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Discussion Market consolidation: where does Nintendo stand?

Yeah, important to remember that Microsoft aren't just buying studios, they're buying intellectual property and franchises with those studios. That isn't an option for many of the small studios Nintendo work with, because they usually work on Nintendo owned IP, or they share ownership of IP with Nintendo. Whether it's Game Freak or Grezzo or Intelligent Systems or Camelot, they're less attractive to other publishers like Microsoft because they're small fish which don't even come with any enticing franchises or IP. Part of why Microsoft bought Zenimax and Activision is to solve the chief (no pun intended) problem they had versus Nintendo and Sony: building and nurturing a compelling array of different franchises.

When it comes to the bigger publishers in Japan, who would absolutely be more appealing to Microsoft from the perspective of IP ownership, you can bet Nintendo and the Japanese government would make any foreign or domestic takeover very difficult. As I've said, Nintendo already have shares in a number of the bigger publishers and would increase their share in the event of a possible takeover, especially if it concerned Koei-Tecmo or Bamco, for example.
 
Belinda Blumenthal said:
This seems conspiracy theory-esque, what use would Microsoft have of studios like Grezzo? They already have so many teams and Grezzo has no IP.
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Microsoft has already bought up some studios in the past five years without particularly notable i.p. to them.
E.g.:
en.wikipedia.org

Compulsion Games - Wikipedia

en.wikipedia.org en.wikipedia.org
en.wikipedia.org

inXile Entertainment - Wikipedia

en.wikipedia.org en.wikipedia.org

Are particular examples of this because they hadn't had exclusive MS working agreements or anything prior to the purchases on top of not really being big owners of classic i.p.
(Obviously they're incomparable to this or Bethesda, which both made headlines everywhere for self explanatory reasons.)

Microsoft are literally in the business of buying up competitors to force themselves in to be prominent in an industry, in any case. This isn't the first time they've done it, and it won't be the last.

At some point they'll definitely take an interest in pilfering Nintendos segment of the market too, and they'd have to be fools to not preemptively try and work that off (which doesn't mean acquisitions by Nintendo necessarily!)
 
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Mister Gideon said:
It’s unlikely that either Bethesda or Activision-Blizzard would have released anything which would have skipped Microsoft’s platforms in the foreseeable future, had they not been acquired by Microsoft. Even if Sony started trying to moneyhat the likes of CoD, Microsoft could have secured it with a tiny, tiny fraction of what they’ve just spent. It doesn’t seem like their focus with these acquisitions is to strengthen their own brand, but to weaken others.

Edit: not that I’m saying they might be looking to buy the likes of Grezzo.
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Don’t discount King in all of this. I don’t think it’s coincidence the deal is 5.5x what Take Two is offering Zynga
 
The other point to make is: this deal might not even make it passed regulators. Yes, regulators allowed Disney to purchase Fox, but that was primarily viewed as an entertainment issue. Regulators in the US and EU are keeping an increasingly close eye on 'Big Tech', which Microsoft falls under. Now, Microsoft might argue this acquisition is an entertainment acquisition, but they've already brought up what a boon Activision will be as Microsoft begins to push towards their own 'metaverse'.

This acquisition is at the intersection of Big Tech and entertainment, which means there's a higher chance US and EU regulators pay close attention to it and potentially even scupper it. There's a long way to go before the deal closes, whichever way things end.
 
It's naive to dismiss the possibility that the current acquisition-heavy climate will negatively affect Nintendo in the mid to long term but the most recent moves (Zynga, ABK etc.) do not, at least not directly. Most of Nintendo's success still rides on their own games and that isn't going to change any time soon. It will become a problem once someone makes a move on their large development partners, most notably Bandai Namco and Koei Tecmo. I suspect this is part of the reason why Nintendo is preparing to invest a lot into expanding their own development capabilities: So they can be less reliant on these external studios. Their internal teams are still responsible for most of their most successful IPs and ideas so it makes a lot of sense to strengthen them in various ways. I think we're going to see more of what is already happening: More internal expansion and stronger co-development efforts between their own teams and partners like Game Freak, HAL and IntSys.

