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[Thick Thighs Save Lives]

Microsoft was looking at acquiring both Bungie and Sega, according to internal documents from the FTC v. Microsoft hearing. In an email seen by The Verge, Xbox chief Phil Spencer wrote to both Microsoft CEO Satya Nadella and Microsoft CFO Amy Hood, requesting a strategy approval to approach Sega Sammy over a potential acquisition of its Sega gaming studios.

“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,” said Spencer in the November 2020 email.

Microsoft believed a Sega acquisition would drive Xbox Game Pass subscriptions across PC, console, and cloud. “The global appeal of Sega’s beloved IP will help expand Xbox Game Pass’s reach to new audiences around the world, most notably in Asia, where localized content is critical to success,” said Spencer in his pitch to Nadella and Hood at the time. Sega would also offer game transactions value for monetization opportunities in the future.

It’s not clear what happened with the Sega acquisition and whether Nadella ultimately approved talks. But in a Microsoft internal April 2021 merger review document, Sega was still listed as a key target. Microsoft had identified key areas for acquisitions in PC, mobile, and console across different markets, and Sega, Bungie, Zynga, and IO Interactive were part of a number of companies Microsoft was seriously looking at acquiring.

Bungie, a now Sony-owned studio, was on the list, with Microsoft’s internal document stating that the “acquisition of Bungie will include securing valuable IP, Destiny (and its community) and integration of its dev & live ops infrastructure into Xbox Game Studios.” Microsoft had identified a “high burn-rate” risk for Bungie, alongside NetEase’s $100 million minority stake investment in 2018. It also noted that Destiny was one of the “highest hours generating titles on console Game Pass.”

Hitman developer IO Interactive was also on the “final watchlist” in 2021, alongside mobile companies like Thunderful, Supergiant Games, Niantic, Playrix, and Zynga. Microsoft was in talks to acquire Zynga before it ultimately turned its attention toward Activision Blizzard for its mobile ambitions (Zynga was eventually acquired by Take-Two). It’s not clear if Microsoft held any talks with the other mobile-focused companies.

 

[Nothing1234]

PC and Mobile being before console is yikes. Wait its only APAC console, they really have given up on Europe console.

 

[Nankatsu]

Leave Sega alone Microsoft, ffs.

 

[DeepEnigma]

 

[a multicultural team of v]

Damn, it really was almost Wednesday.

 

[SEGAvangelist]

So SEGA can still happen. Nice.

 

[BennyBlanco]

Phil sent that email on a Tuesday btw.

 

[Deft Beck]

Not surprising at all. Microsoft couldn't get Nintendo, and Sony is their main competitor, so SEGA was really the next best thing.

I think they are much better off being third party. We need a strong third party base to help all platforms thrive. Too much consolidation is not good for competition.

I'm just surprised Capcom wasn't on the table. I think Sony may snap them up by the end of the generation.

 

[adamsapple]

Should have done Sega so all those years of memes could finally be realized.

 

[rodrigolfp]

At some point I don't doubt they considered to buy everyone.

 

[DeepEnigma]

At some point I don't doubt they considered to buy everyone.

Just a thought experiment™

 

[BennyBlanco]

I wonder what they are talking about with IO’s specialized expertise in regional game launches. I hope they’re not for sale after the square enix clusterfuck.

 

[ZoukGalaxy]

"Hey, guys, let's buy Sony and Nintendo just for experimenting"

*Cumbayá Phil activated*

 

[Nothing1234]

I wonder what they are talking about with IO’s specialized expertise in regional game launches. I hope they’re not for sale after the square enix clusterfuck.

Probably localisation for their games.

 

[ReBurn]

I hear it started on a Wednesday...

 

[Salty Popsicle]

I want Phil Spencer to buy me next.

 

[Varteras]

Would have been interesting to see how that played out. As I recall, Sega is one of multiple large Japanese game companies that have been protected for a few years now by investment laws that only allow 33% ownership by foreign entities. Some have suggested there are ways around that. I wonder if the fact that this never materialized was a result of such difficulties, if Sega just said no, or something changed their mind.

 

[GHG]

So SEGA can still happen. Nice.

You really want that final deathblow to Sega to happen huh?

 

[Banjo64]

Supergiant Games

Just fuck off M$.

Of course this email would drop on the day we find out that Perfect Dark is 5 years away. They couldn’t manage a McDonald’s order.

 

[Three]

Bungie and Sega to get into mobile obviously.

 

[legacy24]

it's Wednesday already?

 

[Bo_Hazem]

Did SEGA execs laugh for an hour?

 

[legacy24]

MS buying Bungie again

 

[graywolf323]

Supergiant Games

Just fuck off M$.

Of course this email would drop on the day we find out that Perfect Dark is 5 years away. They couldn’t manage a McDonald’s order.

why manage the studios they already have when they can just buy more to take games away from PlayStation?

 

[TheKratos]

Sony got bamboozled into buying Bungie. Well played Microsoft, well fucking played.

 

[Kdad]

Remember the musing that SEGA was next after AB was done and quieted down....

 

[ZoukGalaxy]

it's Wednesday already?

It's always Wednesday with Phil and Microsoft.

 

[Darsxx82]

It was almost Wednesday the whole time

It is becoming increasingly clear that MS had an acquisition plan for different studios and minor publishers and suddenly the possibility of acquiring ABK appeared, which solved everything in one fell swoop and stopped or postponed that entire plan.

