After the official announcement of the PlayStation 5 in March 2020, an email was sent by Microsoft Gaming CEO Phil Spencer to his superiors, including Microsoft CEO Satya Nadella and CFO Amy Hood. In the email, Spencer expressed that the PS5 reveal did not cause him as much anxiety as he had anticipated. He firmly believed that the Xbox Series X|S was in a superior position to succeed compared to the PS5.
On the same day that Sony officially announced the PS5, Spencer sent the email, which has recently come to light as part of the extensive Xbox leaks from the FTC trial. In the email, Spencer confidently stated, “We possess a superior product compared to Sony.” He emphasized that this superiority extended not only to the hardware but also to the software platform and services provided on top of it. According to Spencer, they had all the necessary ingredients for a winning strategy.
Spencer admitted that his stress levels were initially high on the morning of the PS5 reveal event. However, after thoroughly reviewing the PS5 reveal, examining the specifications, and considering the community response, he became confident that Xbox had a better strategy.
Despite his confidence, Spencer acknowledged in the email that Microsoft had not yet achieved victory. He mentioned an upcoming “hard discussion” regarding pricing and other factors related to the Xbox Series X|S consoles. Nevertheless, he concluded his message by stating, “This was a good day for Xbox.”
The email also hinted at a meeting with the Microsoft Board of Directors that may not have gone as smoothly as Spencer had hoped. He mentioned feeling the feedback from the meeting, where he was perceived as “overly confident.” Although he recognized that this email to Nadella and Hood might reinforce that perception, he proceeded with his “humbly confident” email because he realized that the PS5 reveal did not cause the stress he had anticipated.
Earlier in the email, Spencer discussed how the Xbox One had failed to match the success of the PS4. However, he expressed optimism that things could change with this new generation. He acknowledged that Xbox had started previous generations at a disadvantage in terms of price, performance, and messaging compared to the PS4.
In terms of sales, Spencer did not ultimately achieve his desired outcome, as the PS5 and Nintendo Switch emerged as clear market leaders. Both systems consistently outsell Xbox in the US and likely worldwide. However, Xbox Game Pass remains Microsoft’s ace, representing a significant shift and point of differentiation between Xbox and Sony. Nevertheless, PlayStation continues to generate billions more in revenue from games, hardware, and services compared to Xbox.
The Xbox leaks also provided new insights into Microsoft’s long-term next-gen Xbox plans, a mid-gen refresh for the Series X|S, and a roadmap of future Bethesda games. Additionally, a leaked document revealed the development of a new Xbox controller featuring haptic feedback.
How did this leak occur in the first place? According to the FTC, Microsoft inadvertently sent a link containing this information to the FTC, which was then uploaded by the Court. Although Microsoft later requested the removal of the documents, the internet never forgets.