As for mergers and acquisitions, I don't really think they're interested in anything even approaching the scale of what we're currently seeing from these other corporations. Fiendcode posted this list on Install Base when Zynga was acquired (Market caps in $):

Activision: 49.88B
EA: 37.27B
Take-Two: 18.98B
Embracer: 10.56B
Ubisoft: 5.35B

Bandai Namco: 16.35B
Konami: 6.57B
Koei Tecmo: 6.31B
Square Enix: 6.26B
Capcom: 4.75B
Sega Sammy: 3.67B

Nintendo: 54.53B
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Activision is obviously out. EA and Take-Two after the latter gets Zynga will be too expensive. I don't think the owners of Embracer and Ubisoft want to sell and they'd be too unwieldy anyway (12k and 18k employees in several locations respectively, compared to Nintendo's ~6500). This takes the first half of this list out of the equation.

As for the Japanese companies, there's probably a combination of the owners not wanting to sell and/or the cost outstripping the benefits. It's not like Nintendo can drop a cool 5~10 billy just to buy a publisher if that money can be put to better use. Does it make sense to spend this much on a company like Koei Tecmo which has no notable IPs?

Some of them also have ancillary businesses that Nintendo has most likely no interest in and would have to be divested. Not sure what the current numbers are but almost half of Konami's work force used to be employed in their Sports subsidiary which operates fitness clubs. Sega Sammy could be interesting but what do you do with the PC business? etc. Bandai Namco has been leveled as a potential merging partner but it would take some time to align all the various branches. If Nintendo wants to get into toys and merchandising in a big way, this would definitely be the way to do so. They're also quite big though.

Investing more in Japan might also be a bit overkill when they're the de facto market leader in the console business with no sign of that changing. I actually think that Capcom would be the publisher with the best cost-benefit ratio for that reason: Resident Evil and Monster Hunter are very successful series that Nintendo fans have a lot of affinity for and they're both popular in the West where Nintendo has a (comparatively) weaker foothold. Add to that Street Fighter and the rest of their deep library. But again, not seeing the Tsujimotos being particularly interested in this.

I still think we're very far away from large M&As becoming a necessity for Nintendo but I'm less certain than I was just a few days ago. In the last two weeks we saw the two largest gaming acquisitions ever. Microsoft is spending more on ABK than Nintendo's current market cap. It feels like nothing is completely off the table right now. Question is, how fast does Nintendo have to act? What has to be done through acquisitions vs. organic growth?
 
I think that regardless of what's happening in the industry Nintendo hasn't expanded as much as would have been healthy over the past decade. They're currently greatly benefitting from their ability to rerelease Wii U games that are practically new to the masses, but at Nintendo's current output I think it'll become a challenge to fill the inevitable gaps in the software schedule of Switch's successor.

I don't think that purchasing a publisher is something that would be at all a good fit for Nintendo - I can't really think of any publisher with a compatible profile and that's really a must - but I'd like to see them establishing new studios (and maybe acquire two or three) to gain a more stable footing. It'd be nice to see more western studios as well, considering Nintendo has barely any development presence outside of Japan.
 
wrowa said:
I think that regardless of what's happening in the industry Nintendo hasn't expanded as much as would have been healthy over the past decade. They're currently greatly benefitting from their ability to rerelease Wii U games that are practically new to the masses, but at Nintendo's current output I think it'll become a challenge to fill the inevitable gaps in the software schedule of Switch's successor.

I don't think that purchasing a publisher is something that would be at all a good fit for Nintendo - I can't really think of any publisher with a compatible profile and that's really a must - but I'd like to see them establishing new studios (and maybe acquire two or three) to gain a more stable footing. It'd be nice to see more western studios as well, considering Nintendo has barely any development presence outside of Japan.
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Ehh, Nintendo hasn't released a Wii U port since last February(?) and doesn't have any announced at this point. We're already past the point they were needed to bolster the lineup.
 
Maybe it's the yakuza connections, but Nintendo has always seemed like a backroom deal kinda company. It's the reason they bizarrely don't own GameFreak....but everyone knows and understands who owns GameFreak.

I expect them to continue doing whatever facilitates these relationships with Japanese developers, and then to leverage their dominant position in Japan for western support. This strategy does not require acquisitions to succeed.
 
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I don't agree with others who've said that Nintendo can survive on its own, even if third parties get bought by Microsoft or Sony.

Nintendo can't fill the library of their hardware with only their own software output. They have the quality, sure, but not the quantity. If they didn't have their development partners (not counting long time partners such as IS and GF) this gen, they would have many software droughts imo. Also take out all the Wii U ports they've relied on and I think they would have struggled to keep momentum. Koei Tecmo for example has been important for many years now, whether it's with Fire Emblem or exclusive Musou games, Fatal Frame, or even Other M. Heck, Nintendo relies on others for some of their biggest IP with Smash, they've never had an internal studio responsible for developing that.

