Microsoft considered acquiring Bungie and Sega to bolster Xbox Game Pass, internal emails show
By Tom Warren, a senior editor covering Microsoft, PC gaming, console, and tech. He founded WinRumors, a site dedicated to Microsoft news, before joining The Verge in 2012.
Microsoft was looking at acquiring both Bungie and Sega, according to internal documents from the FTC v. Microsoft hearing. In an email seen by The Verge, Xbox chief Phil Spencer wrote to both Microsoft CEO Satya Nadella and Microsoft CFO Amy Hood, requesting a strategy approval to approach Sega Sammy over a potential acquisition of 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,” said Spencer in the November 2020 email.
Microsoft believed a Sega acquisition would drive Xbox Game Pass subscriptions across PC, console, and cloud. “The global appeal of Sega’s beloved IP will help expand Xbox Game Pass’s reach to new audiences around the world, most notably in Asia, where localized content is critical to success,” said Spencer in his pitch to Nadella and Hood at the time. Sega would also offer game transactions value for monetization opportunities in the future.
It’s not clear what happened with the Sega acquisition and whether Nadella ultimately approved talks. But in a Microsoft internal April 2021 merger review document, Sega was still listed as a key target. Microsoft had identified key areas for acquisitions in PC, mobile, and console across different markets, and Sega, Bungie, Zynga, and IO Interactive were part of a number of companies Microsoft was seriously looking at acquiring.
Bungie, a now Sony-owned studio, was on the list, with Microsoft’s internal document stating that the
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