Day one of the FTC’s federal case vs the Microsoft Activision deal has passed, and with it some surprising bombshells have dropped.
But it’s safe to say, in between the back and forth between Microsoft and Activision on one side, and some of the regulators alongside Sony in the other, the last thing we expected to see was some friendly fire. But that’s exactly what happened when Xbox’s Corporate Vice President, Sarah Bond, went up to testify.
If you watched the Xbox Games Showcase two weeks ago, you remember Sarah. She was the first presenter to appear on that showcase, and if you were impressed with her presence there, you will be really shocked with what she brings to the California federal court.
As reported by Video Games Chronicle, she revealed that Microsoft actually went through a serious snag in negotiating with Activision CEO Bobby Kotick in the lead up to the Xbox Series X|S launch in 2020.
Bobby told the console maker that they needed to revise the revenue split that Activision was receiving. The industry standard, as far as what has been made public, gives the platform holder 30 % of revenue, and the game publisher/studio gets 70 % of that revenue.
Sarah then revealed that Activision basically held up Call of Duty: Black Ops Cold War, and future Call of Duty games, as leverage. The company did not start work on making Xbox Series X|S versions of these games until they got their way.
Quoting Sarah:
“It was clear that Call of Duty would be on PS5 and that would not have been good if it was not also on Xbox if it was launching at the same time. It was clear if we did not move beyond the standard rev share, he would not place Call of Duty on Xbox.”
Sarah and Microsoft’s other employees did not reveal what the new revenue split was, but allegedly the FTC mistakenly let it slip in court themselves. Activision received 80 % of revenue on their games, and 20 % went to Xbox, starting with the Activision and Blizzard games that were published on Xbox Series X|S.
Now, one may question why Sarah is even talking about this at all. It obviously does not put their potential partner, Activision Blizzard King, in a good light.
But Sarah is calculating that this revelation will put people’s perceptions of Microsoft’s relationship with Activision in a new light. It suggests that the negotiation for both companies to merge was not as easy as it seems, and that the two don’t necessarily have that simpatico a relationship as we presume they must have, since they’re merging.
Ultimately, it makes Microsoft seem a little more sympathetic, just a little bit. But also, it suggests that Microsoft and Activision really have a very convincing plan to come together if the latter decided they should go for it.
It makes one wonder if there will be more surprises waiting for us when the trial presumes next week.
