Microsoft CEO Satya Nadella arrives to court in San Francisco on June 28, 2023. Microsoft and Activision Blizzard CEOs are expected to testify to persuade a federal judge in California to reject the Federal Trade Commission’s effort to block their $69 billion deal.
Shelby Knowles | Bloomberg | Getty Images
Microsoft CEO Satya Nadella said Wednesday that he would like to eliminate exclusive arrangements between video games and popular gaming consoles.
Larger gaming rivals Nintendo and Sony often release exclusive titles on their devices as a way to lure customers in a competitive market. Microsoft employs the strategy as well for its Xbox, though Nadella said his company is a “low share player in the console market.”
Regarding exclusive deals, Nadella said “I have no love for that world.”
Nadella spoke at a hearing in federal court in San Francisco, as the Federal Trade Commission seeks judicial support to prevent Microsoft from closing its $68.7 billion acquisition of video game publisher Activision Blizzard. The FTC is worried that the tie-up could allow Microsoft to withhold popular games in Activision’s library from other consoles or degrade service for those games elsewhere.
Microsoft has said it wants to add Activision games to its Game Pass subscription service. To quell regulator concerns, Microsoft has offered 10-year agreements to make Activision’s popular Call of Duty titles available for Sony and Nintendo consoles.
Sony hasn’t accepted Microsoft’s offer and is opposed to its acquisition of Activision.
“I believe that this transaction is bad for competition,” Jim Ryan, head of Sony Interactive Entertainment, said in a video deposition that was played in court on Tuesday.
Nadella’s view on consoles reflects his broader approach to technology platforms. Since becoming CEO in 2014, he’s changed the culture at a company long known for proprietary closed systems, attempting to ensure that its software can work well on multiple devices, not just its own hardware.
Microsoft has brought its Office productivity applications to Apple’s iPad and its SQL Server database software to Linux. In earlier years, Microsoft prioritized Windows, but today the operating system is no longer the crucial source of revenue that it was. In the fiscal third quarter, Microsoft said Windows represented just over 10% of revenue, down from about 25% in 2011.
A Microsoft spokesperson said Nadella’s comments on Wednesday “made it abundantly clear that Microsoft will honor its commitments to its partners and the gaming community to bring more games to more players.”
Nadella also acknowledges that, when it comes to gaming, Microsoft has challenges. Microsoft’s cloud service, which is available in Game Pass Ultimate subscriptions, is “just not good enough” as a substitute for current platforms, he said.
Activision CEO Bobby Kotick is skeptical of multi-game subscription services in general. He said in court on Wednesday that his company has experimented with them, including working with Nvidia’s GeForce Now while it was in a testing phase.
Kotick, whose company is based in Santa Monica, California, said he still wants to get the deal done with Microsoft even if he holds a differing opinion on subscriptions and whether they present a big opportunity.
“Maybe part of it is being in Los Angeles and having watched the big media companies move their content to these subscription streaming services, and the business results have suffered,” Kotick said.
Judge Jacqueline Scott Corley will decide if the FTC will receive a preliminary injunction that would stop Microsoft from closing the deal. Meanwhile, in the U.K., the Competition and Markets Authority moved to block the transaction in April.
“My board’s view is if the preliminary injunction is granted, they don’t see how the deal can continue,” Kotick said.
Paxton sued Google in 2022 for allegedly unlawfully tracking and collecting the private data of users.
The attorney general said the settlement, which covers allegations in two separate lawsuits against the search engine and app giant, dwarfed all past settlements by other states with Google for similar data privacy violations.
Google’s settlement comes nearly 10 months after Paxton obtained a $1.4 billion settlement for Texas from Meta, the parent company of Facebook and Instagram, to resolve claims of unauthorized use of biometric data by users of those popular social media platforms.
“In Texas, Big Tech is not above the law,” Paxton said in a statement on Friday.
“For years, Google secretly tracked people’s movements, private searches, and even their voiceprints and facial geometry through their products and services. I fought back and won,” said Paxton.
“This $1.375 billion settlement is a major win for Texans’ privacy and tells companies that they will pay for abusing our trust.”
Google spokesman Jose Castaneda said the company did not admit any wrongdoing or liability in the settlement, which involves allegations related to the Chrome browser’s incognito setting, disclosures related to location history on the Google Maps app, and biometric claims related to Google Photo.
