Microsoft was interested in acquiring Bungie and Sega for Xbox Game Pass

Destiny 2
(Image credit: Bungie)

What you need to know

  • According to internal documents from the FTC v. Microsoft hearing, Microsoft was at one point interested in acquiring both Bungie and Sega.
  • In 2020, Phil Spencer sent Microsoft CEO Satya Nadella and Microsoft CFO Amy Hood an email in which he requested strategy approval to approach Sega Sammy and discuss acquiring its game developers.
  • Bungie, the creators of the original Halo games and the Destiny franchise, were also spotted on a Microsoft acquisition watchlist from 2021.
  • Microsoft's interest in both companies was largely Xbox Game Pass related, with the firm planning to use their IP to grow Game Pass subscriptions. Reportedly, Microsoft identified Destiny 2 as one of the “highest hours generating titles on console Game Pass.”
  • It's unclear what happened to Microsoft's plans for talks with Sega, though Bungie was acquired by Sony in 2022.

According to internal documents from the FTC v. Microsoft hearing over the latter's proposed $69b acquisition of Activision Blizzard King, Microsoft was considering acquiring both Bungie and Sega at one point.

As shown and reported by The Verge, Microsoft Gaming CEO and Head of Xbox Phil Spencer wrote an email to Microsoft CEO Satya Nadella and Microsoft CFO Amy Hood in 2020 in which he requested strategy approval to explore the possibility of acquiring Sega's gaming studios from Sega Sammy. Microsoft believed that a deal with Sega would bolster and grow Xbox Game Pass subscriptions across PC, mobile, and cloud platforms.

“We believe that Sega has built a well-balanced portfolio of games across segments with global geographic appeal, and will help us accelerate Xbox Game Pass both on and off-console,” wrote Spencer in the email. "The global appeal of Sega’s beloved IP will help expand Xbox Game Pass’s reach to new audiences around the world, most notably in Asia, where localized content is critical to success.”

It's unclear what happened with these plans, but Sega was still listed as one of the firms Microsoft was looking at acquiring in an internal 2021 watchlist. Bungie — the original developers of Halo that went on to make Destiny, one of the most popular live service franchises of all time — was also on this list prior to Sony's acquisition of it in 2022.

Microsoft's document noted that “acquisition of Bungie will include securing valuable IP, Destiny (and its community) and integration of its dev & live ops infrastructure into Xbox Game Studios.” Reportedly, Microsoft identified Destiny 2 as one of the “highest hours generating titles on console Game Pass,” though the document also noted that Bungie had a “high burn-rate” risk.

Other companies on the watchlist included Hitman developer IO Interactive, along with mobile-focused companies and studios like Zynga, Thunderful, Supergiant Games, Niantic, and Playrix. Microsoft approached Zynga before opting to try and acquire Activision Blizzard King instead, and afterwards, Zynga was bought by Take-Two Interactive.

Analysis: The Destiny 2 Game Pass deal that never was

(Image credit: Windows Central)

With Game Pass becoming an extremely important part of Microsoft's Xbox business over the last several years, it doesn't surprise me that the firm was considering acquiring big names like Bungie and Sega for the service. Permanent Game Pass availability for Destiny 2 expansions would no doubt attract plenty of new subscribers since they'd get access to all of the game's content, and with Microsoft aiming to grow Xbox's popularity in Japan, targeting Sega makes plenty of sense, too.

While I'm personally not opposed to Microsoft's proposed merger with Activision Blizzard, I'm not exactly rooting for further consolidation in the gaming market, either. With that said, speaking as a veteran Destiny 2 player that wants the franchise to grow, it makes me sad that we'll probably never see the game's DLCs on Game Pass again now that Bungie has been acquired by Sony.

Brendan Lowry

Brendan Lowry is a Windows Central writer and Oakland University graduate with a burning passion for video games, of which he's been an avid fan since childhood. You'll find him doing reviews, editorials, and general coverage on everything Xbox and PC. Follow him on Twitter.