Microsoft Internal Email Shows Plan To Outspend Sony In Xbox Business

During the ongoing FTC hearing, an internal email from Microsoft has been revealed, indicating that the company had plans to use its purchasing power and cash reserves to make Xbox more dominant by “spending Sony out of business.” This email is also part of a parallel lawsuit at the U.S. 9th Circuit Court.

According to The Verge, Xbox Game Studios head Matt Booty sent an email to Xbox CFO Tim Stuart in 2019 suggesting spending on acquiring game studios so Xbox could better compete with rival PlayStation for subscriptions.

“We (Microsoft) are in a very unique position to wear Sony out of business,” Booty said in an email. He went on to point out that a decade from now it would seem justified to spend $2-3 billion. And it would prevent companies like Google, Tencent and even Sony from becoming the “Disney of games” and getting all the “valuable content”.

Speaking to The Verge, Microsoft GM of Public Affairs David Cuddy said, “This email is three and a half years old and it’s 25 months before our acquisition announcement,” and “It refers to industry trends that we never followed and is unrelated to the acquisition.”

This email gives us an idea of how Microsoft may have been thinking about its content strategy in 2019. Since then, the tech giant has bought Bethesda for $7.5 billion, and of course, if the $69 billion acquisition of Activision Blizzard goes through, Xbox’s Game Studios umbrella will only get bigger.

During the FTC vs Microsoft proceedings, it was also revealed that Microsoft was considering buying Sega and Bungie (now bought by PlayStation). In 2020, Phil Spencer wrote to Microsoft CEO Satya Nadella asking for permission to approach Sega for a future acquisition. In the email, Spencer notes that buying Sega could accelerate the growth of Xbox Game Pass “both on and off the console” and that Sega’s game lineup has “global geographic appeal.”