We've seen how important Platinum has been since last gen with Bayonetta and a new first party IP in Astral Chain (and I'm not even counting Wonderful 101). They even helped with Starfox Zero.

We're also seeing their own studios sometimes not being able to work on their own games as often, see how much Retro and Monolith Soft have been helping other studios getting games done. It reduces the amount of software they can release, it could be a problem in the future if they don't have third party partners to rely on.

That said, Nintendo doesn't need to make acquisitions. They also don't care to. As long as the games release on their systems and they can partner up with third parties, they won't need or care to buy anyone.

Also, what they need isn't IPs, it's manpower. Even if they end up buying someone, they will need the talent who can work on their IP as well.

We're seeing Nintendo (is going to) investing a lot in expanding their business. The new building they're building and renting new space. Organic growth is the best way to go, create new jobs and attracting new talent that will adopt their philosophy. It is a long term strategy though, but they also need to be quick to react in any change in the market.

We cannot rule out that either Microsoft or Sony isn't going to make a move on Japanese studios. If Nintendo can prevent studios from being bought, that would be great. If it's inevitable that a studio gets bought, of course I'd rather have Nintendo being the buyer. But I don't think they can go toe to toe in a bidding war with MS or Sony.
 
It's understandable that everyone has a knee-jerk reaction to the acquisition news, but there's really not much to worry about for Nintendo in the short and medium term. While Nintendo is currently enjoying the best 3rd party support since SNES probably, majority of them aren't from Western AAA devs/pubs, which MS recently acquired with Bethesda and Activision.

For Nintendo, as long as the Japanese 3rd party remains 3rd party, then it's all about strengthening the relationships with them. It's not like they are easily bought anyway. And keeping the stream of mid-tier games from different sources in the lineup, whether it's from the likes of SE or from indies. Keeping the unique experience in your platform goes a long way, and that has been their strength that let them endured decades of different competition.
 
LonkFromPA said:
Just echoing what some of you have said. Nintendo is focused on internal growth and fostering creativity amongst its teams. Microsoft is brute forcing themselves into gaming by purchasing studios instead of developing a team of their own and creating new IP. It is quite sad, frankly.
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MS is doing both. They created The Initiative for that. And some of their studios (the ones they already set up 5 years ago) are reportedly working on new stuff.
 
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pastry knife said:
Didn't they buy Next Level a while ago?
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That's because they were looking to sell. If Nintendo didn't buy them, someone else would have. And chances are that meant they wouldn't develop for Nintendo again, which Nintendo of course didn't want. That's why they bought them, because they would lose them otherwise.

And I think this is the only reason you'll see Nintendo buy a studio in the foreseeable future.
 
Mister Gideon said:
It’s unlikely that either Bethesda or Activision-Blizzard would have released anything which would have skipped Microsoft’s platforms in the foreseeable future, had they not been acquired by Microsoft. Even if Sony started trying to moneyhat the likes of CoD, Microsoft could have secured it with a tiny, tiny fraction of what they’ve just spent. It doesn’t seem like their focus with these acquisitions is to strengthen their own brand, but to weaken others.

Edit: not that I’m saying they might be looking to buy the likes of Grezzo.
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We know the primary concern from MS was Amazon/Google/Facebook simply swooping in and doing the same. Those are the companies they're actually watching for.
 
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If Microsoft or Sony tried to encroach on some of Nintendo's Japanese partners, maybe they'd try to protect them

Until then, nada
 
In the same position two days ago; looking at Microsoft and Sony fighting each other for every inch they have, while keeping an eye on their own eco system and thinking; where we do go from here?

At the end of the day, Nintendo will just walk its own path and if they come across a bargain or a nice oppertunity they will have a look. For everything else, they will keep bolstering their own development studios (as they are currently doing), thinking of partnerships and what not. I can imagine Nintendo looking into buting more shares of the traditional Japanese third parties and have some influence on the future path these publishers will take.
 
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Well, it pays off that Nintendo goes there own way. No Activision- Blizzard or Bezhesda Games on Switch sucks though. So just bring on a Gamrpass- Lite on Switch. Make MS First Party Titles available on this way. Problem solved.

