Microsoft thought about buying Sega to expand Xbox Game Pass

The hearings between Microsoft and the U.S. Federal Trade Commission (FTC) on the purchase of Activision Blizzard are revealing behind-the-scenes information from the gaming market. The latest is that the Xbox maker has considered buying Sega and other studios to increase the offering of games on Xbox Game Pass.

The plan appears in an email sent by Phil Spencer, head of the Xbox division, to Satya Nadella and Amy Hood, CEO and CFO of Microsoft, respectively.

In the message, written in November 2020, Spencer asks for an approval for the strategy of approaching Sega Sammy and making an offer for the Sega game studio.

“We believe Sega has built a balanced portfolio of games across multiple segments with global geographic appeal, and this will help us accelerate Xbox Game Pass, both on and off consoles,” the Xbox division head said.

Spencer considered that Sega’s “beloved intellectual properties” would help expand Xbox Game Pass and reach new audiences, particularly in Asia. The studio would also bring monetization opportunities in the future, with transactions in games.

Bungie and Zynga also caught Microsoft’s attention
Documents from April 2021 show that Microsoft has also kept an eye on Bungie (Destiny), Zynga (Farmville), IO Interactive (Hitman), and Niantic (Pokémon GO), among others.

Sega was no longer in that relationship. It’s unclear what was the reason that made Microsoft give up.

Bungie is a curious case. She was touted as the holder of valuable intellectual property in addition to Destiny and her community. Microsoft still noted that Destiny was one of the titles with the most hours played on Game Pass.

Bungie was owned by Microsoft between 2000 and 2007, during which time Halo was successful as an Xbox exclusive. In 2022, after 15 years independently, it was bought by Sony, a major rival of the Redmond company.

Of all those mentioned, Zynga came closest to being bought by Microsoft. The companies even negotiated, but the Xbox company preferred to invest in Activision Blizzard. Zynga was bought by Take-Two, developer of the GTA series.

It is not known whether Microsoft has ever negotiated with other companies focusing on mobile devices. Even so, in the hearings so far, Phil Spencer ensures that Microsoft gives the console market for lost and wants to grow in games for smartphones.