While both critics and Microsoft agree on the fact that the company could use more exclusive first-party software, at one point the company was close to drastically expanding its software output, as before they even released their first console they were close to signing a deal with one of the most iconic publishers of the era - Squaresoft.
According to a book by Rusel Demaria called 'Game of X v.1 and 2', which came out last year, but has since resurfaced via ResetEra, Microsoft was close to acquiring Squaresoft in 1999. The deal fell apart at the very last moment, though, as there was apparently a misunderstanding with the price and valuation of the company.
Actually, Squaresoft backed down from the agreed-upon sum, and according to the book they wanted "around one and a half billion dollars more". This made Microsoft back out, and the rest, as they say, is history.
What could have happened had this deal gone through?