Xbox Head Phil Spencer Corrects FTC By Explaining How a $70 Billion Transaction Works

During yesterday’s hearing as part of the ongoing trial between the FTC and Microsoft/Activision-Blizzard, Xbox head Phil Spencer explained how a $70 billion transaction works.

The $68 billion megadeal between Microsoft and Activision-Blizzard doesn’t need further explanation. A lot has been said and written over the past year about the heavily-debated merger. Yesterday, Xbox head Phil Spencer took the stand when he was asked about various topics, including the exclusivity of Starfield, and Microsoft’s reasoning to buy Zenimax. In addition, Spencer said under oath that Call of Duty will remain on PlayStation 5 and future consoles.

“I would raise my hand”, Spencer pledged. “I will do whatever it takes. We have no plan. I’m making a commitment standing here that we will not pull Call of Duty – it is my testimony – from PlayStation. As you said, Sony obviously has to allow us to ship the game on their platform, but absent any of that, my commitment is, and my testimony is that we will continue to ship future versions of Call of Duty on Sony’s PlayStation 5.”

During the same hearing, the FTC’s lawyer also asked Spencer about the price that Microsoft is paying for Activision-Blizzard, which is, as the FTC lawyer believes, an “upfront” payment. In his response, Spencer explained that this isn’t how acquisitions work.

“No, when you acquire something it’s not a payment”, the Xbox boss explained. “It’s like when you buy a house. You’re buying an asset that has value so it’s really a transfer of cash into an asset called Activision, that you believe retains the value that you acquired.”

Spencer went on to say that the paid price for Activision-Blizzard is money spent is not correct. “So to try and characterize the $70 billion as somehow spent is incorrect. Financially, it’s really moving $70 billion in cash into an asset, which is a game publisher, that to us, is actually worth more than $70 billion, so it’s not spent.”

An interesting explanation from Spencer about how Microsoft classifies the planned megadeal. Earlier during yesterday’s hearing, Spencer said that he’s “never been around this much paper” while he glances through exhibits as part of the hearing.

We’ll update you as soon as more information about the FTC/Microsoft trial comes in. For now, stay tuned and discuss these interesting quotes from Spencer.