Microsoft Considered Buying Square Enix


Amidst Microsoft's legal defense of its proposed acquisition of Activision Blizzard, a trove of insider information about the video game industry has been unveiled through court documents. One intriguing revelation involves the companies that Microsoft had contemplated acquiring, with Square Enix, the renowned creator of the Final Fantasy, Dragon Quest, and Kingdom Hearts franchises, being among them. The covert bid was known internally as "Project Phoenix," and Microsoft saw the potential for it to bolster its presence in Japan, where the Xbox brand has historically faced challenges. However, as with other potential acquisitions, Microsoft eventually decided to explore alternative options.

According to Microsoft's documents, multiple factors contributed to these proposed acquisitions not progressing beyond the conceptual stage. The most plausible explanation cited in the documents was a lack of "cultural fit." It is difficult to envision a scenario in which a Japanese company like Square Enix would be inclined to entertain an acquisition offer from Microsoft. Moreover, Square Enix's strong ties with PlayStation and Nintendo, cultivated over a long-standing history, would likely have dissuaded any interest in such a proposition. Ultimately, these considerations became moot when Microsoft pursued its bid for Activision Blizzard instead.

Since entering the console market, Microsoft has encountered greater challenges in garnering a following in Japan compared to other regions. Nintendo's portable platforms have enjoyed considerable success in the country, while Sony's collaboration with Japanese publishers like Konami and Capcom has solidified PlayStation's stronghold. Had Microsoft acquired Square Enix, it would have undoubtedly sparked curiosity about the potential industry-wide impact of such a move.

Interestingly, as Tom Warren from The Verge highlights, the list of Microsoft's proposed acquisitions was never intended to be disclosed to the public. It was meant to be redacted from the documents but, inadvertently, the information became publicly accessible. PlayStation has also experienced a similar situation within this case, with the revelation of the development cost of Horizon Forbidden West, amounting to $212 million.

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