Microsoft wanted to buy Sega back in 2020
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Microsoft's gaming chief Phil Spencer pitched his bosses a plan to purchase Sega, the makers of Sonic the Hedgehog, back in 2020. But Sonic wouldn't have become Xbox-only.
Driving the news: The idea was detailed in an internal email from Spencer to Microsoft's CEO and chief financial officer that was released to the public Monday as part of the Federal Trade Commission's attempt to block the tech giant's purchase of Activision Blizzard.
Details: It's unclear what became of the plan, but Spencer's hope, as explained in the email, was to entice Sega Sammy Holdings to sell 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," Spencer wrote.
- The plan would have added Sonic the Hedgehog, Shin Megami Tensei, Yakuza, Football Manager and other large franchises to Microsoft's portfolio.
- In his memo, Spencer and his team said the deal would bolster the Xbox Game Pass subscription service and lead to more game sales on more platforms. Notably, the proposal called for Sega games that had been exclusive to Sony or Nintendo to also come to Xbox but noted "we will continue to sell acquired games and franchises across all game platforms."
- All new games would launch "with subscription exclusivity" on Game Pass.
Between the lines: The proposal listed Sega's enterprise value at $2 billion and listed it as one of 12 gaming acquisition for Microsoft (after a review of 46).
- "Outside of pursuing a mobile-first strategy, we conclude that Sega is the most attractive next acquisition target due to its PC catalog presence on mobile, and global brand affinity," the memo states.
- In another M&A plan released into evidence for the FTC case, Microsoft had listed Supergiant Games, Niantic, Bungie, Scopely, IO Interactive and Thunderful on a watchlist for companies to potentially try to buy.
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