Microsoft Considered Square Enix Acquisition for Xbox’s Expansion in Asian Markets and Popular Franchises
Microsoft Considers Acquiring Square Enix
Yet another of Microsoft’s considered acquisition targets has been revealed as Final Fantasy publisher Square Enix.
Documents published as part of the Xbox owner’s battle against The FTC show that in 2019, before it swooped for Activision Blizzard, it considered acquiring Square Enix and its arm of Western studios (which were later sold to Embracer Group).
‘Project Phoenix’, as Microsoft referred to the potential bid, was driven by the incentive to grow Xbox’s influence in Asian markets, and acquire SE’s biggest franchises Final Fantasy, Dragon Quest and Kingdom Hearts.
Microsoft was also incentivised by what it described as a “robust” portfolio of mobile games at the Japanese firm, which it believed could help drive Game Pass adoption of smart devices.
On several occasions, Microsoft gaming boss Phil Spencer has publicly expressed a desire to purchase an Asian game developer, “in particular a Japanese studio”.
Ultimately, the Square Enix acquisition interest seemingly did not progress. According to Microsoft documents, its filtering process involved removing studios that failed to meet certain criteria, including a lack of original IP experience, being a “follower without innovation”, or a lack of “cultural fit” or “maturity in business”.
One of the exhibits shown during this week’s FTC v Microsoft federal court case was a list created in April 2021 of around 100 developers and publishers that could be potential candidates for acquisition.
The full list includes such studios as Bloober Team, CD Projekt Red, Level-5, Harmonix and From Software.
17 companies that made Microsoft’s shortlist included Sega, Bungie and IO Interactive, as well as the likes of Housemarque, Remedy Entertainment, Crytek and Paradox Interactive.