Xbox had Sega, Bungie, and seven other studios on its "final watchlist" for acquisition

Microsoft had designs on acquiring Sega back in 2020, and eight other studios made the company's "final watchlist" for acquisition, according to documents revealed as part of the hearings over the Xbox Activision deal.

The documents, published by The Verge, include a November 2020 email from Xbox boss Phil Spencer to Microsoft CEO Satya Nadella and CFO Amy Hood. The email takes the form of a request for 'strategy approval,' where Spencer lays out the business case to approach Sega Sammy Holdings for a potential purchase of Sega's game studios.

"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 its classic IP," Spencer wrote. That makes it sound like the likes of Total War and Hatsune Miku: Colorful Stage were as important to Microsoft's interest as beloved console games like Sonic, Like a Dragon, and the Atlus RPG catalog.

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In another document published in 2021, Microsoft had seven studios on a "final watchlist" for acquisition. Those include Supergiant Games, the beloved studio behind indie hits like Hades, and Thunderful, a growing publishing group responsible for the SteamWorld games, among many others. The list also includes mobile publishers like Zynga, Playrix, Scopely, and Niantic - yes, the Pokemon Go people.

There are AAA publishers on the list, too. Hitman developer IO Interactive was on the list with an eye towards its "specialized expertise in regional IP game launches." Destiny 2 developer Bungie's "established ability to ship and scale games" was also noted.

A number of insiders reported back in 2020 that Bungie and Microsoft were in talks about an acquisition which fell through because the price for the Destiny 2 dev was too high. Bungie CEO Pete Parsons said at the time that those claims were "false." Bungie would later be acquired by Sony. Similarly, another Microsoft target listed here, Zynga, was eventually acquired by Take-Two.

Broadly, industry wisdom suggests that every company in games is constantly talking to every other company about potential mergers and acquisition, so none of these revelations should come across as being entirely shocking. However, it's extremely notable that some of the specifics of where Microsoft was looking to spend its considerable resources have now been made public.

The recent hearings have brought us plenty of other revelations, from Microsoft's expectations of next-gen consoles in 2028 to the FTC's belief about recent console war winners.