Also Nintendo is investing to speed up first party output. Also make more Outsourcing- Projects. And its tine for Nintendo Retro Pass with all there legacy - content available.

So they are not in a bad position after all. Also just buy Capcom before someone else does it. Thanx
 
Rainbow said:
Well, it pays off that Nintendo goes there own way. No Activision- Blizzard or Bezhesda Games on Switch sucks though. So just bring on a Gamrpass- Lite on Switch. Make MS First Party Titles available on this way. Problem solved.
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Nintendo wants this less than anything in the world short of a hostile takeover by Facebook or World War 3
 
Nintendo are heading towards being a multimedia company that leverages its highly recognisable and desireable IPs towards multiple markets, with video games as the core. If this transition is a success, I think they can weather the storm of industry consolidation.

Put it this way, they'll only make a move to secure studios and publishers if it absolutely 100% makes sense to do so, like Next Level Games. I think they still subscribe to the idea that they would prefer to develop their own studios and talent, than buy someone out and hope that talent sticks around. The issue of course is whether they have the resources to provide a good stream of games for their own ecosystem if third parties abandon the system due to ownership issues, as opposed to by choice.
 
Kano said:
the companies that MS bought and would buy are not those significant to nintendo's third party support
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I somewhat disagree...
They may not have been massive money makers for them but it sure helped their "image" or the perception of what games you could expect to get.

Doom 2016 and Doom Eternal for example ... Just the fact that they exist on Switch or even more generally a Nintendo platform I think did great things for public perception of what is possible on the platform.
(even if they were slightly blurry)
 
Nintendo seems to be going more into the direction of Disney to become an entertainment media company. Their IPs are some of the strongest on the planet and if they expand more towards stuff like theme parks, mobile, movies and TV they're going to do just fine. Same with Sony. Gaming is just one of their footholds and their Brandpower is still insanely strong even in fields were they lost a lot of ground like TVs.
That's before you look at their Movie and Music business
 
Nintendo is pretty much exactly where they were before. At worst they're losing a few minor ports, nothing serious

As long as companies like Bandai Namco and Capcom aren't aren't bought out (I doubt they will) then we good
 
Guaraná said:
Microsoft is buying everyone and everything. Their game division is now the third gaming company in the world (bigger than Nintendo). Sony, although not nearly as aggressive as MS, is also investing in acquisitions, like Bluepoint last year and Insomniac back in 2020.

So I have two questions:
  • where does Nintendo stand regarding acquisitions?
  • where does Nintendo stand regarding once third-party games that are now probably exclusives?
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  • I'm not Nintendo, but they probably don't need to do any acquisitions at the moment.
  • I think that largely depends on the Microsoft-Nintendo relations.
 
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It's not as immediately problematic as it is for Sony, but the arms race going on over acquisitions and exclusive contracts, first party or otherwise, certainly presents hazards for Nintendo. So much of their software is developed by studios they don't wholly own, I think it leaves them vulnerable to having the rug pulled out from under them so to speak, or simply being choked out of resources. Particularly when you have massive companies outside of the industry like Apple, Amazon, etc., also looking for developers and resources.

It's not just a concern of buyouts, many publishers(Sony included) continue to look to expand their software offerings by contracting outside studios for either support or full development of games, so Nintendo could find that some of their partners take deals elsewhere.

Growing organically is very nice of course, but with Nintendo being so heavily concentrated in Japan, a country that has had labor shortages for quite some time now, I think it's going to be difficult for them to grow at the rate they probably need to with so many other developers/publishers vying for the same recruits in Japan.
 
I think you only see Nintendo start to make moves the closer the acquisitions get to Nintendo's turf. I think they watch the west consolidate and refrain from involvement, but if and when their closer Japanese business partners potentially start getting eyed over, then they may feel the fire under them a little more. Not to say they'll go acquisition crazy, but lose a couple close partners like KT or Namco or Capcom and they may eventually intercede just to mitigate further isolation.

Of course there are many hypotheticals here. As it stands in the immediate future, the only likely acquisitions will probably be NLG, buy-them-or-lose-them style.
 
I strongly disagree with the idea that Bethesda and Activision weren't important third parties for Switch support.