It makes me think that if it fails to close the ABK acquisition, it is clear that MS is not going to sit and cry against the wall but rather try to acquire as much as it can and the regulators will allow.

 

[ChuckeRearmed]

ABK covers that all.

Sega still would be nice. But then it explains their strategic parternship - guess they decided to agree to that. I think Sega's ownership did not want to split their gaming division, but decided to ally with Microsoft. Thus we have those Day 1 launches, Game Pass deals and so on.

 

[Varteras]

Sony got bamboozled into buying Bungie. Well played Microsoft, well fucking played.

Yeah. Running off the creator of the franchise that put your box on the map, which you subsequently destroyed. Watching them create a very successful live service game. Then being bought by your competitor to help them be successful in those games, make more of them, and use the IP to expand their movies and shows push to make even more money off of it. Fucking chads.

 

[Thick Thighs Save Lives]

Did SEGA execs laugh for an hour?

 

[Calverz]

I can’t wait to see who they buy next.

 

[Bumblebeetuna]

Damn, Sega acquisition would have been tits.

 

[DrFigs]

I've seen this gif for like a decade now. am i really to believe it's a coincidence that the neogaf logo is in the background?

 

[FalsettoVibe]

It is becoming increasingly clear that MS had an acquisition plan for different studios and minor publishers and suddenly the possibility of acquiring ABK appeared, which solved everything in one fell swoop and stopped or postponed that entire plan.

It makes me think that if it fails to close the ABK acquisition, it is clear that MS is not going to sit and cry against the wall but rather try to acquire as much as it can and the regulators will allow.

Pretty much. I'm not a fan of this ABK deal but I think that this is MS's big fish. And any other major acquisitions won't happen for a while (if it goes through).

 

[Arumat]

Cause Japan would allow microsoft to aquire Sega... They'd shut that down faster than the FTC is with Activision, not only that... Sega is MUCH MUCH more than just games, with hotels, pachinko machines, arcades, toys, casinos, music and that list goes on... Sega Sammy wouldn't sell especially to xbox and or microsoft...

 

[Buggy Loop]

Sega's not worth much nowadays honestly..

 

[VAVA Mk2]

Damn, it really was almost Wednesday.

It was true!

 

[tmlDan]

FTC bout to use this as a "they wanna buy everything, MONOPOLY" card

 

[Methos#1975]

I think the chances of Japan letting Sega go to MS pretty much a nonexistent threat.

 

[Ar¢tos]

Would have been interesting to see how that played out. As I recall, Sega is one of multiple large Japanese game companies that have been protected for a few years now by investment laws that only allow 33% ownership by foreign entities. Some have suggested there are ways around that. I wonder if the fact that this never materialized was a result of such difficulties, if Sega just said no, or something changed their mind.

Yes Sega is protected in Japan, attempting to acquire more than 10% of it is navigating a burocratic maze with no exit.

 

[Darsxx82]

ABK covers that all.

Sega still would be nice. But then it explains their strategic parternship - guess they decided to agree to that. I think Sega's ownership did not want to split their gaming division, but decided to ally with Microsoft. Thus we have those Day 1 launches, Game Pass deals and so on.

Of course there is an agreement and a close relationship between MS-SEGA. That this agreement had to do with acquisition plans may now gain more force.

 

[Woopah]

Would have been interesting to see how that played out. As I recall, Sega is one of multiple large Japanese game companies that have been protected for a few years now by investment laws that only allow 33% ownership by foreign entities. Some have suggested there are ways around that. I wonder if the fact that this never materialized was a result of such difficulties, if Sega just said no, or something changed their mind.

I don't think it would have applied here. MS wouldn't have been buying Sega Sammy stock, just the Sega gaming studio's.

 

[Varteras]

I can’t wait to see who they buy next.

You see, this right here is why no one believes you and your buddies. Because ya say the ABK deal is good for consumers or that it's not a monopoly or whatnot. And then you say things like this. Making it more than clear that it is nothing of the sort. It's actual corporate cheerleading for an eventual monopoly.

I don't think it would have applied here. MS wouldn't have been buying Sega Sammy stock, just the Sega gaming studio's.

Sir, that is a great point that I never considered. Well done.

 

[PixelatedBeast]

Sony got bamboozled into buying Bungie. Well played Microsoft, well fucking played.

You obviously didnt read the part that says Destiny was one the the "highest hour generating" titles on gamepass for console.....How can you bamboozle a publisher into buying a company that generates some of the most hours played for a game on your subcription platform?

 

[BennyBlanco]

“We (Microsoft) are in a very unique position to be able to go spend Sony out of business,” said Booty, referencing spending $2 billion or $3 billion in 2020 to avoid competitors getting ahead in content at a later date.
“It is practically impossible for anyone to start a new video streaming service at scale at this point,” said Booty, referencing competitors like Google, Amazon, and Sony. Booty described content as a moat and that only Sony could really compete with Game Pass:

Wow

 

[StealthGoblin]

Yep - 90s Microsoft never left us. Trying to buy their way to success rather than build out their own operation.

 

[DrFigs]

Wow

chill... it's just a thought experiment bro

 

[ArtHands]

Sony got bamboozled into buying Bungie. Well played Microsoft, well fucking played.

Ironically Bungie is still multiplatform with their next game Marathon coming to Xbox too.

 

[OmegaSupreme]

Fuck it. Buy them all Ms.