In a 2019 email, that has been uploaded as evidence in the ongoing legal battle between the FTC and Microsoft for a Preliminary Injunction (PI) against the Activision Blizzard transaction, it has been revealed that Xbox Game Studios head, Matt Booty said Xbox can “spend Sony out of business.”

The email from 2019 is addressed to Microsoft Gaming CFO Tim Stuart, where Booty suggests that spending $2 to $3 Billion dollars now will be beneficial to them in the long run.

Find the full email below:

Thanks for sharing.
A lot to digest here. Will read it in detail.

A different view to the general view below might be that 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 that we have, in terms of a catalog that runs on current devices and capability to create new. Sony is really the only other plaver 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.

The email suggests that the only main competition they have of Game Pass is possibly an alternative by PlayStation (which wasn’t announced at the time, but is live now), where they would still have a 2 year lead with 10 million more subscribers.

However, the email has been deemed irrelevant to the Microsoft Activision merger by a Microsoft spokesperson who says that the “email is three and a half years old and predates the announcement of our acquisition by 25 months.” He adds that “It refers to industry trends we never pursued,” and that is largely “unrelated” to the acquisition in question.

The hearing for the PI will resume later today, and continue until Friday. Expect more updates as they are out.

Source: FTC v Microsoft Evidence Files