Microsoft considered buying Sega, Bungie, IO Interactive and Supergiant among other companies to boost Game Pass

In November 2020 Phil Spencer, CEO of Microsoft Gaming, sent an email to Satya Nadella and Amy Hood, CEO of Microsoft, CFO of Microsoft, respectively, seeking approval to approach Sega Sammy with the aim of raising the possible acquisition of Sega. The mail has been obtained by The Verge and is part of the documentation provided in the ongoing trial between Microsoft and the FTC for the purchase of Activision Blizzard. In addition to Sega, Microsoft considered acquiring other companies including Bungie, which is now part of Sony.

In his email, Spencer states that Sega has a balanced catalog of games with global appeal that will help drive and expand the Game Pass audience around the world. Microsoft considered Sega a company with intellectual properties with a global reach and placed particular value on localized content, which in markets like Asia is “fundamental to success,” Spancer told Nadella and Hood. It is unknown if Spencer was given the green light, but in April 2021 Sega’s name appeared alongside other companies in an internal mergers and acquisitions document.

This list included other companies that Microsoft was considering acquiring to grow in different sectors and expand the Game Pass audience. The names of Bungie (Destiny) and IO Interactive (Hitman) appear in the document, two studies that are valued for their franchises and experience; Thunderful, a company known for SteamWorld; and Supergiant Games, responsible for Hades. The technology company also had an eye on mobile and was pointing to Niantic (Pokémon Go) which is valued for its technology; Playrix (Homescapes); and Zynga, an industry giant that bought Take Two for $12.7 billion.

It’s unclear how far Microsoft went to try to acquire these companies, but we can now confirm that as of April 2021 they were all on the final purchase list. That same month and year, IO Interactive said it had received “attractive” buyout offers when it parted ways with Square Enix, and a rumor soon followed that it was working on a new fantasy RPG for Xbox. Be that as it may, Microsoft opted for Activision Blizzard and is now fighting in court to complete a deal valued at $68.7 billion.

Few could anticipate that the Activision Blizzard acquisition process was going to be so long, and would allow us to poke our noses into all kinds of confidential information and private conversations between top executives.