http://www.gamasutra.com/php-bin/news_index.php?story=17316

I've been saying for a few months now that Microsoft needs to forge new, valuable, and good partnerships in the Asiatic region. As we all know, the Xbox 360 has done much better in Japan, but is still in a mess of a position - it's still well behind in #3. Sales this year have been tepid at best (they're down significantly from 2007, but up from 2006). Microsoft has had some great succuesses with Namco, Tecmo and Mistwaker - but aside from those 3 companies, there have been very little bright spots. Microsoft games have been poor selling mostly (aside from Halo 3), and the system is still viewed as being a POS mostly (again though, it's still going to sell 1.5m units before the end of the generation).

Then enters the idea of strategic partnerships: Microsoft has done such with Toshiba and the HD-DVD addon. Microsoft is also no stranger to aquiring alot of companies. They've bought 2 very good European studios in Rare and Lionhead, and released Bizzarre from their clutches.

So now Microsoft is in a pretty wierd position - they've dropped 2 big-name developers in Bungie and Bizzarre. Even if both work for games on the 360 still, that leaves Microsoft with a pretty bad base of 1st party games, and a diminishing base of 3rd parties that MS can still count as exclusive (mainly Tecmo, Namco, and Realtime Studios).

Maybe it's just me, but I see the idea of Microsoft buying out SegaSammy to be something that would be most advantageous for Microsoft, both in Japan and abroad. SegaSammy sold around 2 million software units in Japan, and 6.25 in the US/Europe for their first 3 quarters in their business year.

But more importantly: Sega systems sold somewhat well in Japan in the Saturn and Dreamcast, despite total failure in the West - the Dreamcast sold 5 million hardware units in Japan, and was regarded fairly well. Sega is the only hardware developer in the East that has any sort of chance for MS to partner with.

And not only this, but Sega has a few key franchises that are/would be critical to some sort of Microsoft revival in Japan -

• Yakuza
• Sonic
• Nights
• House of the Dead (Arcades)
• Phantasy Star
• Skies of Arkadia
• Virtua Fighter
• Crazy Taxi
• Shining Force
• Virtu-On

And a few that do moderately well in the West:

• Football Manager
• Sega Rally
• Golden Axe

And of course, you have the Sega-MS connections that have been forged in the past: Peter Moore worked for Sega before he moved to MS, Sega has used alot of Windows OS'es in development of their products, Microsoft used alot of SegaNet ideas in the creation of Xbox Live, and so on. It's entirely possible that others could buy out Sega, but Microsoft would have alot to gain from it. They have a few strong franchises, and Microsoft would certainly gain a much larger marketshare in Japan. We've seen that with all of the Microsoft moneyhats for Japanese-made games, they haven't been very profitable in Japan. Actually forging a partnership to move hardware is vastly more critical, as the X360 would be a much stronger go-to system by 3rd parties.

Am I crazy for thinking that Microsoft should/could buy SegaSammy out? I mean, the next likely candidate would be Nintendo buying them out since their handheld division has done moderately well with Love & Berry and Mario and Sonic at the Olympics.

It would be nice to see, Microsoft will finally be able to break into the `Teen`game market it couldn`t do with Viva.

I hope they do actually, Sega`s Sonic games are a crime right now.

Wow. I just had a flash of insight.

Thats whats being built up over the last couple of years, Nintendo is preparing to buy Sega. Thats why Sonic is in brawl and Mario has appeared in M&S. I actually really think its quite likely that Nintendo is planning that.

It could be Nintendo, as they've had some strong relationships recently. However, Capcom has done the same with Nintendo at points as well - Capcom (if memory serves me correctly) did a Legend of Zelda game a few years back.

But I do think it'd be most advantageous for Microsoft. If Nintendo bought Sega, they'd be buying a much, much larger company than themselves (N has 3k, SegaSammy has 10k)

@ Rath: I would rather Nintendo purchase Hudson over Sega. Or possibly purchase both for the intellectual rights rather then for Sega's horrible game studio.

I'd love to see a Nintendo made Sonic the Hedgehog game. The series needs a Nintendo style revival.

Well sure, but employee numbers are really meaningless. Nintendo owns dozens of studios, developers, and organizations who total far more employees than they have. Heck, they own the Seattle Mariners. Given that Nintendo has given Sega pretty much every success they've had in the last 3 years, I would be surprised if they merged with anyone else.

Plus, they have had those collaborations recently with Mario & Sonic and Sonic in Brawl. I would say the only other developer who has a relationship that strong with Nintendo is Capcom. Though Namco and Grasshoper have a pretty good one right now too, as does Square-Enix, with their recent collaboration of Itagaki Street DS, and their almost unbelievable amount of DS games.

Solid Snake has his appearance in Brawl... Does it mean Nintendo buys Konami?

Not sure if you heard the story behind that, but Solid Snake added in Brawl was actually Sakurai doing a personal favor for Kojima, who literally begged to have Snake in the game.   Kojima has been friends with Sakurai for years, and he's a huge fan of the Smash Bros. series.  He's been begging Sakurai since Melee to have Snake in the game. 

Sonic was added more as a mutually beneficial business decision.  He may also have been the trade made for lending Mario to Sega for Mario & Sonic at the Olympic Games.   He certainly wasn't a personal favor between developers like Snake was though.  

Blimey, I wrote this up on my blog today!! http://www.bruceongames.com/2008/02/09/sonic-trips-over/ Here is the article:

Sega are one of the longest established names in the gaming industry. Since 1940 theirs is a tale of very good times, such as the 1993 arcade game Virtua Fighter. And very bad times such as the video game crash of 1983 and the demise of the Dreamcast in 2001.

They own a dazzling array of intellectual property: Sonic, Sega Rally, Daytona USA, Phantasy Star Online, Jet Set Radio, Shenmue, Chu Chu Rocket, Super Monkey Ball, Football Manager, Virtua Tennis, Skies of Arcadia and literally dozens of others. One of the finest collections of IP in the whole industry and, you would think, a license to print money.

So it is more than a little surprising that they have just posted a loss of JPY 15.7 billion ($ 210 million) for the nine months to December with a forecasted loss for the full year of JPY 26 billion ($ 242.1 million). This at a time when the game industry is booming.

Sega have already made economy measures, closing 110 amusement arcades. Now they are going to shed 400 staff out of just under 3,500. They have reduced pay and bonuses for managerial staff, yet as recently as December the European management were boasting that they were on the acquisition trail.

So now they are a sitting duck to be taken over themselves. And there can be very few juicier targets. Given good management and that heritage of IP, Sega would be a license to print money. And the icing on the cake is that the buyer would get a very strong foothold in the Japanese market.

I don't think it is that good of an idea ...

I suspect that the core of Sega's problems are management related, and if Microsoft bought Sega and restructured the company in order to make it perform better most of the remaining talent would leave Sega. Essentially (much like their purchase of Rare) they would end up with a hollow shell of a company, and all they would own is a bunch of IPs without the people who knew how to make them enjoyable.