Bethesda brought Skyrim, Doom, Doom Eternal, Wolfenstein II.
Activision brought Overwatch, Diablo II, Diablo III, Tony Hawk 1+2, Crash N'Sane Trilogy, Crash Bandicoot 4, Crash Team Racing, Spyro the Dragon trilogy,

In fact, it's been mostly Square Enix, Bethesda and Activision who have kept Switch's third party support afloat.
 
Instro said:
It's not as immediately problematic as it is for Sony, but the arms race going on over acquisitions and exclusive contracts, first party or otherwise, certainly presents hazards for Nintendo. So much of their software is developed by studios they don't wholly own, I think it leaves them vulnerable to having the rug pulled out from under them so to speak, or simply being choked out of resources. Particularly when you have massive companies outside of the industry like Apple, Amazon, etc., also looking for developers and resources.

It's not just a concern of buyouts, many publishers(Sony included) continue to look to expand their software offerings by contracting outside studios for either support or full development of games, so Nintendo could find that some of their partners take deals elsewhere.

Growing organically is very nice of course, but with Nintendo being so heavily concentrated in Japan, a country that has had labor shortages for quite some time now, I think it's going to be difficult for them to grow at the rate they probably need to with so many other developers/publishers vying for the same recruits in Japan.
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In terms of their internal recruitment Nintendo shouldn't have any issues. They give above average compensation, and are considered one of the most desirable companies to work for in Japan. They're desireable enough that they can be very selective in who they hire.

A lot of the issues of labour shortages for developers in Japan has been in relation to finding developers experienced in and willing to work on AAA projects that aren't very popular in Japan, which is much less of an issue for Nintendo.
 
Keep in mind that when Nintendo makes a M&A purchase; they do it to secure the staff. Development staff that understand and integrate into Nintendo's development culture is all they are interested in; not external IP. Nintendo already have more IP than they can even cope with, they are NOT in the market to buy more IP.

They will do M&A to lock down mission critical partners if necessary; and will only consider M&A for external studios if they can guarantee that the external development staff will integrate and will not just up and leave.

Nintendo's biggest problem ever since the HD era started is manpower; not a lack of IP. Nintendo have gone out of their way to avoid the massive explosion in company size & development team sizes that literally everyone else did; because they desperately do not want to ruin their internal development culture. This is why they moved over to a model of collaborative development back in 2013, where they outsource their art asset production to external studios and keep their internal team sizes reletively small. So long as Nintendo can maintain their development culture, while continuing to improve their production capacity unabated, they will be fine.
 
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Seeing as Nintendo is putting 900M into internal development expansion in part due to the large success of Switch, I think we can see that Nintendo is now aware that building themselves up is a necessity - something they should have put maybe a little more work into back when the Wii/DS were at their peak.

I think they will continue to work with smaller developers and build support around them project-by-project rather than buy out larger companies. As mentioned above, they acquire only when necessary. I mean, they let Alpha Dream and CING (or was it another one), both developers who had worked with Nintendo quite a bit, go bankrupt rather than acquire them. They likely took in a chunk of the staffers, though. In the case of Next Level, as mentioned above, they had a unique position of buying the company after a few really great sellers and large development teams already familiar with working and expanding with the company. It was a do-or-die scenario, and Nintendo doesn't have much internal devs (especially in Canada) to absorb the talent if they let NLG go.

Will they never acquire anyone else? No, they definitely will, but I'm not sure who they would even be looking for. Didn't they buy a small stake in DeNA and another mobile company in the last 5ish years (can't say they benefited THAT much from mobile though)?
 
Emily said:
I strongly disagree with the idea that Bethesda and Activision weren't important third parties for Switch support.

Bethesda brought Skyrim, Doom, Doom Eternal, Wolfenstein II.
Activision brought Overwatch, Diablo II, Diablo III, Tony Hawk 1+2, Crash N'Sane Trilogy, Crash Bandicoot 4, Crash Team Racing, Spyro the Dragon trilogy,

In fact, it's been mostly Square Enix, Bethesda and Activision who have kept Switch's third party support afloat.
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I think that's going a bit far given the breadth of third party support for Switch.
 
Sees the list of the 50 best selling games on Switch**

Not ONE games from Activision on that list, or even Bethesda.

LOL.

No need for Nintendo to even enter in a "Panic Buy mode". Nintendo will be fine.
 
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Nintendo only acquires developers. Because developers are the ones that actually make the games. What would they want with a publisher?
 
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Emily said:
I strongly disagree with the idea that Bethesda and Activision weren't important third parties for Switch support.

