Microsoft's felt Sega lacked 'enough muscle' for acquisition

A former Microsoft employee claims that the company considered buying Sega to crack into the game console industry, but Bill Gates felt that it lacked "enough muscle" to compete with Sony.

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Microsoft is a heavyweight in game consoles now, but before it made its mark with enormous controllers and Master Chief, the company was looking into ways to get a foothold. One idea was to purchase an existing company like Sega, but then-CEO Bill Gates felt the house that Sonic built lacked the "muscle" to compete with Sony.

Joachim Kempin worked at Microsoft from 1983 to 2003, and had an inside look at the machinations of Microsoft's cracking into the industry. "There were three companies at that point in time, I think this was [Sony,] Sega and Nintendo," he told IGN. "There was always talk maybe we buy Sega or something like that; that never materialized, but we were actually able to license them what they call Windows CE, the younger brother of Windows, to run on their system and make that their platform. But for Bill [Gates] this wasn’t enough, he didn't think that Sega had enough muscle to eventually stop Sony so we did our own Xbox thing."

Kempin says Sega was "a very different bird," and that Nintendo was having financial trouble at the time of the 3D transition, which led Sony to capture the market quickly with its first PlayStation. "They took off, and everyone else was left behind."

While Microsoft never bought Sega, they did eventually get former Sega COO Peter Moore, that handsome tattooed devil.

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  • reply
    February 8, 2013 11:50 AM

    Steve Watts posted a new article, Microsoft's felt Sega lacked 'enough muscle' for acquisition.

    A former Microsoft employee claims that the company considered buying Sega to crack into the game console industry, but Bill Gates felt that it lacked "enough muscle" to compete with Sony.

    • reply
      February 8, 2013 1:13 PM

      It wasn't exactly smooth sailing for Microsoft immediately, especially in other countries. I'm surprised they didn't take the "risk." I'm surprised Gates would really have "felt" this way considering who they did pick. Microsoft wouldn't have been as successful as they were without IPs from Co.s such as Rare and Bungie, much smaller (at the time) by comparison to a company that actually dove into the arcade and console markets.

      • reply
        February 8, 2013 4:22 PM

        You could write textbook on cultural market penetration of the x-box and x-box360. I'd say they made a lot of right moves to win the respect of the eastern market within a market that was traditionally dominated by the east.

      • reply
        February 8, 2013 5:28 PM

        seems to look like the right bet to me given that Sega basically hasn't managed to do anything big with their major IPs since then

    • reply
      February 8, 2013 5:10 PM

      If they were to buy Sega, I think it'd mainly be for Japan market penetration.

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