From the documents made public as part of the Microsoft-FTC trial regarding the company’s Activision Blizzard acquisition, it seems like next-generation consoles won’t arrive until 2028. This means that, at least according to Microsoft, the “expected starting period” of the next Xbox and Playstation 6 will be eight years after the launch of the Xbox Series X/S and Playstation 5.
This is not a good time for Xbox regardless as it heads to fight its $69 billion acquisition battle in federal court. The FTC even got a federal court in California to issue a temporary restraining order essentially blocking the Microsoft and Activision Blizzard deal for the time being.
As for the trial itself, the FTC is looking to impose a preliminary injunction on Microsoft and Activision. If the FTC wins, Microsoft won’t be able to go ahead with the acquisition unless the FTC reviews the transaction and deems it in compliance with US antitrust law.
Other than the legal battle it’s fighting the disclosed documents also reveal that Microsoft has also had to admit defeat for the Xbox lagging behind Nintendo and Sony in console sales figures. The Xbox only had a 16% share of the market in terms of console sales in 2021 and 21% of the console install base.
However, Microsoft’s keenness to show that it’s behind Sony and Nintendo since the beginning and the fact that “Xbox has lost the console wars” with rivals continuing to dominate by leveraging exclusive content among other strategies might work out in its favour. The court documents clearly show Microsoft’s willingness to accept third place in the overall console fight, lending it all the more reason to acquire Activision.
Microsoft has been working hard and signing deals left and right to assure regulators it won’t close off Activision and its popular games like the Call of Duty and Diablo franchises to everyone else. These also involve signing numerous deals with other companies, including a 10-year deal with Nintendo to bring the Call of Duty franchise to the latter’s platforms. Another major signing was bringing Xbox games to Nvidia’s GeForce Now, resolving Nvidia’s concerns with the acquisition and ensuring the GPU manufacturer’s “full support for regulatory approval of the acquisition”.
A similar deal with Sony has also been drafted with Microsoft promising continued distribution of all Activision games on the Playstation just as they would be brought to Xbox. Sony was sent a draft of this agreement back in December 2022 but has so far refused to cooperate with Microsoft.
Whatever the case might be, Sony is staunchly opposing the Microsoft-Activision deal to the point where Playstation CEO Jim Ryan said in a deposition in the case that Sony won’t be sharing Playstation 6 details with Activision in case the deal goes through. The public-facing versions of the documents are heavily redacted and leave quite a few things unexplained, but they clearly communicate Sony’s stance on the deal.