Bethesda brought Skyrim, Doom, Doom Eternal, Wolfenstein II.
Activision brought Overwatch, Diablo II, Diablo III, Tony Hawk 1+2, Crash N'Sane Trilogy, Crash Bandicoot 4, Crash Team Racing, Spyro the Dragon trilogy,

In fact, it's been mostly Square Enix, Bethesda and Activision who have kept Switch's third party support afloat.
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Yeah I so think it's overly dismissive to say they are not important for Nintendo. A lot of those games are/were very popular on the platform, and Skyrim was one of the early "big deal" games from western 3rd parties for the Switch. AB and Bethesda were arguably the most active western publishers on the Switch. They gave a lot of legitimacy to the platform that Nintendo had previously struggled to have, particularly with "core" gamers.
 
Are we assuming most of these ActiBlizz games won't see release on Switch? I would think at least for a while they will, since MS and Nintendo work together.

Longterm, I dunno, this industry can be hard to predict. Nintendoom isn't around the corner but a lot can change in 10-15 years. Nintendo has been a superpower in North America and Japan for 40 years though, and has been growing its foothold in Western Europe with the Switch. It will be interesting to see if they can expand more outside of those territories. I think eventually all their decision making and development being centralized in Japan might come back to bite them down the road though. If they can continue to position themselves as an "alternative" to PS/Xbox though they will probably manage just fine.
 
Mekanos said:
Are we assuming most of these ActiBlizz games won't see release on Switch? I would think at least for a while they will, since MS and Nintendo work together.
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Right, but that's amounted to things like Cuphead, Ori, and old Rare stuff, not exactly MS's new big titles. I think you're going to see the Activision/Blizzard stuff dry up going forward on Switch.
 
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Guaraná said:
Microsoft is buying everyone and everything. Their game division is now the third gaming company in the world (bigger than Nintendo). Sony, although not nearly as aggressive as MS, is also investing in acquisitions, like Bluepoint last year and Insomniac back in 2020.

So I have two questions:
  • where does Nintendo stand regarding acquisitions?
  • where does Nintendo stand regarding once third-party games that are now probably exclusives?
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It’s a non-issue to Nintendo. They themselves probably could care less. Call of duty a yearly 10-20 million seller isn’t on their console. This just means they need to give us more first party content.
 
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Instro said:
It's not as immediately problematic as it is for Sony, but the arms race going on over acquisitions and exclusive contracts, first party or otherwise, certainly presents hazards for Nintendo. So much of their software is developed by studios they don't wholly own, I think it leaves them vulnerable to having the rug pulled out from under them so to speak, or simply being choked out of resources. Particularly when you have massive companies outside of the industry like Apple, Amazon, etc., also looking for developers and resources.

It's not just a concern of buyouts, many publishers(Sony included) continue to look to expand their software offerings by contracting outside studios for either support or full development of games, so Nintendo could find that some of their partners take deals elsewhere.

Growing organically is very nice of course, but with Nintendo being so heavily concentrated in Japan, a country that has had labor shortages for quite some time now, I think it's going to be difficult for them to grow at the rate they probably need to with so many other developers/publishers vying for the same recruits in Japan.
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Instro nailed it.

In my opinion, the game industry will become more subscription-based in the future. As the game industry pivots to subscription services, it will spark an arms race over acquisitions and ownership rights to large content libraries. Everyone from Square Enix to Electronic Arts will be looking for acquisition targets so they can bolster their content offerings on subscription services.

Just like the TV-film industry (Netflix, Disney+, HBO Max, Paramount+).
Just like the music industry (Spotify, Apple Music, Tidal).
Just like the book industry. (Kindle Unlimited, Apple Books+, Comixology Unlimited)
Game industry will be no different. (Xbox GamePass, Sony's upcoming service)

... Even Nintendo is starting to see the writing on the wall. Hence why they moved away from Virtual Console to a subscription service...
 
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Nintendo have at least been through paradigm shifts in this industry before and know how easy it is to lose developer support and how difficult it is to then regain that. But I do think Oregano brought up a valuable point before that, even while mergers and acquisitions are compounding on top of one another, smaller and middle sized development, as well as development assistance studios, are also proliferating as the global games industry continues to grow.

In the last few years we've seen Nintendo expand their co-operation with Koei-Tecmo, establish a good working relationship with MercurySteam, partner with Mages, and now partner with WayForward. Less directly, the indie boom has also been a real boon for Nintendo because it provides Switch owners with masses of genre and game variety even while some traditional publishers drag their feet or while some high profile games continue to skip Switch.

