We Are in a Position to Go Out of Business Sony
Phil Spencer / Microsoft Counsel — CEO of Microsoft Gaming / Litigation Counsel, FTC v. Microsoft preliminary injunction trial
“Our goal in acquiring gaming studios is to bring more games to more people on more devices, not to pull games from competitor platforms or disadvantage PlayStation gamers.”
Matt Booty — Head of Xbox Game Studios, Microsoft, Internal email to Xbox CFO Tim Stuart
“We (Microsoft) are in a very unique position to be able to go out of business Sony... It is practically impossible for anyone to start a new video streaming service at scale at this point... spending $2B or $3B in 2020 to avoid a situation where Tencent, Google, Amazon, or Sony become the Disney of games is well worth it.”
The Split:In court and press statements, Microsoft pitched horizontal gaming acquisitions as benign multi-platform democratization. Internally, studio leadership frankly strategized leveraging Microsoft's enterprise balance sheet to operate at multi-billion dollar sustained losses to force Sony out of business.
When a firm with a $3 trillion enterprise balance sheet talks to courts, it speaks the language of consumer access. When its executives talk to finance, they count how many billions in losses are required to starve a capital-constrained competitor.