Microsoft floated the idea of a Sega-branded Xbox Series X|S exclusive to Japan

Sega was also Microsoft’s primary acquisition target in 2020

It’s not a secret that Microsoft’s consoles have a hard time on the Japanese market, where the products of Nintendo and Sony are dominating people’s homes. A leaked email, which came to be published as part of an unsealed batch of documents during the ongoing court battle between Microsoft and the Federal Trade Commission (FTC), shows that the company floated the idea of enlisting Sega’s help to turn its fortunes in Japan around.

In the exchange between Xbox chief Phil Spencer and his colleagues, which happened on June 1, 2020, Spencer mentioned that Sega was doing a “nice job” in supporting Microsoft: “I love the rumors that we’d launch our Xbox in Japan with a Sega logo on it.”

He then added a few additional people to the conversation, writing: “There is a root of an idea here.” Spencer’s rough plan was that Sega could release a Limited Edition of the Xbox Series X|S in Japan with its own branding, maybe even including some of its popular franchises like Sonic. “They are doing good work with us on a lot of fronts and it could be something to consider,” he wrote.

Sega was in Microsoft's sights in more ways than one in 2020 / Sega

Evidently, this discussion went nowhere and a Sega-branded Xbox never materialized, so the question of whether this might have led to a rise in Xbox’s popularity in Japan will always remain unanswered.

This is not the only time Sega was a topic of debate at Microsoft and Xbox. On November 10, 2020, Spencer asked Microsoft’s leadership to request “Strategy Approval to approach Sega Sammy regarding a potential acquisition of their Sega gaming studios.” He argued 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.”

In the attached briefing document, Spencer’s team laid out why “Sega is the most attractive next acquisition target.” It cited “its PC catalog, presence on mobile, and global brand affinity” as the primary reasons to target Sega, as this mixture of strengths would help Xbox achieve growth in several prioritized areas at the time, which were the PC and mobile gaming markets in Europe and North America as well as the console and PC gaming market in the Asia-Pacific region.

Phil Spencer's Sega ambitions never came to fruition / Microsoft

Back then, Sega was leading a substantial list of potential acquisitions, which also included Bandai Namco, Capcom, Konami, Netmarble, Nexon, Playrix, Square Enix, Take-Two, Ubisoft, Valve, and Zynga – Activision Blizzard, interestingly, was not in the company’s sights back then.

Just like the idea of a Sega-branded Xbox, this acquisition never panned out, though it’s unclear if Microsoft’s leadership simply didn’t authorize Spencer to approach the company, or if Sega resisted the move.

These are not the only plans from Microsoft revealed by recently published court documents: Other papers confirmed the next gen Xbox to be planned for a 2028 launch and detailed some technical specifications, leaked several unannounced games and their release windows, and unveiled the all-digital Xbox Series X refresh. They also showed that Microsoft had plans to buy Nintendo and Valve.