Microsoft Corp.'s (NASDAQ: MSFT) immediate response internally to Sony's (NYSE: SONY) PlayStation price hike was not one of announcing a similar Xbox price hike - in fact, Microsoft executives considered it an opportunity to win fans instead of losing by being a follower.
What Happened: The ongoing FTC vs Microsoft case has unearthed new internal communication at Microsoft, revealing that while the Windows maker was expecting a PlayStation price hike, its plans to counter were simply not to announce a similar Xbox price hike.
Ami Silverman, the head of Microsoft's consumer sales and marketing, said, "we know this could be our time to win fans vs lose being a follower", according to internal emails seen by The Verge.
Back in August 2022, Sony announced a price hike across several key markets. The company blamed it on the "global economic environment, including high inflation rates."
However, Microsoft decided not to hike Xbox prices because the company's gaming console lagged behind PlayStation in sales.
In fact, Microsoft explicitly admitted to this prior to the FTC hearing. "Xbox has lost the console wars, and its rivals are positioned to continue to dominate, including by leveraging exclusive content," said Microsoft.
Behind In Performance: Xbox lagged behind the PlayStation 5 in terms of sales and performance.
Microsoft's internal discussions revealed several key parameters like SSD performance, optimizations for developers in terms of higher throughput, and more.
Silverman agreed with Phil Spencer, Microsoft's head of games, that they need to keep Xbox gamer-focused. However, the reasoning suggested a wider mood across the company that the PlayStation was at a clear advantage.
"All good points, let's be gamer obsessed here as we have not gotten out of the woods," Silverman said.