I think we shouldn't lose sight of the fact that Switch has literally thousands of games on it and that this is something Nintendo has allowed and encouraged; they know the battle is one of content, how much you have, how often you have it, how frequently it arrives. They've learnt painful lessons about that with past systems. They do also clearly know that subscriptions are going to form a big part of the future, even if they aim to preserve the software purchasing model (which they clearly will attempt - and while subs have become more and more prevalent, we should also be aware that the precise implications and effects will vary from industry to industry).

Personally from my perspective there's no doubt Nintendo will be effected by this, but that is only going to be something which is readily apparent in the medium and long term. For the short term their business model and platform is strong, which gives them time to continue to adapt for the future, and to attempt to shape that future to their advantage.
 
MisterSpo said:
Yeah, important to remember that Microsoft aren't just buying studios, they're buying intellectual property and franchises with those studios. That isn't an option for many of the small studios Nintendo work with, because they usually work on Nintendo owned IP, or they share ownership of IP with Nintendo. Whether it's Game Freak or Grezzo or Intelligent Systems or Camelot, they're less attractive to other publishers like Microsoft because they're small fish which don't even come with any enticing franchises or IP.
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Yup, and this is why the loss of Rare hurt.

You weren't just simply losing a studio. You were losing all of the intellectual properties and characters that studio developed.
 
Not that I deny Bethesda's and ABK's importance for the Switch but I'm not really sure what the implication here is when there's no replacement for them out there except for GTA which also might not happen for various reasons.
 
Emily said:
Yup, and this is why the loss of Rare hurt.

You weren't just simply losing a studio. You were losing all of the intellectual properties and characters that studio developed.
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Rare were already falling apart by the time that Microsoft bought them; both Free Radical and Zoonami were already up and running, while plenty more of Rare's best and brightest were eyeing an exit (most importantly of all, the Stampers themselves; who wanted to retire).

That was the reason why Nintendo didn't choose to purchase the remaining 51% of Rare. They wanted the staff, and they knew that they wouldn't be able to keep them at Rare (plus they already headhunted a few themselves, including Martin Hollis).
 
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The other point we shouldn't lose sight of is that this acquisition is aimed much more broadly across the entertainment and technology sector and not just at the rather large and profitable niche of console gaming. Nintendo and Sony outcompete Microsoft in console gaming, but acquiring Activision and Blizzard and King has implications for a bunch of areas (like cloud services and the 'metaverse' which Nintendo may steer clear of) that Microsoft are aiming to compete in against Amazon, Google, Apple, Facebook etc.

Console gaming and Nintendo obviously won't be immune from that, but they also don't need to attempt to dominate those spaces the way that Microsoft are attempting with their large acquisitions. Nintendo themselves also clearly have broader ambitions than the console space, even while their ultimate aim right now is to use their broader efforts to reinforce their console business.
 
MisterSpo said:
Nintendo have at least been through paradigm shifts in this industry before and know how easy it is to lose developer support and how difficult it is to then regain that. But I do think Oregano brought up a valuable point before that, even while mergers and acquisitions are compounding on top of one another, smaller and middle sized development, as well as development assistance studios, are also proliferating as the global games industry continues to grow.

In the last few years we've seen Nintendo expand their co-operation with Koei-Tecmo, establish a good working relationship with MercurySteam, partner with Mages, and now partner with WayForward. Less directly, the indie boom has also been a real boon for Nintendo because it provides Switch owners with masses of genre and game variety even while some traditional publishers drag their feet or while some high profile games continue to skip Switch.

I think we shouldn't lose sight of the fact that Switch has literally thousands of games on it and that this is something Nintendo has allowed and encouraged; they know the battle is one of content, how much you have, how often you have it, how frequently it arrives. They've learnt painful lessons about that with past systems. They do also clearly know that subscriptions are going to form a big part of the future, even if they aim to preserve the software purchasing model (which they clearly will attempt - and while subs have become more and more prevalent, we should also be aware that the precise implications and effects will vary from industry to industry).

Personally from my perspective there's no doubt Nintendo will be effected by this, but that is only going to be something which is readily apparent in the medium and long term. For the short term their business model and platform is strong, which gives them time to continue to adapt for the future, and to attempt to shape that future to their advantage.
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We both forgot the most important first time collaboration: Toybox on DC Super Hero Girls.

