It's no secret that when SEGA fell out of the hardware market, most of the devout fans of 'home of the hedgehog' pledged allegiance to the Xbox brand.

In part due to the early launch titles for the original Xbox - the classics 'Panzer Dragoon Orta' and 'Jet Grind Radio'. Both niche titles brought the SEGA faithful over to Microsoft's house for a party.

Much has changed over recent years though, with SEGA upping their release schedule across not just the Xbox brand, but also the Playstation and to a lesser extent, Nintendo consoles. This rather bulky release schedule helped SEGA rise from the ashes to become a once more successful part of the gaming front.

So it's no surprise that rumors are once again circulating that Microsoft may be about to make a move for SEGA (now SEGA Sammy Corp). It's certainly not the first time we've heard about such a move - the last mention of it being back in early 2004 when it was speculated upon on many industry sites such as The Register and Gamespot. When you think about it, such a move would make perfect sense.

Microsoft are expected to make a 'shocking and desperate' announcement at this years E3 - all we know is that it will be software related and nothing to do with hardware. It's also no secret that Microsoft has had a very hard time in Japan with the 360 - SEGA might be the very company to help turn that around.

SEGA has a huge back catalogue of titles that could be relied upon to help strengthen the Redmond giant in the land of the rising sun. Titles like Sonic, Daytona, Virtua Fighter, Sega Rally and of course the Panzer Dragoon series all have a serious following over there and having those exclusive to the Xbox platform would be a sure fire boost to the Xbox over the next few years.

SEGA Sammy shares have taken a battering over the last two years, dropping from a high of 2050,40yn down to 1020,00yn this week - that effectively halves the market value of the group making it an ideal takeover target.

A buyout of SEGA Sammy would certainly be far cheaper than trying to take on Yahoo and would position Microsoft well for the release of the next Xbox console.

We've contacted Microsoft to ask if there is any truth to the rumor, but expect the usual 'we do not comment on rumor and speculation' in response.

More PlayStation 3 News...