Xbox Admits It Lost the Console Wars
The Xbox/Activision Blizzard saga has seen both Microsoft and Sony downplay their achievements to appear as meek as possible to regulators. The FTC hearing saw Microsoft claiming Xbox has officially “lost the console wars.” Microsoft claimed its original Xbox was crushed by Sony and Nintendo upon its 2001 market entry and has been “losing” ever since. Citing 2021 numbers, Microsoft reported a 16% share of the console video game market for Xbox. Xbox’s Phil Spencer also characterized the console wars as a “social construct within the community” during his testimony.
Microsoft Says Next Gen Could Start in 2028
Hardware shortages and cross-generation game releases can make it feel like this console generation just started. However, the PlayStation 5 and Xbox Series X|S are nearing their third birthdays. In court documents, Microsoft expects the next generation – PlayStation 6 and Xbox Series X|S successor – to begin in 2028. If Microsoft’s projection holds true, the PS5 and Xbox Series would be on an eight-year cycle, one year longer than the PS4 and Xbox One, and roughly the same length as the Xbox 360/PS3 generation.
Microsoft Wanted to Scoop Up Bungie, Sega, Square Enix, Zynga, and More
Recent years have seen gaming industry giants engage in an acquisition spree. Sony acquired Bungie, Microsoft acquired Bethesda, and more. Court documents reveal Microsoft had plans for big-name transactions that didn’t materialize. Namely, Microsoft held discussions about acquiring Sega, Square Enix, Zynga, and even Bungie before Sony acquired them. Beyond these big players, internal documents reveal a list of 100 developers Microsoft considered, ultimately narrowing down to eight finalists. This list included Supergiant Games (Hades), Niantic (Pokemon GO), IO Interactive, and others.
AAA Sony Games Cost $200 Million-Plus to Produce
We’ve always known modern AAA video games are expensive to produce. Now we have a good idea of just how expensive some of these games are. A poorly-redacted document submitted by Sony Interactive Entertainment revealed that The Last of Us Part II cost $220 million to develop, while Horizon Forbidden West cost $212 million. PlayStation justified these costs by saying that AAA games “create deep and ongoing engagements with players.” These costs provide context to recent comments from Xbox Game Studios’ Matt Booty who said big-budget AAA games take a half-decade or more to make and failure could ruin a studio.
Call of Duty Is, in Fact, Worth a Lot of Money
Call of Duty was at the center of the courtroom battle over the last week. Activision’s biggest asset was repeatedly discussed, with the FTC raising concerns about exclusivity and the potential for Activision to release a worse version of Call of Duty on PlayStation. The poorly-redacted document from Sony revealed that Call of Duty generated over $800 million for PlayStation in the United States alone in 2021. From Phil Spencer’s sworn testimony that Xbox will keep Call of Duty on PlayStation to claims that Activision CEO Bobby Kotick threatened to pull Call of Duty from Xbox unless Microsoft granted Activision a higher revenue share, the value of the franchise to both Sony and Microsoft became clear.
Jim Ryan Doesn’t Think Starfield’s Exclusivity Is Anti-Competitive and Says PlayStation Will Be Fine
PlayStation boss Jim Ryan made it clear that he isn’t a fan of Starfield’s Xbox exclusivity but admitted he doesn’t think it’s anti-competitive. Publicly, PlayStation has been the biggest opponent of the Microsoft Activision merger, but privately, it’s a different story. In an email following Microsoft’s announcement of its intention to acquire Activision Blizzard, Ryan wrote, “I’m pretty sure we will continue to see Call of Duty on PlayStation for many years to come,” expressing that PlayStation would be okay with the transaction being approved.
