Xbox Studios Head Said Microsoft Could ‘Spend Sony Out of Business’ in 2019 Email

Xbox Studios head Matt Booty said Microsoft could “spend Sony out of business” in a 2019 email uploaded as evidence in an ongoing antitrust trial in San Francisco.

In an email to Xbox’s chief financial officer Tim Stuart, Booty said, “We (Microsoft) are in a very unique position to be able to go spend Sony out of business.” 

Booty said that in ten years, the company would look back and say, it would have been worth spending $2 or $3 billion in 2020 to stay ahead of the competition. 

“Content is the one moat that we have,” Booty wrote in response to emails that were redacted from public view on a chain whose subject matter was GP ARPU, presumably standing for Game Pass Average Revenue Per Unit.

The email is a frank discussion of Xbox’s competition and business challenges. Booty took shots at Google and Amazon, saying that Google was 3 to 4 years off from having a game studio up and running, and that “Amazon has shown no ability to execute on game content.” Even streaming services were not left unscathed from Booty’s commentary, as he noted that Hulu and CBS All Access “will be trivial players in the space” due to their content lagging behind Disney’s offerings.

David Cuddy, a Microsoft spokesperson, responded to comment, “This email is three and a half years old and predates the announcement of our acquisition by 25 months. It refers to industry trends we never pursued and is unrelated to the acquisition.”

The FTC did not immediately respond to request for comment.

The email was dated Dec. 2019, just a year before Xbox would launch the next generation Xbox Series X and S and Sony would launch the PlayStation 5. When I reviewed the Xbox Series X for CNN in 2020, I noted that the Xbox lacked a blockbuster game to show off its next-gen capabilities, as Halo Infinite had been delayed to 2021. 

Booty’s email came in sharp contrast to Microsoft’s repeated refrain that Xbox Game Pass’ bargain deal to gamers and players’ flexibility of trying games on Windows made the Xbox ecosystem enticing in the console wars. As Microsoft Gaming CEO Phil Spencer said in court last week, the console wars are a “social construct” that Sony has already won. 

Lee Hepner, legal counsel at anti-monopoly advocacy group the American Economic Liberties Project, had previously said in an interview that Booty’s terminology was monopolistic. “They want to build a ‘moat’ around their console, which is antitrust slang for boxing out competitors. This is essentially the bulk of the FTC’s case in one email.”

The trial continues this week Tuesday through Thursday, with the judge set to make a decision in the next two weeks. The Microsoft Activision deal has a July 18 deadline. If the deal falls through, Microsoft may renegotiate with Activision. The deal is already blocked in the United Kingdom.

So far, analysts are divided on who seems to be winning the trial. Many note that Microsoft executives appear to be crushing their testimonies, but Hepner pointed out that Booty’s emails have strengthened the FTC’s argument.