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. Axios
I don't fully understand what the end goal would be. Them staying multiplatform would seem like a relief until you get to the next question: why even do it then? At best Microsoft could funnel money into Sega, but bigger budgets doesn't ensure good things happening. And at worst they could gut the company to pieces and get their western studios to make botched attempts at whatever two or so IPs they'd use from the remains. Not saying it'd be that bad if they were snatched up, but hrm. The worry persists. I would've been more accepting of Sega being swept up by MS in the later 90s / early 2000s when they were in a more deeply-rooted partnership, and all this talk made logical sense. But those days are long over. MS looking into it this late, plus all the doomspeak Phil Spencer's been making lately, just tells me he's in crisis mode and is throwing their company's gargantuan weight around. Trying to fix all the mistakes they made in lacking a brand identity way after the damage had already been done. Should've thought about this sooner! Spoiler Also I know the MS/Sega discussions from the 2000s are met with "but look what they did to Rare!", but Rare did that to themselves. That company was a hot mess barren of good ideas. It didn't have to be like that, they just kinda sucked. But I digress. All I'm saying is MS's later management has fumbled much worse on their acquisitions. Maybe they wouldn't have bothered if they adopted Sega's at the start. Idiots, all of 'em.
The goal is to suck in as many developers and publishers as they can for gamepass rather than just settling on paying them to be on it using contracts, they want to control and own them outright to most likely make it as easy as possible for them to eventually transition into a subscription only model with a focus on cloud streaming instead of physical hardware.
Would have been utterly awful for Sega and for the company's fans, considering how much they sell on Nintendo systems and how little on Microsoft ones, comparatively speaking. Can't really see a Japanese company enthusiastically embracing Xbox either.
Pretty much reaffirms everything I've known about Microsoft since I was an undergrad computer science student: they're just a venture capital company with a few thousand maintenance coders doing the work of a few hundred. Their approach has always been to acquire, embrace, extend, and extinguish better alternatives to their products. They did a masterful job of imposing IBM's cultural norms on a game studio when they acquired Rareware and aggravated a mass-exodus of talent that had been underway since way back in 1999. Comparing Halo 4 and 5 to Halo Reach, I can see the total lack of risk-taking, and the storytelling and lore really fell by the wayside. I can't imagine innovative games like Yakuza coming out of a Microsoft-owned Sega; I'm not saying it's a bucket list experience, but Yakuza is a rare window into Japanese culture that dares to treat its audience like they're not a bunch of baka gaijin (馬鹿外人).