Starfield Almost Skipped Xbox Entirely
Starfield is set to be an Xbox exclusive in September, but that wasn’t always the case. Xbox boss Phil Spencer confirmed that Starfield was potentially going to skip Xbox entirely prior to Microsoft’s acquisition of ZeniMax. Xbox was concerned about losing Starfield following PlayStation’s exclusivity deals for Bethesda games like Ghostwire: Tokyo and Deathloop. Spencer stated that Microsoft needed to secure content for Xbox to “remain viable in the business.” By acquiring ZeniMax, Xbox secured Starfield as an Xbox exclusive.
Drama Surrounding Bethesda Exclusivity: Indiana Jones, Elder Scrolls, and More
The FTC attempted to prove that Xbox’s treatment of ZeniMax games could demonstrate how it would handle exclusivity with Activision Blizzard games. One piece of evidence used was a chat exchange between Xbox’s Tim Stuart and Matt Booty. The chat log focused on a November 2021 meeting where Phil Spencer apparently decided to make all future Bethesda games Xbox exclusives, not just new IP. Exclusives came up frequently during the hearing, particularly regarding ZeniMax studios. We learned that MachineGames’ upcoming AAA Indiana Jones game was originally planned for multiplatform release before Microsoft’s acquisition changed plans. Regarding future games, Spencer claimed that final decisions on platforms for upcoming Bethesda games like Obsidian’s The Outer Worlds 2 and Bethesda Game Studios’ The Elder Scrolls 6 haven’t been made yet. However, considering Spencer’s decision, it seems like deciding Xbox exclusivity for those titles could be more of a formality at this point.
The Elder Scrolls 6 Is a Long Ways Off
Don’t expect to play The Elder Scrolls 6 anytime soon. We already knew The Elder Scrolls 6 was set to be Bethesda Game Studios’ next priority following Starfield (with Fallout 5 coming after TES6), but Spencer stated the game is still “five plus years away.” Five years from now is 2028, which puts us in the window for the next console generation. It’s possible that The Elder Scrolls 6 could be a cross-generation release or skip this current generation of consoles entirely.
Everyone Says They Don’t Like Exclusives
Despite all the talk of exclusives, multiple industry figures said they aren’t fans of exclusive games. Microsoft CEO Satya Nadella said he “has no love” for console exclusives and that Microsoft plays the exclusive game to stay competitive with market leaders. Activision CEO Bobby Kotick agreed, saying making Call of Duty Xbox exclusive isn’t in Activision’s best interest and would be detrimental to business. “You would alienate over 100 million monthly active players,” Kotick said. “Half of them play on phones, but the rest of them play on computer and PlayStation, and you would have a revolt if you were to remove the game from more than one platform. Gamers are very passionate… And so with that kind of investment, time, and effort, you get an enthusiastic, passionate group of people.”
Sony’s Jim Ryan and Activision’s Bobby Kotick Had Words for Game Pass
PlayStation boss Jim Ryan had strong words for Xbox Game Pass, claiming he “talked to all the publishers, and they unanimously do not like Game Pass because it is value destructive.” Ryan also claimed Game Pass is unprofitable for Microsoft. iGV reached out to Xbox for comment, and Xbox pointed out that every Game Pass title announced at this month’s Xbox Games Showcase is coming from a creator that’s previously worked with the subscription service. And, there are multiple examples of publishers in favor of Xbox Game Pass, so it’s not entirely clear who exactly Ryan was referring to. We know that Activision’s Bobby Kotick doesn’t want to see his games on subscription services, as he said, “I don’t agree with the idea of a multi-game subscription service as a business proposition going forwards, but we [Activision and Microsoft] can agree to disagree.”
Activision CEO Bobby Kotick Regrets Not Supporting Nintendo Switch
The Nintendo Switch is an undeniable smash hit, but that wasn’t obvious to everyone when Nintendo was emerging from the Wii U era in 2017. Even Activision’s Bobby Kotick underestimated the Nintendo Switch when he saw a prototype for the machine. Now, he admits it was a mistake to not develop more software for Switch and says Activision will consider putting Call of Duty on future Nintendo consoles once they have the specs of the next device.
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