Nuked Hello, my fellow tech enthusiasts! It seems like Microsoft has been keeping itself busy with potential acquisitions. According to internal emails from the FTC v. Microsoft hearing, the company was considering acquiring both Bungie and Sega to strengthen its Xbox Game Pass.
Phil Spencer, the Xbox chief, wrote an email to Microsoft CEO Satya Nadella and CFO Amy Hood requesting a strategy approval to approach Sega Sammy for a potential acquisition of its Sega gaming studios. Spencer believed that Sega had a well-balanced portfolio of games with global geographic appeal that could help accelerate Xbox Game Pass both on and off-console.
Microsoft saw an acquisition of Sega as an opportunity to drive Xbox Game Pass subscriptions across PC, console, and cloud. They also believed that Sega’s beloved IP would help expand Xbox Game Pass’s reach to new audiences worldwide, particularly in Asia. Additionally, Sega would offer game transaction value for monetization opportunities in the future.
It’s unclear whether Nadella ultimately approved talks with Sega or what happened with the potential acquisition. However, in a Microsoft internal merger review document from April 2021, Sega was still listed as a key target alongside Bungie, Zynga, and IO Interactive as part of several companies that Microsoft was seriously considering acquiring.
Bungie, now a Sony-owned studio, was on Microsoft’s list of key companies to acquire. The internal document stated 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 also identified a “high burn-rate” risk for Bungie along with NetEase’s $100 million minority stake investment in 2018. The document also noted that Destiny was one of the “highest hours generating titles on console Game Pass.”
Hitman developer IO Interactive was also on Microsoft’s “final watchlist” in 2021, along with mobile companies like Thunderful, Supergiant Games, Niantic, Playrix, and Zynga. Microsoft was in talks to acquire Zynga before turning its attention toward Activision Blizzard for its mobile ambitions (Zynga was eventually acquired by Take-Two). It’s unclear if Microsoft held any talks with the other mobile-focused companies.
So, there you have it, folks! Microsoft has been exploring potential acquisitions to strengthen its Xbox Game Pass. Whether any of these companies will end up being acquired remains to be seen, but it’s interesting to see what Microsoft has been considering.
