Neowin.net - Microsoft cancels a video game deal again.

Microsoft cancels a video game deal again.

Posted by Marcel Klum on 16 July 2002 - 19:23 · 21 comments & 1578 views

The company tried to invest cash in Sega so that the Japanese video game publisher could rival game publisher Square.

Microsoft hasn't bought any game publishers to bolster the fortunes of its Xbox video game console, but not through lack of trying.

This spring the Redmond, Washington, software giant almost struck a deal with Sega Enterprises to buy a controlling stake in the Japanese game publisher. But the deal turned out to be too complicated to pull off before the industry's big trade show, the Electronic Entertainment Expo, which took place in May. The failed deal shows Microsoft's dilemmas as it deals with the expected losses related to the Xbox. According to sources familiar with the matter, Microsoft planned to buy a controlling interest in Sega, which would in turn use the cash to acquire Japanese rival Square. Based on Sega's current market capitalization, a controlling stake in the company would have cost Microsoft more than $1.8 billion.

Before Microsoft launched the console, others at Microsoft argued that the company should buy a large game publisher. Microsoft chairman Bill Gates held talks with Sega executives in late 1999 and early 2000, but they couldn't reach a deal at the time because Sega wanted to keep investing in the Dreamcast.

Now Sega no longer has the encumbrance of a money-losing hardware division. It is in the midst of expanding its game production to make games for the PlayStation 2, Nintendo's GameCube and Game Boy Advance, and the Xbox.

It isn't entirely clear why the latest deal failed. One likely problem was that Microsoft wanted to get Square to convert from making games for all of the consoles to focusing exclusively on games for the Xbox, a move that would have cost Square too much in lost PlayStation 2 and GameCube revenue.

News source: Redherring

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(3 replies) #1 Posted by Dazzla on 16 Jul 2002 - 19:28: That's the sort of deal MS need to make for Xbox to be a success, especially in Japan. I'm glad it failed though, I don't own an xbox

#2 Posted by username on 16 Jul 2002 - 20:07: maybe it is true, money cant buy everything

(1 reply) #3 Posted by prell on 16 Jul 2002 - 21:14: [img]http://65.33.19.247:8080/img/xjoke.jpg[/img]

#4 Posted by bilston on 16 Jul 2002 - 21:57: Jap's laughing at the Xbox :E hah

(5 replies) #5 Posted by hobsgrg on 16 Jul 2002 - 22:19: Im glad to see Microsoft are failing to get a monopoly on the console market too, and even with all their money are failing to make a success of it, so that will delay their plans for global domination a little bit

#6 Posted by YahoKa on 16 Jul 2002 - 23:47: Yea microsoft didnt even sell half as many xboxes as nintendo sold gamecubes. Then sony sold like 4 times as much as nintendo (or a lot more but i am not sure about the stats.)

#7 Posted by jago6498 on 17 Jul 2002 - 07:50: Well of course SOny sold more PS2's then the Gamecube, it was out a year before. I'm not hatin' the PS2 tho, I own both the PS2 and the Gamecube. Don;t plan on buying the Xbox any time soon tho.

#8 Posted by drom on 17 Jul 2002 - 08:02: I have a xbox and love it, i don't understand why people don't want to buy it. There is alot of really good games that are coming out for the xbox. I also have the Ps2 and i love it also and it didn't have alot of great games when it came out. It took a while. But i love them both, i live in the us and i hope the xbox and ps2 keep doing well.

#9 Posted by Gunbuster on 17 Jul 2002 - 08:13: The Xbox allways seemed to be a real mixture, yeah its got the power, but it really isn't that awe inspiring in the flesh. I expected that green thing on top to be a dome that glowed with a big X on it, instead it appears to be green tupawear. The controller is physically to big for my hands, the only time I have been able to play one successfully is on the shop stands becuase they support the controller for you. Also the butttons mechanisms seemed to be nicked from a cheap DVD remote. When you consider how cool the Xbox logo and prototype are its a real let down. Its not like American companies can't make good controllers look at mad catz. I personally use a dualforce controller on a usb adapter for my PC, beats any MS sidewinder. Just my 2 pence.

#10 Posted by DigitalDJ on 17 Jul 2002 - 14:11: i dont got an xbox either ...tho id really love a PS2..Xbox still dont got no games im with Dazzla

(1 reply) #11 Posted by tshboy on 17 Jul 2002 - 16:54: it's all about p3n|s 3nvy. argh. why do people bash MS so much? they are a good company. :disappoin

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