Microsoft has purchased Rare Ltd., the development house
behind such titles as Banjo-Kazooie, GoldenEye and the upcoming Star Fox Adventures.
Nintendo previously held a 49 percent interest in Rare, but announced it had sold
that ownership position Friday.

“We sold our position back to Rare and then they sold the entire company
to Microsoft,” said George Harrison, senior vice president of marketing
and corporate communications for Nintendo of America.

Microsoft, which has not announced the deal, refused to comment. Industry analysts
estimate the price of the deal was likely between $400 million and $500 million
dollars. . .

Nintendo will retain exclusive rights for most original properties and franchises
featured in games developed by Rare, including Donkey Kong, Diddy Kong and Star
Fox. Rare, though, will retain rights to the characters it created independently,
including the "Perfect Dark," "Conker"
and "Banjo-Kazooie" franchises. "Perfect
Dark" sold more than 1 million copies (earning more than $55 million),
and will likely make its way to the Xbox. Banjo-Kazooie and Conker
games are also likely.

The addition of Rare to Microsoft’s collection of internal developers could
be a big boost to the Xbox. The developer is very well regarded in the gaming
world and its titles are typically big sellers. Microsoft, meanwhile, has been
criticized for its lack of ‘must-have’ games for the Xbox. [
XboxSolution Commentary: WHAT? Not any more!]

Nintendo, which declined to discuss the sale price of its share of Rare, had
an option to purchase the rest of the developer last fall, but decided against
it, believing that the price was too high.

"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."

Rare’s last title with Nintendo will be "Star Fox Adventures," which
is due to be released in the United States next week. Harrison, though, said
that will hardly be the end of that franchise or others Rare has worked on historically.

"We actually have a new Star Fox game under way," he said. "We
have Namco developing that in Japan. … It is a GameCube game. My understanding
is it will come out in the second half of 2003. And we’re going to be getting
started on our own Donkey Kong product internally."

Feel free to discuss the ramifications of this deal in our Forums.

Source: CNN Money

Filed under: News

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