Microsoft was forming a plan to acquire Square Enix in 2019, according to an internal document published as part of the hearings over the Xbox Activision deal.
The document, dated November 1, 2019, shows an outline of the business case for Microsoft to purchase Square Enix. Microsoft said that "Square Enix owns a diverse suite of gaming franchises that could serve as a cornerstone of our strategy, helping us extend our offerings beyond console and our core market." The company noted that Square Enix's broad gaming lineup spread across console, PC, browser, and mobile games would help diversify Xbox's own portfolio, and expand the platform's reach in Asia.
Microsoft cited bringing Square Enix's "three core franchises" - Final Fantasy, Dragon Quest, and Tomb Raider - and other back catalog titles - including Deus Ex and Kingdom Hearts - to Xbox Game Pass as the other central reason for the plan. The document also noted, however, that it was less interested in Square Enix's amusement and manga publishing businesses, "which mainly cater to the Japanese domestic market and would not be value drivers for Microsoft."
The document goes onto say that all of Square Enix's "currently announced and released games" would continue to be released on their relevant platforms, but adds that "our operating plan calls for us to ship all future Square Enix releases into Xbox Game Pass on a day and date basis and preference Project Scarlett," which was then the codename for Xbox Series X and S.
An attached email memo makes clear that Xbox boss Phil Spencer had input on the creation of this plan, but there's no indication of how widely it was pitched to the higher-ups at Microsoft. Despite this detailed planning, Square Enix notably did not make Xbox's "final watchlist" of potential acquisitions in November 2020.
The hearings have also revealed Microsoft expects the next Xbox and PS6 to launch in 2028.
