Microsoft seriously considered acquiring Sega and Bungie to bolster Xbox Game Pass

Court documents shown during the ongoing battle between Microsoft and the FTC have revealed the former seriously considered acquiring Sega and Bungie.

The battle between Microsoft and the FTC over whether the former’s acquisition of Activision Blizzard should be approved or not continues to unveil some fascinating details about the inner workings at Xbox. The most recent of which was the reveal that prior to striking a deal with Activision, Xbox boss Phil Spencer approached his Microsoft superiors about buying Sega instead.

The Verge reports on June 27 that in an email sent to Microsoft CEO Satya Nadella and CFO Amy Hood in November 2020, Spencer requested approval to approach Sega about a potential acquisition. “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.

Whether that approval was granted hasn’t been clarified. But in another document shown during the ongoing FTC hearing that lists studios Xbox was seriously considering for acquisition, circulated internally in April 2021, Sega is included. Labeled the “Final Watchlist,” another big studio named is Bungie. Singling out Destiny as one of the biggest reasons for trying to acquire Bungie, the document describes the massively popular online multiplayer game as being among the “highest hours generating titles on console Game Pass.”

While the idea of Sega being Microsoft-owned would have been fascinating, its interest in Bungie might be even more so. PlayStation wound up buying Bungie instead, completing the acquisition in July 2022. PlayStation has since been using Bungie’s expertise to drive its growing live service arm, reportedly having the studio weigh in on Naughty Dog’s The Last Of Us multiplayer project.

Related: Microsoft says most PlayStation owners don’t play Call Of Duty, the FTC claims otherwise

A number of other big studios are listed on Xbox’s Final Watchlist including Hitman developer IO Interactive and mobile studio Zynga. Zynga is another studio that has since been snapped up by someone else, Take Two Interactive, but Xbox’s mobile focus will have shifted to King, the successful studio responsible for Candy Crush Saga that will be included in the Activision acquisition.

Update 06/27/23 8:49am CT by Josh Coulson: This article previously suggested series such as Yakuza and Sonic may have become Xbox exclusives had the acquisition gone ahead. It has since been clarified in court documents reviewed by IGN that even if Xbox had been successful in its plans to acquire Sega, it would not have made the studio’s games exclusive to its own platform.