Microsoft buys Rare

By David Becker, News.com
Posted Sep 23, 2002 12:40 pm PT

A Nintendo executive confirmed that Microsoft has acquired British game developer Rare.

Nintendo said in a statement that it has sold its 49 percent interest in Rare--developer of games based on popular Nintendo franchises such as Donkey Kong--but declined to name the buyer or price.

Peter MacDougall, executive vice president at Nintendo of America, confirmed to CNET News.com, however, that the sale was part of Microsoft's acquisition of Rare. "The entire company has been sold to Microsoft," he said.

Microsoft has not announced the Rare purchase, and a company representative declined to comment on the deal, which has been the subject of numerous reports estimating the buy at anywhere from $400 million to $540 million.

Schelley Olhava, an analyst for research firm IDC, said the type of family-friendly games Rare creates are exactly what Microsoft needs to broaden the appeal of the Xbox beyond hardcore gamers. They need to get into the mass market," she said. "Rare has a reputation for developing very solid, high-quality franchises, something that's been really lacking for the Xbox...Rare is very good at developing characters; they made Donkey Kong what it is today."

Nintendo minimized the effect of the sale, saying Rare-developed titles only accounted for 1.5 percent of Nintendo's worldwide software sales during the 2002 fiscal year. "Looking at the company's recent track record, it became clear that its value to the future of Nintendo would be limited," MacDougall said in the statement. "In other words, we passed on this opportunity for very good business reasons."

Nintendo said it will retain all rights to Rare franchises such as Donkey Kong, Star Fox, and Diddy Kong. "Those properties are still owned by Nintendo, and we will continue to make new games based on them," MacDougall told News.com.

P.J. McNealy, an analyst for research firm Gartner, said that will mean a delayed payoff for Microsoft. "It's a much less appealing deal for Microsoft without the Donkey Kong franchise," he said. "It makes it more of a long-term investment. It's possible the goal is really to build up a portfolio for the later years of the Xbox, when they're going to need to appeal to the kiddie market even more."

14 Comments

Refresh comments

mark_unix
Posted Jul 5, 2007 4:59 am PT

bummer for Microsoft they aren't getting any franchise...
- Login to rate this comment
aygol
Posted Jul 4, 2007 12:27 am PT

Yes! Go Microsoft!
- Login to rate this comment
Willy105
Posted Jul 3, 2007 5:27 pm PT

I miss Banjo-Threeie.
- Login to rate this comment
deityoflove
Posted Jan 15, 2007 4:06 pm PT

i like nintendo but this is one STUPID decision.... nintendo wasnt very wise about that decision.... now rare is making the only likable games for the xbox and 360 *just my opinion about the only good xbox games so dont get mad* it almost makes me buy a 360 just for kameo and banjo kazooie.... but one last thing.... they r making a diddy kong racing for the ds with rare making it.... that dosent make sense to me and will Rare let nintendo use Banjo kazooie and Tooie be able to play in the virtual console?
- Login to rate this comment
Cloud737
Posted Jan 3, 2007 4:32 am PT

Bad move for Nintendo in my opinion. Viva Pinata is such a great game, so it was a bad move for Nintendo to sale Rare.
I know that Rare games weren`t accounted for so much in the overall sales, but that`s because it didn`t produce original games anymore. They just milked some well established series. M$ made sure they did something original, and it paid off in the end.
- Login to rate this comment
Arcade_Legend
Posted Dec 22, 2006 3:40 pm PT

Perfect Dark Zero is a great Xbox 360 game developed by Rare.

Kameo: Elements of Power is a great Xbox 360 game developed by Rare.

Both of those games from Rare were Xbox 360 launch titles that Gamespot reviewed and scored higher than ANY Playstation 3 game!

Viva Piniata is also a great Xbox 360 game from Rare, and it was rated very high as well.
- Login to rate this comment
cpaschal
Posted Sep 21, 2006 8:41 am PT

That teaches you Nintendo? Name one good game the Rare has made for the Xbox...

Im waiting...

Still waiting...

Thats what I thought. Nintendo made more money by selling Rare than they would have brought in from Rare games for the next 10 years.

That teaches you Microsoft...thinking you can just go around and buy whatever you want to. HAHA
- Login to rate this comment
chicken008
Posted May 26, 2006 2:25 pm PT
- Login to rate this comment
cars50
Posted May 26, 2006 2:20 pm PT

Liek, Nintendo is ded!!!
- Login to rate this comment
solidgamer
Posted May 26, 2006 2:16 pm PT

really?
- Login to rate this comment
juanfraino
Posted May 26, 2006 2:15 pm PT

omfg!! i cant believe this!!!
- Login to rate this comment
rocklegacy2
Posted May 26, 2006 2:06 pm PT

Dear God!
- Login to rate this comment
k-diddy66
Posted May 22, 2006 7:34 am PT

that teaches you nintendo
- Login to rate this comment
ninten_fan
Posted May 12, 2006 3:19 pm PT

NOOOOOOOO!!
- Login to rate this comment

Hot Stories

Newsmakers

TGS 2008: Microsoft's Schappert soldiers on in Japan

Despite the Xbox 360's limited success, corporate VP and Xbox Live chief says sales are increasing in the "very important" market. Full Story
- Posted Oct 9, 2008 10:30 am PT
- 32 Comments
TGS 2008: Is Japan's gaming influence waning?

Executives from Square, Capcom, and Namco Bandai open up about how they feel their country is losing gaming clout--and how they think the Japanese game industry can turn itself around. Full Story
- Posted Oct 9, 2008 12:10 am PT
- 205 Comments

Featured Stories

Fallout 3 finally finished

Time for retailers to duck and cover because development has wrapped on Bethesda's postapocalyptic role-playing game in anticipation of its October 28 debut. Full Story
- Posted Oct 9, 2008 1:01 pm PT
- 351 Comments
Xbox 360 gets bundles of holiday joy

Microsoft adds Sega Superstars Tennis to $199 Arcade boxes, whereas standard $299 and Elite $399 systems will come packed with Lego Indy, Kung Fu Panda. Full Story
- Posted Oct 9, 2008 7:42 pm PT
- 121 Comments
Game stocks bloodied in market meltdown

Activision falls 28%, THQ sheds 39%, EA slides 37%, and Take-Two loses 40% during four-week roller-coaster ride on Wall Street, capped by today's sixth-straight triple-digit Dow Jones drop. Full Story
- Posted Oct 9, 2008 8:33 pm PT
- 224 Comments
TGS 2008: Tekken 6 smacking Xbox 360

Namco Bandai kicks off Tokyo Game Show with confirmation that long-awaited PS3 fighter will launch on rival console simultaneously in fall 2009. Full Story
- Posted Oct 8, 2008 9:00 pm PT
- 997 Comments
TGS 2008: Halo 3: Recon revealed, new Xbox Live due Nov. 19

Xbox Live chief John Schappert talks about Microsoft's Japan strategy; prequel expansion to Bungie's shooter due Fall 2009; avatar-based XBL relaunch coming next month; Tekken 6 confirmed for 360; trailer inside. Full Story
- Posted Oct 8, 2008 8:13 pm PT
- 298 Comments