Google unveiled its new Stadia cloud gaming service yesterday, and Microsoft was watching closely. In an internal memo to the Xbox team, Microsoft’s head of gaming, Phil Spencer, responded to Google’s announcements by promising a big E3. “Google went big today and we have a couple of months until E3 when we will go big,” hints Spencer.

Thurrott has published the full memo, and it reveals that Spencer feels validated by Google’s efforts. “Their announcement is validation of the path we embarked on two years ago,” says Spencer. Microsoft is also creating its own cloud gaming service, dubbed xCloud, that will rival Google and many others for streaming games to phones, tablets, PCs, and TVs. Microsoft recently demonstrated xCloud publicly for the first time, and it’s promising trials of the service later this year.

“There were no big surprises in their announcement although I was impressed by their leveraging of YouTube, the use of Google Assistant and the new WiFi controller,” explains Spencer in his memo. Google is leveraging YouTube to allow people to view game clips and then instantly launch the game, or share an exact game save to the video service.

Spencer’s memo shows that the cloud gaming wars are truly about to heat up. Microsoft and Google are fierce competitors in a number of markets, including cloud services, productivity apps, laptops, and now gaming.

Here’s the memo in full: