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Xbox Game Pass Head Wanted To “Spend Sony Out Of Business”

Since global regulators started looking into Microsoft’s proposed acquisition of Activision Blizzard, the Xbox company has been trying to paint itself as in “third place” or the underdog of the games industry behind Sony and Nintendo.

The biggest issue with that however, is that though Xbox might technically be third behind Nintendo and PlayStation, it’s backed by the gargantuan-sized Microsoft, a company worth trillions, and all the spending power that comes with.

According to an internal email from the head of Xbox Game Pass, Matt Booty reveals that Booty wanted to tap into that spending power, and use it to essentially run Sony out of business.

Specifically, he said “spend Sony out of business.”

Booty’s email comes as part of a longer chain which we haven’t seen, but it looks to be part of a larger conversation as to how Xbox could grow its business and strategically move up the ladder, which could’ve potentially included Xbox not releasing its games into its Game Pass service.

It’s within this larger conversation that Booty points out one of Xbox’s biggest strengths, and how Sony, more than anyone, is Xbox’s biggest competition now and in the future.

“We (Microsoft) are in a very unique position to be able to go spend Sony out of business. If we think that video game content matters in 10 years, we might look back and say ‘Totally would have been worth it to lose $2B or $3B in 2020 to avoid a situation where Tencent, Google, Amazon or even Sony have become the Disney of games and own most of the valuable content’.

For example, it is practically impossible for anyone to start a new video streaming service at scale at this point. What content do you base it on? Things like Hulu and CBS All Access will be trivial players in the space. In games, Google is 3 to 4 years away from being able to have a studio up and running.

Amazon has shown no ability to execute on game content. Content is the one moat we have, in terms of a catalog that runs on current devices and capability to create new. Sony is really the only other player who could compete with Game Pass and we have a 2 year and 10M subs lead.

If we reverse course on day and date, it’s going to be hard to convince folks that things like Mixer or Xcloud have much of a chance of surviving scrutiny either.”

This appears to be the same email that a parallel lawsuit from a group of gamers believed to be “uncontroverted evidence” that Microsoft’s attempted acquisition of Activision Blizzard is meant to drive Sony out of the games industry.

When this email appeared in court, Microsoft argued that it isn’t relevant because it comes from 2019, and outlines a strategy that the company ultimately didn’t pursue.

Though this email also pre-dates Microsoft’s acquisition of ZeniMax and its proposed acquisition of Activision Blizzard, both of which are far more than the 2-3 billion proposed by Booty.

Source – [The Verge]