It must be the worst nightmare of many large companies: due to an incorrectly uploaded file, the entire business operation suddenly falls to the wayside. At Microsoft, this nightmare came true on Tuesday. Due to a data breach, sensitive information about the Xbox was accidentally released. A leak of this magnitude does not happen often in the gaming world, where cybersecurity is taken very seriously due to cutthroat competition.
The leak is a serious embarrassment to Microsoft. The documents paint a picture of the plans that the American tech company has in the coming years with the Xbox, the game console that is the flagship of the gaming division.
Last week something went wrong when providing information to a judge in the United States. The American market watchdog FTC wants to prevent Microsoft from acquiring games producer Activision Blizzard through the courts and thus potentially gaining too much influence on the entertainment market
This summer, Microsoft came out on top, meaning that the billion-dollar takeover of 68.7 billion dollars (64.3 billion euros) appears to still go ahead.
However, Microsoft had to provide more information to the court in California to settle the case. Microsoft complied with the request and provided a number of documents, after which the court placed the information on a publicly accessible server on Friday.
It turned out that Microsoft accidentally shared around a hundred documents that contained highly competitively sensitive information and were not intended for the general public. When American media discovered its existence on Tuesday morning (local time), the server was immediately disabled – but the damage had already been done.
New Xbox
Among the sensitive documents were internal emails from Microsoft executives, product images, technical details and planned launch dates for new games and Xbox hardware.
It became clear that Microsoft plans to launch a new design of the Xbox Series X next year. The attached photos show what the game console and controllers may look like. The current angular design would be replaced by a black, cylindrical console. In 2028, Microsoft wants to launch the next generation of Xbox, which has a far-reaching link with Microsoft’s cloud services.
Although the leak did not provide many revolutionary insights for experts (almost no one expected that a CD reader would be included in the next design of the Xbox), it is a painful event for Microsoft.
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In an initial response via X, formerly Twitter, CEO Spencer said he regretted that the information had been leaked in this way. “So much has changed and there is so much to be excited about right now, and in the future.”
Court case
The information leak is unlikely to have any consequences for the outcome of the American lawsuit. Lawyers assume that the FTC can no longer win and that the billion-dollar merger between Microsoft and Activision Blizzard will still happen this fall.
What could still jeopardize the takeover is a lawsuit in the United Kingdom. The British competition authority CMA believes that the acquisition gives Microsoft too much power over cloud services in the gaming world, and wants to force the tech giant through a lawsuit to partially divest its cloud services.
The documents indeed show that the tech giant wants to connect the Xbox to its own cloud service to an advanced extent. The omission of a CD reader in the new game consoles is one of the clear signs of this – after all, the games have to be downloaded.
Nintendo takeover
Interestingly, Microsoft’s main competitors Nintendo and Sony, the companies behind the Switch and the Playstation respectively, also appear in the documents. This includes the exclusion of the famous game series Elder Scrolls of the Playstation.
What also comes back is a possible takeover of competitor Nintendo. In a 2020 email conversation, Microsoft CEO Phil Spencer mused about what it would be like if Microsoft acquired the Japanese gaming giant. “Nintendo is THE big takeover target for us in gaming,” he said quotes The Verge the CEO from the leaked documents. Spencer calls a Nintendo takeover “a career [bepalend] moment” and writes that he sincerely believes that it “would be a good step for both companies.”
The emails were written at a time when Microsoft was on an aggressive takeover path. In the summer of 2020, for example, it attempted to acquire the American activities of video platform TikTok. Not long after Spencer’s email was sent, Microsoft struck with the purchase of software publisher ZeniMax Media for $7.5 billion, bringing in leading game maker Bethesda.
The question asked in the emails: shouldn’t Microsoft look more seriously at takeover candidates such as Nintendo? The main problem: Nintendo is sitting on a “big pile of cash” which makes it absolutely not a viable takeover target.
Around the turn of the century, shortly after the presentation of the Xbox, Microsoft approached Nintendo. How little the Japanese saw in a future under Microsoft became clear during the meeting. “They laughed their asses off for an hour,” thus one of the Microsoft directors present told Bloomberg news agency.
The fact that Microsoft still dreamed about a takeover of Nintendo until recently is met with a certain disbelief in the gaming world. The question remains how seriously the emails should be taken; the subject of the emails translates as “random thought”.