Castaneda said Google does not have to make any changes to products in connection with the settlement and that all of the policy changes that the company made in connection with the allegations were previously announced or implemented.
“This settles a raft of old claims, many of which have already been resolved elsewhere, concerning product policies we have long since changed,” Castaneda said.
“We are pleased to put them behind us, and we will continue to build robust privacy controls into our services.”
Virtual care company Omada Health filed for an IPO on Friday, the latest digital health company that’s signaled its intent to hit the public markets despite a turbulent economy.
Founded in 2012, Omada offers virtual care programs to support patients with chronic conditions like prediabetes, diabetes and hypertension. The company describes its approach as a “between-visit care model” that is complementary to the broader health-care ecosystem, according to its prospectus.
Revenue increased 57% in the first quarter to $55 million, up from $35.1 million during the same period last year, the filing said. The San Francisco-based company generated $169.8 million in revenue during 2024, up 38% from $122.8 million the previous year.
Omada’s net loss narrowed to $9.4 million during its first quarter from $19 million during the same period last year. It reported a net loss of $47.1 million in 2024, compared to a $67.5 million net loss during 2023.
The IPO market has been largely dormant across the tech sector for the past three years, and within digital health, it’s been almost completely dead. After President Donald Trump announced a sweeping tariff policy that plunged U.S. markets into turmoil last month, taking a company public is an even riskier endeavor. Online lender Klarna delayed its long-anticipated IPO, as did ticket marketplace StubHub.
But Omada Health isn’t the first digital health company to file for its public market debut this year. Virtual physical therapy startup Hinge Health filed its prospectus in March, and provided an update with its first-quarter earnings on Monday, a signal to investors that it’s looking to forge ahead.
Omada contracts with employers, and the company said it works with more than 2,000 customers and supports 679,000 members as of March 31. More than 156 million Americans suffer from at least one chronic condition, so there is a significant market opportunity, according to the company’s filing.
In 2022, Omada announced a $192 million funding round that pushed its valuation above $1 billion. U.S. Venture Partners, Andreessen Horowitz and Fidelity’s FMR LLC are the largest outside shareholders in the company, each owning between 9% and 10% of the stock.
“To our prospective shareholders, thank you for learning more about Omada. I invite you join our journey,” Omada co-founder and CEO Sean Duffy said in the filing. “In front of us is a unique chance to build a promising and successful business while truly changing lives.”
Liz Reid, vice president, search, Google speaks during an event in New Delhi on December 19, 2022.
Sajjad Hussain | AFP | Getty Images
Testimony in Google‘s antitrust search remedies trial that wrapped hearings Friday shows how the company is calculating possible changes proposed by the Department of Justice.
Google head of search Liz Reid testified in court Tuesday that the company would need to divert between 1,000 and 2,000 employees, roughly 20% of Google’s search organization, to carry out some of the proposed remedies, a source with knowledge of the proceedings confirmed.
The testimony comes during the final days of the remedies trial, which will determine what penalties should be taken against Google after a judge last year ruled the company has held an illegal monopoly in its core market of internet search.
The DOJ, which filed the original antitrust suit and proposed remedies, asked the judge to force Google to share its data used for generating search results, such as click data. It also asked for the company to remove the use of “compelled syndication,” which refers to the practice of making certain deals with companies to ensure its search engine remains the default choice in browsers and smartphones.
Read more CNBC tech news
Google pays Apple billions of dollars per year to be the default search engine on iPhones. It’s lucrative for Apple and a valuable way for Google to get more search volume and users.
Apple’s SVP of Services Eddy Cue testified Wednesday that Apple chooses to feature Google because it’s “the best search engine.”
The DOJ also proposed the company divest its Chrome browser but that was not included in Reid’s initial calculation, the source confirmed.
Reid on Tuesday said Google’s proprietary “Knowledge Graph” database, which it uses to surface search results, contains more than 500 billion facts, according to the source, and that Google has invested more than $20 billion in engineering costs and content acquisition over more than a decade.
“People ask Google questions they wouldn’t ask anyone else,” she said, according to the source.
Reid echoed Google’s argument that sharing its data would create privacy risks, the source confirmed.
Closing arguments for the search remedies trial will take place May 29th and 30th, followed by the judge’s decision expected in August.
The company faces a separate remedies trial for its advertising tech business, which is scheduled to begin Sept. 22.