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Microsoft Gaming head Phil Spencer asked his bosses to approve a strategy for acquiring Japanese publisher SEGA, back in November 2020, according to an internal email that was presented at the FTC v Microsoft hearing.
Spencer's email to Microsoft CEO Satya Nadella and other Microsoft executives features key points on why SEGA is seen as an ideal candidate to grow the Xbox Game Pass subscription service, especially in Asia, where Xbox have struggled to attract new users over the last several years.
Spencer states that Sega has "a well-balanced portfolio of games across segments with global geographic appeal". The email also mentions the issue of SEGA being a publicly traded company in Japan, which would be a big hurdle for the potential deal as the Japanese government would have to approve the merger.
Interestingly, SEGA games would continue to sell on all game platforms, meaning that Microsoft would not lock SEGA's portfolio to their own platforms like Xbox Series X|S and PC. This is certainly an interesting twist as releasing games on PlayStation 5 and Nintendo Switch would probably hurt the potential expansion of Xbox in Japan.
Though, Microsoft would release all games on day one on Xbox Game Pass and make them exclusive to their subscription service, meaning SEGA games would not be able to appear on PlayStation Plus.
Microsoft's key points for the SEGA acquisition
- Xbox Game Pass - Subscription exclusivity of current and future releases will improve Xbox Game Pass' appeal and value to players. This will result in new subscribers across console PC and cloud. Further, 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.
- Game Transactions - We will continue to sell acquired games and franchises across all game platforms.
Since all of this happened almost three years ago and Microsoft are in the middle of the Activision Blizzard deal, it's safe to say that their plan to acquire SEGA is no longer alive or it's been halted while the company is fighting with FTC and CMA over Activision Blizzard merger.
It is possible that Microsoft will look to accelerate their SEGA acquisition plans after the Activision Blizzard deal as one of their primary goals is still to grow in the Asian market.
More exclusive information about Microsoft's internal plans could be revealed today, when the third day of the FTC v Microsoft hearing takes place.
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