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Microsoft was apparently ready to “spend Sony out of business” according to an internal email (via The Verge) from Xbox Chief Matt Booty. The email from 2019 shows Booty discussing Xbox’s strategy for game content in the years ahead.
It’s popped up as part of the current case that Microsoft is having right now with the FTC over its attempted acquisition of Activision Blizzard. That case, which has been blocked by the UK’s Competition Markets Authority and approved in the EU, is currently undergoing scrutiny in the US. The propose $68.7 billion dollar deal would put some of gaming’s largest franchises under the Xbox umbrella. Which has garnered the acquisition plenty of attention from regulators.
The email is part of an ongoing thread of conversation which revolves around Xbox Game Pass. Microsoft’s subscription service for Xbox, PC, and mobile via cloud. As Game Pass has been a central focus of the FTC in this case. It’s also Microsoft’s central focus for its games strategy. As the company looks to be the premiere offering for cloud gaming.
Microsoft wanted to avoid Sony being the “Disney of games”
It’s not clear if Microsoft had actual intent to put Sony out of business in the gaming industry. But what does appear clear is that it wanted to avoid Sony being the “Disney of games” according to the email. Matt Booty states that Sony is really the only company that can compete with Game Pass. Noting that even though Sony can compete, Microsoft has a 2-year and 10 million subscriber lead.
Booty also references companies like Google which at the time, was still offering its now shuttered Stadia service. Additionally, Booty mentions Tencent and Amazon. Both of which have sizeable cash flow and a desire to compete with game offerings.
“If we think that video game content matters in 10 years, we might look back and says “totally would have been worth it to lose $2B or $3B to avoid a situation where Tencent, Google, Amazon, or even Sony have become the Disney of games and own the most valuable content,” the email reads.
Microsoft’s strategy is to really bolster Xbox Game Pass as much as possible. Which the email does a good job of showing. By beefing up the company’s game studios, it can toss top titles onto the service and make it an incredible value in gaming. the company’s Activision Blizzard deal is part of that strategy. Though Microsoft also wants the deal to go through so it ca bolster its mobile offerings.
Update:
Microsoft says the email was referencing trends in the gaming industry that it never pursued. The company also states that it’s unrelated to the acquisition as it predates the announcement to buy Activision Blizzard by 25 months.