I do think it's somewhat easy to lose sight of how vast the industry is, even though consolidation is definitely happening at every level. Even if you look at the Japanese support for Switch a lot of games have come from companies like Rocket Company, Neos, GungHo, Nippon Columbia or DMM that aren't necessarily on anyone's(meaning people online) radar.
 
Emily said:
Yup, and this is why the loss of Rare hurt.

You weren't just simply losing a studio. You were losing all of the intellectual properties and characters that studio developed.
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The Rare situation is pretty unique and I wonder sometimes if modern Nintendo with their current content strategy would have let them go. Historically speaking, they haven't cared as much about the IP as they have for the people making the games. But they never had to because they usually retained the IP rights anyway. With Rare they lost Banjo, Perfect Dark, Killer Instinct, Conker etc. as well as character rights that have (apparently) made rereleases of older games a bit of a nightmare. We obviously have no way of knowing if those IPs would have retained their value over the years but I think it's pretty clear that IP has become extremely important for everyone including Nintendo.
 
I think a Eurogamer piece on Rare from a few years ago suggested one reason Nintendo were willing to sell their stake in Rare was because of the departure of key people at Rare who had a good working relationship with Nintendo.

But certainly the IP angle is interesting. I don't think Nintendo would give it up these days, even if it feels like the biggest problem they have is that there aren't quite enough resources to make the most of all the IP they already own.
 
If I have to hear the word “metaverse” one more time…

To the Rare discussion, Nintendo didn’t buy Rare because Yamauchi thought the Stamper brothers grossly overvalued the studio (which they did, let’s be clear, but MS was willing to over-pay to get a big “win” at the beginnings of their console business)

Anyways, it’s important to realize that Microsoft’s current acquisitions are synergistic; they learned their lesson with Rare, it seems, who needed significant restructuring to get to where they are now. Bethesda software likely sells incredibly well on Xbox relative to PlayStation hardware. Likewise for CoD and the like over at Activision Blizzard (plus strong performers in the mobile space). Can the same be said of Final Fantasy? Monster Hunter World only sold about 1.7 million on Xbox as of 2020 (though the PC sales might be enticing). The value add to the customers who buy an Xbox is minimal in comparison to Microsoft’s recent deals.

Additionally, there are talent bleed concerns. Bethesda’s workforce doesn’t seem too phased about the change of ownership over their creative output so far. And ANY management would likely be preferable to the ones currently at Activision Blizzard, so I don’t expect much talent flight there (and any that do might be fleeing for the reasons we’d want to see, if you catch my drift). The same would likely not be said of Capcom, Square Enix, Bandai Namco, etc. and many would flee to other areas of the industry or retire.

There’s a reason Nintendo is wary of this wrt acquisitions, that such acquisitions should be done with the talent pool on board. NLG was like that, Monolith Soft was like that, any further acquisition would be like this. If Microsoft starts trolling around for Japanese developers and publishers, it may motivate these companies to think on who they’d rather be reporting to and motivate the executives AND talent pool to prefer ownership by Nintendo (or Sony, for that matter, but we’ll see about that in the long run) and prime the pump for Nintendo to entertain larger M&As with their conditions already met or drive talent fleeing an M&A willingly into Nintendo’s open arms. Microsoft coming into Japan for M&As will undoubtedly spook the horses and lead to an absolute negative outcome that would scuttle any potential benefit.

So Nintendo stands where it always has… for now. As the situation evolves, new opportunities may come to light, though.
 
If the Rare situation was happening right now Nintendo would put up a MUCH bigger fight for them than they did back in 2001. In the past twenty years the value of simply owning IPs has gone up dramatically, and Nintendo would definitely have wanted Banjo, Perfect Dark et al kept on their own closed system. Different time though, with different circumstances and different priorities. I personally would have preferred Rare to have stayed with Nintendo and sometimes ponder the games that could have been had they stayed, but water under the bridge now.

Mekanos said:
Are we assuming most of these ActiBlizz games won't see release on Switch? I would think at least for a while they will, since MS and Nintendo work together.
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I've said in the main thread that I expect any games ActiBlizz have in development which are currently announced for Switch will be honoured (which is basically only Overwatch 2 off the top of my head), but from now on any brand new games they develop will be Xbox/PC exclusive.
 
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