The Federal Trade Commission has taken interest in the 10-year licensing deals that Microsoft signed with Nintendo to bring Call of Duty to the Switch, but Nintendo may not have to provide specific details.
Nintendo is fast becoming more involved with the FTC's antitrust lawsuit against the Microsoft-Activision merger. A bit ago we reported that Nintendo has asked an FTC law judge to toss out a subpoena summoning a very particular Nintendo of America executive to deliver sworn testimony before the FTC's team of lawyers.
Now we have a better idea on the FTC's overall aim with this subpoena. Closer investigation of the motion to quash the subpoena indicates that the Federal Trade Commission wants more information on the 10-year Call of Duty licensing deal that Microsoft and Nintendo have signed, however there isn't much detail on the scope of these interests.
The FTC has subpoenaed Steve Singer, Nintendo of America's vice president of publisher and developer relations, to deliver up to 7 hours of testimony to the FTC's Complaint Counsel. Singer was the Nintendo executive who negotiated with Microsoft to iron out the 10-year Call of Duty licensing deal, which began all the way back in December 6, 2022 when the two companies signed a letter of intent regarding the deal.
According to the filing, the FTC followed a specific process with this particular subpoena.
Nintendo of America legal counsel alleges that the FTC did not order the subpoena until it learned that Singer was the Nintendo exec responsible for the negotiations with Microsoft. The FTC asked for the identity of Nintendo's negotiator on March 16, and then served the subpoena on March 29-30. Both the identity request and the subpoena's serving were made after the case's subpoena deadline of March 3.
Note: The following is speculation.
Based on the way that the FTC handled this particular subpoena, we could deduce that the agency wants to gather more information on these deals, perhaps not just in written and documented form, but also as part of a live testimony that puts Singer in the spotlight.
It's unclear on exactly what the FTC is fishing for and how Nintendo's information on the licensing deal could affect the case.
However, it's worth mentioning that Sony Interactive Entertainment has been opposed to these deals, especially the one that Microsoft has offered Sony. It's possible the FTC is trying to glean more information on the deals as they relate to Sony's complaints.
What's most interesting about these proceedings is that the FTC has essentially removed Nintendo from the relevant market that it has created for this merger case. Remember that the FTC is responsible for the so-called "High-Performance Console Relevant Market," which essentially removes Nintendo from the Big 3. The FTC argues that Nintendo is not included in this market because of the myriad of differences between Microsoft, Sony, and Nintendo, and that Nintendo does not have a high-powered console that matches the Xbox Series X/S and PlayStation 5 systems.
While this designation makes sense of a technical level--Microsoft competes much more closely to Sony than either one compete with Nintendo--this new relevant market has already caused confusion in Congress and the Senate Finance Committee.
In any case, it's also possible the FTC's law judge grants the Nintendo executive's request to quash the subpoena, and that Singer will not have to testify in front of the FTC's Complaint Counsel.