Intresting article about Microsoft's advent into the console race from an ex employee.....
http://uk.ign.com/articles/2013/02/08/why-did-microsofts-acquisition-of-sega-fall-throughThe common theme seems to be that Microsoft wanted to take Sony down at all costs, Microsoft themselves are denying it.
Considering the actual sales of Sega's games on the first xbox it was probably a wise move not to buy them and judging how MS kinda messed around with their studios thank god it didn't happen.