**MICROSOFT’S XBOX GAME STUDIOS CHIEF CONTemplates Big Spending on Game Content to Compete with Sony**
In an email thread revealed during the FTC v. Microsoft hearing, it was disclosed that Matt Booty, the head of Xbox Game Studios at Microsoft, was encouraging Xbox CFO Tim Stuart to make significant investments in game content in 2019. The purpose behind this proposed spending spree was to position Microsoft against Sony in the battle for subscriptions. Booty expressed the belief that Microsoft was uniquely placed to challenge Sony and even suggested spending $2 to $3 billion in 2020 to ensure that competitors wouldn’t surpass their content offerings in the future.
Booty also highlighted that other major companies like Google, Amazon, and Sony would find it practically impossible to launch a new video streaming service on the same scale. He viewed content as a crucial asset, describing it as a protective barrier or “moat” that only Sony could truly compete with, particularly in relation to Xbox Game Pass. Moreover, he argued that Google was still several years away from establishing a game studio, while Amazon had not demonstrated proficiency in game content development.
While Microsoft has dismissed the email as old and irrelevant to the current strategy, Booty’s message provides insights into the company’s approach to Xbox Game Pass and its value proposition. The email indicates that Microsoft was possibly considering the reversal of day and date releases of its own games on Xbox Game Pass in 2019. This was a move that Booty appeared to be reluctant about due to concerns about the credibility of other Microsoft ventures such as Mixer and xCloud.
The email from Booty serves as evidence of Microsoft’s strategic considerations regarding game content for Xbox Game Pass in 2019. Since then, Microsoft has made significant acquisitions, such as Bethesda for $7.5 billion, and is currently in the process of finalizing the proposed $68.7 billion deal with Activision Blizzard. These investment figures far surpass the $2 to $3 billion estimated by Booty in his email.
Additionally, Microsoft seriously evaluated the potential acquisitions of Sega and Bungie, with Xbox chief Phil Spencer seeking approval from Microsoft CEO Satya Nadella to approach Sega Sammy. These efforts were part of a larger plan by Microsoft to acquire key studios and mobile developers to strengthen Xbox Game Pass.
In conclusion, Microsoft’s email thread provides valuable insights into the company’s thinking and strategy surrounding game content for Xbox Game Pass in 2019. It showcases Microsoft’s ambition to establish a strong foothold in the gaming industry and compete with Sony’s dominant position. While the email is now considered outdated and irrelevant to Microsoft’s current approach, it sheds light on the company’s previous considerations and reveals a glimpse into the inner workings of the gaming industry.