It's an interesting topic, Starcraft, but it's not likely that SE would turn their back on Sony very easily. Sony bailed them out after the near bankruptcy that the first FF moviesent them reelinh towards.  And besides, with the iminent invasion of Iran and possibly Syria teamed with an enormous national debt, US economy is in big trouble, and SE would be loath to sell into such a situation and possibly be damaged by it.

I think that SE shareholders would've sold to MS a long time ago if they wished to, so I'm not inclined to believe that MS will ever get their hands on them. But they could afford it if they wanted to, nonetheless! 

 Like I said, I think if MS wanted SE they would get it whether the actual directors possessed an affinity for Sony or not, because the majority of current stock owners are financially motivated.  As for the embolldened quote, i hope your joking, i pray that your joking.  Microsoft has no large debt, the USA will NOT invade Iran or Syria, and if the US economy was in big trouble, the Japanese economy would be to because they are so heavily linked.

They could theoretically buy SE just fine. But, why would Microsoft want to commit much greater resourcs than normal on a platform that has been thus far producing horrible financial results? That just doesn't make sense, b/c it is bad financial management. If microsoft actually bought SE it wouldn't have the money that it needs for Windows, dividends, its other ventures, HD-DVD and the 360. Buying SE would handicap Microsoft and it makes little point anyway from a strategic perspective, b/c SE is mostly a company that makes RPGs which means that its products will be big in Japan....but the Japanese don't like the 360. So unless Microsoft is planning on a *huge* price drop in japan as well as this purchase I don't see the point, and even then, that would probably not put them over or even close to nintendo so it would in the end accelerate their losses.

MS stated awhile ago that buying up third parties is not their long-term strategy after picking up Rare, Lionhead, and a few others. They purchased those to round out their first-party offerings.

If MS was going to purchase anyone, it would have been Take Two when they were on the verge of outright sale about 6 months ago. Their market value at the time was around $1.6 billion, about 1/2 of SEs by the OP's estimations.

 Last financial year Microsoft's revenue breached $50 billion. Its market capitalisation is $261 billion and its profit last year alone was $12 billion.  Microsoft could purchase SE which is worth $3.3 billion and not even bat an eyelid. It could then go on to purchase Sony, Nintendo and the country New Zealand and still have enought left over for ice-cream and an executives weekend retreat. (ok maybe that last sentence was an exaggeration but Microsoft could purchase SE in its entirety and not experience handicapping of any kind).

1.  When acquisitions happen, it is usually a fact of business that a substantial premium has to be paid on the company being purchased, meaning that if the information that you provided me is correct that SE is in fact worth 3.3billion, then Microsoft might have to pay $6 billion for the purchase. 

2.  Secondly, you do realize that Microsoft has to allocate its earnings among various other things correct?  You completely ignored this point.  Do you have any idea of the expenses that microsoft needs just to keep the Windows division operating?  Do you have any idea of the capital needs to keep HD-DVD afloat?  A company can't just decide to throw away its big moneymaker (windows) and just concentrate on the losing division( 360) and expect for this division to do well by merely making an acquisition. 

Perhaps you didnt understand me. Microsofts PROFIT, was $12 billion. That means that when all was said and done, all expenses had been paid, Microsoft still pulled in a massive profit, EVEN taking into account a billion dollar loss for the xbox warranty.

It is true that a premium is often neccessary to purchase a company. This premium is NEVER even CLOSE to the massive two fold discrepency you just suggested. My country's national airline was almost sold at a price 10% above its share price, and it was a HUGE company compared to SE. In any case, as i have repeatedely said, Microsoft wouldnt need to buy anywhere near the whole $3.3 billion company. 15-25% of it would give them sufficient board room voting rights to get 360 ports for all major games

Edit: OH, and MS has little to do with funding HD DVD, and Windows is one of the biggest cashcows in capitalisms history. At this current point in time microsoft has just completed a windows platform (vista) that will probably be around for 6 years. This is the part of their business cycle where they will begin to see less expenses and greater returns

I would laugh my butt off if this happens. I will cry to know that the story based Final Fantasy are finally coming to the Xbox 360. Actually I will put that in my sig. I granuatee we will have a Final Fantasy story based game come to the 360 soon. Not the 360 but the next console Microsoft releases we will see that!

And with MGS4, I bet that comes to the 360, just like MGS2: Substance came to the original Xbox.

Yes, MS's profits have been nice indeed, but MS has to divide this money among its divisions, and still leave enough for dividends but do you really think that Microsoft would allocate a much greater than normal amount to the X-box by the act of purchasing Square Enix?

Thirdly, MS has about $6.1 billion reserved in cash. A purchase of SE would take this down to zero or very close to it, so MS would have to go into debt to do this. Not only would MS have to pay a premium for a company that it couldn't strategically make much use of since its strongpoint in games is america which traditionally hasn't been that big on RPG's, but it would have to go into debt in order to do so thus defeating your argument.

Umm I really can't see Microsoft's cash reserves at $6.1 billion... I mean it was at $28.9 billion on April 1st, 2007 and it's extremely doubtful that they would have spent over $22 billion since then (They only spent $7 billion on aquisitions and capital expenditures over the past 5 years prior to that).

Also buying Square would not put Microsoft into debt but it would probably be a hard sell to their shareholders since it's not like Square Enix itself could ever generate the extra cash back (they'd likely only sell to Microsoft for some outrageous amount far above what they'd sell to Sony or Nintendo) and the company (Square Enix) would likely lose revenue if they became Xbox 360 exclusive (although since they're making DS and PSP games as well it likely wouldn't be that major of problem like it would have been when Microsoft originally tried to buy SquareSoft in 1999).