Redacted: PlayStation 5 Reveal (Premium)

Microsoft’s reaction to the Sony PlayStation 5 reveal in early 2020 is among the many fascinating aspects of the recent blockbuster Xbox leak.

To put this in context, Sony announced in October 2019 that it would launch its next-generation PlayStation 5 video game console in time for the holiday 2020 selling season. Then, the following March, the firm fully revealed the technical specifications of the PS5. Our observations at the time were that the Xbox Series X would feature nearly identical specifications, though the PS5 would allegedly have much higher I/O throughput. And we noted that the PS5 would support standard M.2 SSD for storage expansion, a feature missing from the Xbox consoles (which require expensive proprietary storage expansion cartridges).

Microsoft, meanwhile, announced the Xbox Series X in December 2019, and it revealed the console’s specifications in March 2020, two days before Sony’s PS5 reveal. It then addressed Sony’s throughput advantage in July 2020 when it revealed its DirectStorage technology. This, Microsoft said, would improve the Xbox Series X’s X 2.4 GBps of raw I/O throughput by 2.5X, for an effective I/O throughput of 6 GBps. The PS5, meanwhile features PS5 5.5GBbs of raw throughput and 8 to 9 GBps of compressed throughput. Microsoft message? The I/O throughput would, in fact, be comparable.

With all this in mind, consider the conversation in the internal email exchange quoted below. It includes Microsoft CEO Satya Nadella, Xbox chief Phil Spencer, and others, and it details Microsoft’s reaction to Sony’s May 2020 reveal.

“I know I shouldn't but I can't help myself,” Mr. Spencer writes. “We've all lived with 7 years of starting off a generation with a price and performance (and messaging) disadvantage to PS4 with Xbox One. I have to admit this morning when I woke up knowing the PS5 reveal was today that the stress level was higher than normal. Now after almost 12 hours of soaking in their unveil, taking apart their specs, and looking at the community responses, I just wanted to say that I'm proud of our team.”

Given the history that has occurred since then, this bit is particularly incredible.

“We have a better product than Sony does, not just on hardware but equally important on the software platform and services on top of the hardware. We have the ingredients of a winning plan. I felt the feedback from the BoD [board of directors]’s discussion on being too confident and maybe this will just reinforce that perception. I get the need to be humbly confident but today was a good day for us.

“We haven't won anything,” he continues. “And I know we have hard discussions about pricing, P&L [profit and loss], investments, etc. This mail isn't trying to scoop any of that, those discussions really matter. But we can take confidence in our product truth here and I do believe any conversation needs to start with believing in that. This was a good day for Xbox. Th...