Editor’s note: This article is part of the fifth and final day of FTC v. Microsoft (June 29, 2023).

Microsoft‘s Chief Financial Officer (CFO), Amy Hood, has submitted a written declaration as part of the ongoing legal proceedings surrounding Microsoft’s proposed acquisition of Activision Blizzard. While Hood will still face cross-examination from the Federal Trade Commission (FTC), her testimony provides valuable insights into Microsoft’s rationale and financial objectives behind the deal. In her declaration, Hood refutes speculations regarding Xbox‘s exclusive rights to Call of Duty and emphasizes the importance of enhancing Activision games’ availability. Furthermore, she highlights the company’s commitment to improving Xbox’s operating margin while ensuring immediate financial benefits for Microsoft shareholders.

Addressing a prominent concern in the gaming community, Hood clarifies that the possibility of making Call of Duty an exclusive title for Xbox was never considered by Microsoft. This notion was neither assessed nor discussed in her presence or during presentations to the Board of Directors. Hood firmly states that she comprehended the significance of keeping Call of Duty available on other platforms. Microsoft’s strategic rationale behind the proposed acquisition aims to increase the accessibility of Activision games, rather than restrict them to a single platform.

Hood acknowledges the historical disparity in operating margins between Xbox and Microsoft’s other lines of business. She recognizes the need to narrow this gap over time and bring Xbox’s operating margin closer to the levels observed in other company divisions. Microsoft’s long-term vision involves optimizing the financial performance of Xbox while continuing to invest in its growth. By strategically aligning Xbox’s operating margin with the rest of Microsoft’s business lines, the company aims to create a more balanced and sustainable ecosystem.

Hood emphasizes a crucial aspect of Microsoft’s financial analysis—the Activision Blizzard acquisition must yield immediate benefits for the company and its shareholders. The deal’s financial accretion in the first year is a key objective, requiring the acquisition to contribute to an increase in earnings per share from the outset. Microsoft’s commitment to delivering immediate returns demonstrates its rigorous evaluation process, ensuring that any acquisition aligns with the company’s financial goals and generates value for its stakeholders.