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Microsoft tried to buy Nintendo, EA, and Square Enix before starting Xbox


The original Xbox had an interesting inception (pic: Microsoft)

It seems buying a company the size of Bethesda is not a new concept for Microsoft, although apparently Nintendo just laughed the idea off.

As the fourth largest company in the world, with a market capitalisation of $1.5 trillion, Microsoft could buy the whole video games industry several times over and barely blink, and it seems at various points in their history that’s exactly what they tried to do.

Their attempt to buy Nintendo back in the late nineties, before the launch of the original Xbox, has long been a part of video game folklore but a new Bloomberg article casts fresh light on not only that but offers to buy a number of other Japanese and American companies.

Obviously, none of them ever worked out but the revelations are especially interesting given Microsoft’s recent purchase of Bethesda for $7.5 billion, which suggests they’ve never really given up on their initial approach.

The whole Bloomberg article is worth a read, but in it former Xbox exec Kevin Bachus recalls how Nintendo ‘just laughed their asses off’ at the suggestion of Microsoft acquiring them. ‘Like, imagine an hour of somebody just laughing at you’, he says. ‘That was kind of how that meeting went.’

‘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’, adds former head of business development Bob McBreen.

‘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.’

That’s no surprise given his attitude, especially as the GameCube was more powerful than the PlayStation 2 and could often match the Xbox in terms of visuals.

Less well known attempts to acquire other major publishers include an approach to Square Enix in 1999, which didn’t work out because Square Enix execs deemed that Microsoft’s offer was too low.

Microsoft had no greater luck when it came to American companies though, with an attempt to buy Midway – the then owner of the Mortal Kombat franchise. That collapse of that deal was more due to Microsoft though, who eventually decided they weren’t worth the trouble.

The first company Microsoft tried to buy though is EA, who refused to support Xbox Live when it originally launched because of concerns over Microsoft’s ‘monopolistic tendencies’.

None of the execs explain why the acquisition attempts didn’t work though, with McBreen simply saying that EA’s answer was, ‘No, thanks’.

The article is fascinating not only in terms of the early history of the Xbox but also the way in which giant companies like Microsoft think and operate.

Their purchase of Bethesda was only the latest in a long line of recent video game acquisitions, which has raised fears that Microsoft will encourage its rivals to act similarly and reduce the games industry to just a few giant-sized companies that own almost everything between them.

Buying a new studio is always a risk though and even Microsoft’s most successful purchase to date, Halo creator Bungie, ended in failure, as Bungie broke away from Microsoft in 2007 to return to being an independent developer.

There’s since been rumours that Microsoft has tried to acquire them again though, so clearly Microsoft feels acquisitions are still worth it. Especially as they’ve indicated that they have plans to buy other major companies in the future…

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