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Testimony this week from the FTC-Microsoft trial revealed more about the tech giant's ambitions to bolster its gaming business.

Why it matters: Microsoft has been looking to add to its gaming business for at least a few years.

What's happening: Microsoft is trying to get its $68.7 billion proposed acquisition of Activision Blizzard across the finish line, while the FTC wants to kill it. The trial could decide the deal's fate.

On Monday, internal emails that were released detailed Microsoft's gaming chief Phil Spencer's plan to buy "Sonic the Hedgehog" maker Sega to help prop up its Xbox Game Pass subscription service. The proposal listed Sega's enterprise value at $2 billion.

It wasn't the only one, either: The gaming giant was one of 12 possible gaming acquisitions for Microsoft (after a review of 46).

In yet another M&A plan that was released into evidence, Microsoft had an additional watchlist of companies to try to buy that included Supergiant Games, Niantic, Bungie, Scopely, IO Interactive and Thunderful. (Sony would buy Bungie in 2022 for $3.6 billion.)

On Wednesday, it was revealed that back in 2019 Microsoft considered acquiring developer Square Enix, known for the "Final Fantasy" franchise.

Of note: Microsoft would end up buying ZeniMax in 2020 for $7.5 billion.  Spencer said this week part of the rationale for that hefty purchase was to keep Starfield, one of its marquee games, from going to Sony's rival PlayStation exclusively.

What they're saying: Sega's co-COO Shuji Utsumi threw cold water on any hints that Sega may be for sale, simply telling Bloomberg: "No, not now," when asked about Microsoft.

What's next: Thursday is the fifth and final day of the trial. After that, a judge will rule on if the FTC can halt the deal's closing until it can complete its legal challenge.

A hearing to block the deal entirely will begin Aug. 2. The deal has a termination date of July 18, though it's possible the deadline could be extended.

Microsoft has said if the FTC is successful this week, it would effectively kill the deal and force Microsoft to pay as much as $3 billion in breakup fees.

Microsoft previously tried to acquire Sega and Square Enix

Microsoft's has been big game hunting for awhile.

Illustration of pixelated justice scales with Microsoft logo on one side.

Microsoft

Testimony this week from the FTC-Microsoft trial revealed more about the tech giant&#x27;s ambitions to bolster its gaming business.Why it matters: Microsoft has been looking to add to its gaming business for at least a few years.

Microsoft previously tried to acquire Sega and Square Enix

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