Nintendo claims a chunk of Bandai

Apparently big is better. At least that's the likely reasoning at Nintendo, which confirmed it had previously bought a massive chunk of stock in Bandai, Japan's biggest toymaker and one of its biggest game publishers. According to a Reuters dispatch today, the GameCube maker had acquire 2.6 percent of the Tamagotchi manufacturer's shares by the end of last month. That's a big purchase, considering that Nintendo didn't own a single Bandai share as of March 2003.

Shares in Bandai were up 4.59 percent to 2,850 yen ($26) at day's end in Tokyo, while Nintendo's shares fell 3.43 percent to 8,720 yen ($80).

There was much furor online today as a Japanese tabloid printed a story claiming that Nintendo is moving ahead with a plan to acquire Bandai, citing the stock purchase completed at the end of September as proof. Though this purchase made Nintendo one of Bandai's ten largest shareholders, today both companies denied that a merger is in the works.

Nonetheless, the story provoked a flurry of online chatter, as game site forum posts expressed concern that Bandai games would no longer be released for other platforms.

The denials from both companies calmed the storm, and one surfer offered this interpretation of Nintendo's stock purchase: "They're probably just trying to build a closer relationship with Bandai," he wrote, pointing out that while obviously Nintendo stands to gain from such a relationship, Bandai would also benefit, as access to Nintendo's stable of characters would be quite lucrative for the company's character merchandising business.

Bandai was established in 1950 as a toy manufacturer. Since then, the company has grown substantially and now has some 30 subsidiaries, with a product line that includes games and anime.