Microsoft’s buy-out of developers, from Ninja Theory, Obsidian, Bethesda, and more in the last few years is still fresh in our mind. But did you know that at one point in history, Microsoft actually tried to acquire Nintendo? And failed miserably? At least according to Bloomberg’s latest report on the original Xbox launch. Back in 2000, the company was trying to acquire major game developers and publishers to instantly strengthen its foothold in the new industry. Unfortunately, it doesn’t go well for the Windows giant.
According to the report, former Xbox head of business development Bob McBreen said the very first company they reached out to buy was EA but they quickly said, “No, thanks.” EA’s then-CEO Larry Probst was afraid that Microsoft “would abandon the gaming market and pretend like it never happened” in case the Xbox failed. And when it comes to their second choice, a Nintendo acquisition, Kevin Bachus, third-party relation at the time, said that they were basically being laughed at for a whole hour.
“Steve [Ballmer] made us go meet with Nintendo to see if they would consider being acquired. They just laughed their asses off. Like, imagine an hour of somebody just laughing at you. That was kind of how that meeting went.”
McBreen added that his team was also trying to acquire Nintendo’s first-party titles on their new console. The pitch? Well, Nintendo’s hardware “stunk” compared to Sony’s, and Xbox will be much better. As you can guess, the attempt failed flat on its face.
We actually had Nintendo in our building in January 2000 to work through the details of a joint venture where we gave them all the technical specs of the Xbox. The pitch was their hardware stunk, and compared to Sony PlayStation, it did. So the idea was, “Listen, you’re much better at the game portions of it with Mario and all that stuff. Why don’t you let us take care of the hardware?” But it didn’t work out.”
Later they tried approaching Square (before the merger and becoming Square Enix) and the now-defunct Midway Games, maker of Mortal Kombat. However, Square deemed Microsoft’s offer was “too low” while Midway won’t give them “a lot of value” after trimming the fat out of the company.
We had a letter of intent to buy Square. In early November 1999, we went to Japan. We had one of those big dinners with their CEO and Steve Ballmer. The next day, we’re sitting in their boardroom, and they said, ‘Our banker would like to make a statement.’ And basically, the banker said, ‘Square cannot go through with this deal because the price is too low.’ We packed up, we went home, and that was the end of Square.”
“We were talking to Midway about acquiring them. They were very serious about wanting to be acquired, but we couldn’t figure out how to make it work because we’d mmediately get them out of the PlayStation business, and we didn’t need their sales and marketing group, and so that left us with not a lot of value.”
After a heated internal meeting called ‘Valentine’s Day Massacre’ (The Xbox 360 Uncloaked book by Dean Takahashi went into this a bit as well if you want more details), the Xbox team finally had their break when Bungie, the maker of the widely popular Halo series, was open to a deal since it was in financial difficulties. As we all know, it ends up as a massive hit and practically carried the Xbox name to this day.
Although at the time of the buy-out other parties were not convinced, including Midway CEO Neil Nicastro who sent a voicemail saying that they were “the dumbest people in the industry” or even Microsoft Japan who was convinced that “as an immutable law of physics, first-person games don’t do well on console.”
Aside from acquisition attempts, Microsoft also approached other developers for exclusives. Which went much more swimmingly. Todd Howard of Bethesda was convinced once he and his team saw the full specification of the console. He claimed that the hard drive and memory “was a major step up from the PS2”, leading to the console release of Elder Scrolls III: Morrowind. Tomonobu Itagaki creator of the Ninja Gaiden series decided to support the Xbox as well after discussing the technical specifications with the legendary Seamus Blackley, the project’s technology officer. Meanwhile, other Xbox team’s meetings with third-parties had hysterical moments, recalled first Xbox head Rick Thompson.
I flew to Japan to meet with a Konami executive. Everybody warned me this guy is a massive drinker. We had a translator because he didn’t speak a word of English, and in the span of a night, we drank an entire case of Asahi tall beers and a bottle of Courvoisier shots. At 4 o’clock in the morning, I make it back to my hotel. I show up at our 9 o’clock meeting. The executive shows up. Nobody else does. The translator was never seen again. The Konami guy just reaches his hand out across the table, shakes my hand and leaves, like, “Deal. I’m in.”
The whole of Bloomberg’s report is definitely a blast if you’re interested in reading how Xbox came to be and about video game history in general. Otherwise, what are your thoughts on Microsoft trying to acquire Nintendo? Let us know in the comments below!