Microsoft bragged it could ‘spend Sony out of business’ ahead of $69bn takeover row

Matthew Field
Tue, 27 June 2023 

Xbox Games Studios boss Matt Booty said Sony was the only company that could compete with Microsoft on game streaming products - Patrick T. Fallon/Bloomberg

A senior Microsoft executive claimed the US tech giant could “spend Sony out of business” in the battle for control of the video games market, according to newly released emails.

Microsoft, which designs the Xbox console, is fighting both British competition regulators and the US Federal Trade Commission which have sought to block its $69bn (£54bn) takeover of Call of Duty-maker Activision.

The FTC has been in court to attempt to stop the deal over fears it will hurt competition in the video games market.

Newly released emails revealed as part of the case showed that Microsoft executives had previously discussed ways to gain an upper hand over rival Sony. Matt Booty, the tech giant’s head of Xbox Games Studios, in 2019 had urged finance chief Tim Stuart to unleash billions of dollars in spending to put pressure on Sony’s position.

Mr Booty said: “We (Microsoft) are in a very unique position to be able to go spend Sony out of business.” The comments were made two years before Microsoft launched a bid to acquire Activision.

Sony, the Japanese tech company, has insisted the Microsoft takeover would result in it being barred from the lucrative Call of Duty action franchise. Microsoft has argued it would have no incentive to make the game exclusive to the Xbox.

Mr Booty said: “In 10 years, we might look back and say, ‘Totally would have been worth it to lose $2bn to $3bn in 2020 to avoid a situation where Tencent, Google, Amazon or even Sony have become the Disney of games and own the most valuable content.”

He added that “Sony is really the only other player who could compete” with Microsoft’s game streaming products.

A Microsoft spokesman told The Verge website: “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.”

Activision has been hugely critical of the CMA’s decision to block the deal, claiming it shows that Britain is “closed for business”.

Activision’s chief executive, Bobby Kotick, has accused the CMA of being a “tool” of the FTC. The CMA has denied these claims.

Further documents disclosed as part of the US court battle show Microsoft also looked to buy games maker Bungie, which developed several games for the popular Destiny games franchise, and Sega.

Bungie was later bought by Sony in 2022 for $3.6bn.