard deal must also immediately make money for Microsoft:
Another important component of the financial analysis was that the purchase had to be financially accretive to Microsoft’s shareholders in year one, meaning that the acquisition must immediately contribute to an increase in earnings per share.
