Microsoft over the past three years looked into potentially acquiring numerous gaming companies, including Sega, Bungie, and Niantic, internal documents have revealed. Microsoft hoped such acquisitions would bolster Game Pass and further expand the tech-giant’s gaming audience.
Documents included as part of Microsoft’s ongoing hearing with the Federal Trade Commission over its acquisition of Activision Blizzard (via The Verge) shine a light on all the companies Microsoft had looked to potentially acquire in recent years. One of the biggest was Sega, most well-known for Sonic the Hedgehog. In a November 2020 email, Microsoft gaming head Phil Spencer asked for a “strategy approval” from Microsoft CEO Satya Nadella and Microsoft CFO Amy Hood to approach Sega about a potential acquisition.
“We believe that Sega has built a well-balanced portfolio of games across segments with global geographic appeal, and will help us accelerate Xbox Game Pass both on and off-console,” Spencer said in the email. He noted that as Sega is a publicly-traded Japanese company, there would be “deal complexities.” It’s unclear if Nadella approved Spencer’s request or how far any potential talks between Microsoft and Sega went.
But Sega was hardly the only company Microsoft had its eyes on for a potential acquisition. An internal company document from 2021 listed numerous other companies, including Destiny-developer Bungie (which was acquired by Sony in 2022), Pokemon GO-developer Niantic, mobile game giant Zynga (which was acquired by Take-Two in 2022), Hades-developer Supergiant Games, and Hitman-creator IO Interactive.
All of the above companies were listed as acquisitions that would meet the company’s goal of “audience expansion,” while a select few, like Bungie and IO Interactive, would also bring “engagement and social interaction” to the table. Microsoft noted that Destiny was one of the most-played games on Game Pass in terms of hours invested by players, and that acquiring the studio would see Microsoft secure not only its valuable IP and passionate community, but also the ability to integrate the studio’s live ops infrastructure into the rest of Xbox Game Studios.
Microsoft has cited mobile game company King, which is part of Activision Blizzard, as one of the key reasons behind the still pending $69 billion acquisition. These documents show that Microsoft has had its eye on various mobile game companies for several years, though it’s unknown if any serious discussions were had between Microsoft and other mobile game companies.
News that Microsoft was potentially thinking about acquiring Sega is just the latest revelation to come out of the ongoing FTC hearing. Spencer as part of the hearing said Microsoft acquired ZeniMax and Bethesda Game Studios in part to prevent Starfield from becoming a PlayStation exclusive, as well as that The Elder Scrolls VI is at least five years away.
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