Microsoft’s Xbox Game Studios chief, Matt Booty, was actively urging Xbox CFO Tim Stuart to invest a substantial amount of money in acquiring game content in 2019. The goal was to position Microsoft to compete against Sony in the realm of subscriptions. This revelation was made through an email thread that is included in the ongoing FTC v. Microsoft hearing.
According to Booty, Microsoft had a unique opportunity to outspend Sony and potentially drive them out of business. The suggestion was to spend $2 billion or even $3 billion in 2020, in order to ensure that competitors wouldn’t surpass Microsoft in terms of content in the future.
Booty also argued that it would be extremely difficult for any new player to enter the video streaming service market at this point. He cited companies like Google, Amazon, and Sony as competitors, but believed that Microsoft’s content catalog provided a significant advantage. He specifically mentioned that only Sony could truly compete with Game Pass, and added that Microsoft had a considerable lead of 2 years and 10 million subscribers.
The email thread focused on Xbox Game Pass, with the rest of the conversation redacted. However, it suggested that Microsoft was contemplating changing its approach to day and date releases of its own games on Xbox Game Pass. Booty expressed his dissatisfaction with the idea, stating that reversing this decision would make it difficult to convince people that other Microsoft initiatives, such as Mixer or xCloud, had a strong chance of survival.
Related Post
This email from Booty offers a glimpse into Microsoft’s strategy and thinking when it comes to game content for Xbox Game Pass. Since 2019, Microsoft has made significant moves to bolster its offerings, including the acquisition of Bethesda for $7.5 billion. The company is also in the process of finalizing a proposed $68.7 billion deal with Activision Blizzard. These figures far surpass the $2-3 billion mentioned by Booty in 2019, indicating the extent to which Microsoft is willing to invest in securing top-tier game content.
In addition to Bethesda and the proposed Activision Blizzard deal, Microsoft seriously considered acquiring other major players in the gaming industry, such as Sega and Bungie. Xbox chief Phil Spencer even sought approval from Microsoft CEO Satya Nadella to approach Sega Sammy regarding a potential acquisition of its Sega gaming studios. Both Sega and Bungie were part of a larger watchlist of key studios and mobile developers that Microsoft had compiled with the aim of fortifying Xbox Game Pass.
Microsoft’s aggressive approach to securing game content highlights the company’s determination to position itself as a dominant force in the gaming industry. By investing heavily in acquisitions and bolstering its offerings through Xbox Game Pass, Microsoft aims to solidify its position and compete effectively against established players like Sony.
