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Microsoft Explored Acquiring Sega, Bungie, Niantic to Strengthen Xbox Game Pass and Mobile Portfolio: Report

The internal emails revealed that Microsoft Gaming CEO Phil Spencer requested strategy approval to approach Sega for acquisition.

Microsoft Explored Acquiring Sega, Bungie, Niantic to Strengthen Xbox Game Pass and Mobile Portfolio: Report

Photo Credit: Ryu Ga Gotoku Studio

SEGA is also known for publishing the Yakuza series of games

  • Bungie, the creator of Destiny, was acquired by Sony PlayStation in 2022
  • Destiny has recorded the ‘highest hours’ of playtime on Game Pass
  • Microsoft also had plans to acquire Supergiant Games and IO Interactive

Microsoft was looking to acquire gaming giants such as Sega, Bungie, and Niantic in the past few years, court documents from the ongoing FTC trial over Xbox parent's Activision Blizzard acquisition revealed. The emails, as reviewed by The Verge, detailed that in November 2020, Xbox chief Phil Spencer wrote to Microsoft CEO Satya Nadella and the company's CFO Amy Hood, requesting strategy approval to approach Sega Sammy — best known for Sonic the Hedgehog games — for a potential game studio acquisition. Microsoft is currently trying to convince the court that its $69 billion (about Rs. 5,65,845 crore) deal to acquire Call of Duty maker Activision Blizzard is beneficial for gaming. The US Federal Trade Commission (FTC), meanwhile, is trying to block it.

“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,” the 2020 email from Spencer reads (via The Verge). He further added that since Sega is a publicly traded Japanese company, there are some ‘deal complexities,' albeit it's unclear whether Nadella matched his enthusiasm for the purchase. The company's presence in the mobile gaming segment in Asia was also a driving factor for Spencer to consider the acquisition. As mentioned before, Microsoft had other targets in sight as well, including Halo and Destiny maker Bungie and Niantic, the minds behind Pokémon GO — revealed in a 2021 internal merger review document.

Rumours from back in September 2020 suggested that Microsoft had been looking to acquire Bungie multiple times, but the deal fell through due to “high price.” At the time, Pete Parsons, the current CEO of Bungie disputed the reports, simply stating that they were false. It's possible they were just referring to the price aspect, though Bungie did split from Microsoft in 2007, and then became an independent company. The Destiny developer was acquired by Sony Interactive Entertainment (SIE) last year. The documents mentioned that Microsoft intended to secure the Destiny IP and its community, while integrating its live ops infrastructure into Xbox Game Studios. The game was also noted to have generated the ‘highest hours' of playtime on Game Pass. Hades developer Supergiant Games and the Hitman reboot creator IO Interactive were also mentioned in the documents.

Late last week, Microsoft claimed that the next generation of gaming consoles — the Xbox Series S/X successor and PlayStation 6 — should be out in 2028. Xbox continues arguing that it is willing to come to a 10-year agreement that would ensure that Activision's biggest franchise Call of Duty is released in parity on PlayStation consoles. Sony has refused to respond to that offer, though if agreed upon, the period exceeds the 2028 release window, allowing COD to flourish on the PS6 as well. Team Green also admitted that it has basically given up competing in the current console wars and will instead focus on delivering quality software and pushing Xbox Game Pass to more gamers.

What are the most exciting titles that gamers can look forward to in 2023? We discuss some of our favourites on the latest episode of Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.
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