Microsoft Corp. considered acquiring Japanese game publisher Square Enix Holdings Co. as recently as 2019, according to documents from the Federal Trade Commission’s antitrust suit against the software giant.
(Bloomberg) — Microsoft Corp. considered acquiring Japanese game publisher Square Enix Holdings Co. as recently as 2019, according to documents from the Federal Trade Commission’s antitrust suit against the software giant.
The documents, evidence in the US government’s suit to stop Microsoft from buying Call of Duty publisher Activision Blizzard Inc. for $69 billion, also show the software giant looked at acquiring Sega and Bungie.
Many of Square Enix’s games, including the new Final Fantasy XVI , are exclusive to Sony Group Corp.’s PlayStation console, the main competitor to Microsoft’s Xbox. In 2021, amid rumors of interest from potential buyers, Square Enix said, “We do not consider selling off the company or any part of its businesses, nor have we received any offer from any third party to acquire the company or any part of its businesses.”
But the company, with a current market value of about $5.9 billion, was in Microsoft’s sights, according to an internal document from the US software company.
“An acquisition of Square Enix would provide valuable content assets that could accelerate the growth of Xbox Game Pass and drive success for Project Scarlett,” the 2019 memo reads, referring to Microsoft’s game subscription service and upcoming Xbox consoles. The company also saw potential for gains in mobile and in Asia.
In court, Microsoft gaming executive Phil Spencer has said that the company moved to acquire ZeniMax in 2020 for $7.5 billion in part because of the potential for the upcoming game Starfield to release exclusively on PlayStation. Historically, Sony has more successfully leveraged exclusive titles to sell its console.
Destiny maker Bungie and Sega were also potential acquisition targets, previous documents from the case revealed. Microsoft weighed how games from these companies could potentially drive customers to its Game Pass, PC and console ecosystem. Sony agreed to buy Bungie in February 2022 for $3.6 billion.
Microsoft looked at Square Enix previously. When Microsoft was building the first Xbox, released in 2001, executives flew to Japan to meet their counterparts at Square Enix. The talks fell through after a banker said that the price was too low, Bloomberg reported previously.
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