Microsoft internal documents reportedly show it considered buying Sega, Bungie

Microsoft internal documents reportedly show it considered buying Sega, Bungie

Time Stamp: June 26, 2023 7:39 PM

As Microsoft’s court battle with US antitrust agency the FTC rumbles on, more and more juicy snippets of behind-closed-doors business doings are beginning to surface via released internal documents, and today’s minor revelation comes via the news that Microsoft reportedly gave serious consideration to buying Sega – and other companies including Bungie and IO Interactive – to help it accelerate Xbox Game Pass.

This little bit of what-might-have-been comes via internal Microsoft documents spotted by The Verge, beginning with an email from Xbox boss Phil Spencer to CEO Satya Nadella and Microsoft CFO Amy Hood, requesting strategy approval to approach Sega Sammy about a potential acquisition of its Sega games division.

Spencer suggested Sega’s “well-balanced portfolio of games across segments with global geographic appeal” would help Microsoft “accelerate Xbox Game Pass both on and off-console”, and that Sega’s “beloved IP” would be particularly effective in helping Games Pass reach new audiences in Asia, “where localised content is critical to success”.

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It’s unclear if Spencer’s strategic approval was ever granted, or if Microsoft ever got as far as a meeting regarding a potential Sega acquisition (or perhaps to ask if it could make Sonic Xbox green), but what the newly shared documents do show is that Sega, unsurprisingly, was not the only target in Microsoft’s sights.

The Verge also highlights a merger review “watchlist” from 2021 in which Microsoft, alongside its continuing interest in Sega, flagged the likes of Hitman developer IO Interactive, Pokémon Go creator Niantic, and Hades studio Supergiant Games for potential acquisition in a bid to plug various identified ‘gaps’ in its strategy.

Perhaps most notable, however, is the confirmation Microsoft was, at one time, eyeing up Destiny studio Bungie as part of a bid to fill a perceived gap in “engagement and social interaction” and “audience expansion”. Bungie, of course, was acquired by Sony in 2022 for very much the same reason, with Sony boss Jim Ryan at the time saying the purchase was “an important step in our strategy to expand the reach of PlayStation to a much wider audience.” Today’s news is a particularly fascinating reveal given Microsoft was reported to have held talks with Bungie about a buyout in 2020 – reports Bungie vehemently denied at the time.

Microsoft’s court battle with the FTC is set to continue into this week as the antitrust agency attempts to secure an injunction to block the company’s Activision Blizzard deal ahead of its own internal deliberations. So expect other intriguing morsals of news to continue tumbling out as proceedings continue.

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