An internal document revealed during the FTC investigation into Microsoft’s planned acquisition of Activision Blizzard has revealed a number of other major studios targeted for purchase by Microsoft. In an email surfaced by The Verge, Xbox boss Phil Spencer identified Sega as one of the company’s primary targets, with plans progressing to the discussion stage.
Emails revealed during the FTC investigation reveal Spencer was enthusiastic about Microsoft canvassing an acquisition with Sega, as it had a ‘well-balanced portfolio of games across segments with global geographic appeal’ that would’ve helped Microsoft build out its Xbox Game Pass library.
The email further reveals the company’s top priorities for its future acquisition targets. As stated, Microsoft was looking for a company that would help address the following segments and geographic combinations:
- PC in North America and Europe
- Mobile in North America and Europe
- Console and PC in APAC
‘Sega is the most attractive next acquisition target due to its global PC catalog, presence on mobile in Asia, and global brand affinity on console through it classic IP,’ Spencer wrote.
Read: Microsoft reportedly wanted to buy Zynga before Take-Two
The details of these talks with Sega were not made clear in the FTC investigation, but a secondary document revealed it wasn’t the only game studio being canvassed for potential acquisition. As revealed earlier in the court case, Zynga also made the list of notable acquisition targets – and a number of other prominent studios were also listed on a Merger & Acquisition ‘M&A Final Watchlist’ surfaced during the investigation.
Beyond Zynga and Sega, Microsoft also included Bungie on this list, for its ‘established ability to ship and scale games’ – although it’s likely Sony purchased the studio before further action could be taken.
Also included on the potential M&A watch list were:
- Thunderful (SteamWorld Build) – Expertise in cross-gen casual mobile games
- Supergiant Games (Hades) – Developer of top indie titles
- Niantic (Pokemon Go) – Very strong technology infrastructure, focus on XR and innovative mobile experiences
- Playrix (Homescapes, Gardenscapes) – Strong franchises and content breadth; world-class in designing, making and running successful games
- IO Interactive (Hitman) – Owner of AAA franchises with an established ability to ship and scale games
- Scopely (Monopoly Go!, WWE Champions) – Very strong tech infrastructure to support non-owned IP; opportunity to complement Xbox Game Pass IP
It’s unclear how far this watch list progressed, and whether companies were actually approached for potential acquisition.
According to Spencer, Microsoft was quick to realise its biggest gaps – most significantly, in the mobile games market – and chose to approach Activision Blizzard to remedy them. So far, this planned acquisition has proven to be a major hurdle. As the investigation continues, its completion remains uncertain.
