For about half a decade, the two major companies in the gaming industry have been portraying themselves publicly as courteous and sportsmanlike entities. They have been exchanging congratulations for achievements and giving each other pats on the back on social media.
If Sony released a great PlayStation exclusive, the Xbox team would congratulate them on Twitter. And if it was Microsoft who released a great exclusive, Sony would do the same. But… are they really friendly companies? Far from it.
This is a business, and as such, companies want to make as much money as possible. If they have to step on the competition, they will. The goal is to fill their coffers and secure their positions. The lawsuit over Microsoft’s acquisition of Activision-Blizzard has exposed their true intentions.
Buying studios to choke Sony
Xbox Game Studios’ head at Microsoft, Matt Booty, was encouraging Xbox’s Chief Financial Officer, Tim Stuart, to spend a significant amount of money on game acquisitions in 2019 to prepare the company for a battle against Sony in subscription services.
The revelation comes from an email thread that is part of the FTC hearing against Microsoft.
“We (Microsoft) are in a unique position to spend Sony out of the business,” Booty said in a December 2019 email, referring to spending up to $3 billion in 2020 to prevent competitors from gaining an advantage in content acquisition.
Game Pass as a strategy to kill Sony: content is king
“It’s virtually impossible for anyone to start a new video streaming service at scale right now,” Booty said, referring to competitors like Google, Amazon, and Sony. Booty described content as a moat and stated that only Sony could truly compete with Xbox Game Pass.
“In gaming, Google is at least three to four years away from having a functioning studio. Amazon has not demonstrated the ability to execute game content. Content is the only card we have, in terms of a catalog that works on current devices and the ability to create new ones. Sony is the only one that could compete with Game Pass, and we have a two-year and 10 million subscriber advantage,” Booty added.
Microsoft argues that the email is old and that they never pursued such a strategy anyway. “This email is three and a half years old and is 25 months prior to the announcement of our acquisition of Activision-Blizzard,” said David Cuddy, General Manager of Public Affairs at Microsoft, in a statement sent to The Verge.
The email is part of a thread discussing the Xbox Game Pass business. Thanks to these emails, we know that Microsoft was considering reversing the idea of day-one releases on Game Pass in 2019, which Booty was not fond of.
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