Sega says it’s not open to acquisition talks following Microsoft interest

Sega has said it’s not interested in acquisition talks after news emerged that it has been a target for Microsoft in recent years.

Documents published last week as part of the Xbox maker’s legal battle with the US Federal Trade Commission revealed that in November 2020, Xbox boss Phil Spencer requested approval from Microsoft’s CEO to approach Sega Sammy about buying its gaming studios.

Spencer described Sonic firm Sega as Xbox’s “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”.

Following the news, this week Sega Sammy’s shares rose to their highest since 2007.

Asked if the company is open to acquisition talks, Sega co-chief operating officer Shuji Utsumi told Bloomberg: “No, not now.” He declined to say if Microsoft had made a formal approach.

Sega has a close relationship with Microsoft. Its Creative Assembly studio worked on Xbox titles Halo Wars 2 and Age of Empires 4, and in 2021 the Japanese company announced a strategic alliance which will see it develop games using the US firm’s Azure cloud platform.

“We are very close with Microsoft and have a great relationship with its management team,” Utsumi said. “Microsoft particularly has a high regard for us. Xbox’s Phil Spencer and Sarah Bond are really serious about values that video game fans emphasise.”

Further reading

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Microsoft explored buying Sega, Bungie and IO Interactive

Supergiant, Niantic and Zynga have also appeared on the Xbox maker's M&A watchlist in recent years

On several occasions, Microsoft gaming boss Spencer has publicly expressed a desire to purchase an Asian game developer, “in particular a Japanese studio”.

Final Fantasy publisher Square Enix has also been considered as an acquisition target, legal filings revealed this week.