Microsoft in Rare Buyout of Nintendo

Microsoft in Rare Buyout of Nintendo

In a move which has become a company trademark, Microsoft have acquired Nintendo's share in U.K. based game developer, Rare Ltd.

Nintendo, only last week, passed the chance to buy Rare outright and immediately announced the sale of their 49 percent stake in the company to their rivals. It is not yet known if Microsoft have also bought the rest of Rare, since the company has refused to officially comment on the transaction.

Rare is a company that has become closely associated with Nintendo, through the release of various classic games such as Donkey Kong Country and James Bond action game GoldenEye. Nintendo claim that they have retained the rights to all released and in-development games including all Donkey Kong and Star Fox titles. A new Star Fox game, Star Fox Adventures, is expected to be released for the GameCube in the coming weeks.

Nintendo had the ability to continue its exclusive relationship with Rare, but in looking at the company's recent track record, it became clear that its value to the future of Nintendo would be limited, said Peter MacDougall, executive vice president of sales and marketing for Nintendo of America. In other words, we passed on this opportunity for very good business reasons, he added.
On the surface this statement makes sense since sales of Rare games accounted for 9.5 percent of Nintendo's 2001 total software unit sales, but only for 1.5 percent in 2002.

The question however, is what is behind the deal. It is a well-known fact that Microsoft are in urgent need of exclusive titles, preferably hits, for the XBox, since, other than Halo, no other XBox game has managed to make an impact on the market. It is also well known that Microsoft, although accused of many things, have always made decissions based on intelligence rather than desperation. Whether or not Rare will be able to produce some of their old Nintendo Magic for the XBox remains to be seen.