Xbox maker Microsoft once pondered purchasing Sega instead of developing its own console, a former exec at the company has revealed.

Microsoft ex-boss Bill Gates ultimately decided against the move after seeing Sega's Dreamcast fail to compete with Sony's PlayStation.

"There were three companies at that point in time, I think this was [Sony], Sega and Nintendo. There was always talk maybe we buy Sega or something like that," former Microsoft exec Joachim Kempin told IGN.

Everything went better than expected.

"That never materialised, but we were actually able to license them what they call Windows CE, the younger brother of Windows, to run on their system and make that their platform."

Kempin worked at the company between 1983 and 2002, during which time Gates ultimately pushed to launch a console of Microsoft's own.

"For Bill [Gates] this wasn't enough, he didn't think that Sega had enough muscle to eventually stop Sony so we did our own Xbox thing.

"There were some talks but it never materialised because Sega was a very different bird. It was always Sony and Nintendo, right? And Nintendo had some financial trouble at that point in time, so Sony came out with the PlayStation and bang! They took off, and everyone else was left behind."

The original Xbox went on to sell 24 million units, compared to the Dreamcast's 10 million.

Joachim Kempin slagged off Microsoft boss Steve Ballmer in January. He said Ballmer was too old and too interested in preserving his place on the throne to do what was necessary to steer Microsoft to success.

Kempin's revelations may make great headlines and gossip, but there are those who dismiss his claims as a cynical attempt to sell his book, Resolve and Fortitude, which details his time at Microsoft.