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Microsoft cancels a video game deal

Time: 17:05 EST/22:05 GMT | News Source: Red Herring | Posted By: Byron Hinson

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.

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