Microsoft’s watchlist of gaming companies that it planned to acquire was recently made public, which apparently included SEGA. And, while it might have appeared that the tech giant was close to pulling the trigger, SEGA has reacted to this inclusion by saying that it prefers to stay as an independent studio.
Sonic the Hedgehog developer and former console maker Sega was mentioned in the Microsoft vs FTC hearings this week. The tech giant apparently had plans to acquire SEGA to bolster its Cloud gaming business and presence in the Japanese market.
The FTC presented an email from Phil Spencer as proof that Microsoft wants to “outspend Sony out of business” by acquiring other gaming developers. In the email, Spencer was asking for “strategy approval” to approach Sega about a potential buyout.
Bloomberg reached out to Sega’s chief operating officer Shuji Utsumi for comment about Microsoft’s acquisition plans. Utsumi shot down the talks of being acquired by Microsoft.
“No, not now,” Utsumi said. He declined to say whether Microsoft approached Sega to discuss a possible acquisition.
Sega did emphasize its close relationship with Microsoft after the two companies partnered in the development of games for Microsoft’s Azure cloud platform.
“We are very close with Microsoft and have a great relationship with its management team,” Utsumi shared. “Microsoft particularly has high regard for us. Xbox’s Phil Spencer and Sarah Bond are really serious about values that video game fans emphasize.
Microsoft has been interested in purchasing an Asian game developer. Aside from Sega, Microsoft has also considered purchasing Final Fantasy series creator Square Enix.
“I think we have a hole in Asia,” Spencer said earlier this month. “I’ve said that both to Matt and publicly. I would love to have more of an influence in our own first-party team from Asian creators. There’s nothing that’s imminent, so it’s not a pre-announce of something. But if you just plotted where we are on the map with our first-party, that’s a real opportunity for us.”
I love the fact we can stand here and announce Yakuza and Kingdom Hearts and Final Fantasy coming,” Spencer continued. “That’s through third-party relationships, which take time. And we’ve been really focused on that. But I think we could have stronger first-party creation capability there. We have in the past and I think we should again.”
Microsoft is particularly weak in the Japanese gaming market, which has historically been dominated by Nintendo and Sony. The Xbox is a distant third in the console market in Japan with Sony PS5 and Nintendo Switch consistently outselling the Xbox Series X/S. Microsoft has admitted that it lost the global console wars, being bested by its Japanese counterparts.
The Microsoft vs FTC hearings are coming to a close and a verdict is expected by next week. The tech giant hopes to close its acquisition of Activision Blizzard as soon as possible as it is liable to pay a hefty fine should the deal fail.
