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Discussion Market consolidation: where does Nintendo stand?

Guaraná

Guaraná

Paratroopa
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?
 
Nintendo owns Japan and the Handheld market. They have strong sales in Europe (example France).
I agree that the companies bought aren't relevant to some degree, with them supporting Nintendo occassionally at best. Wouldn't dust it off as non-significant though.
 
Raccoon said:
The problem with this is that Bandai Namco is huge, with a lot of business outside of video games. A merger would not be favorable to Nintendo.

I'm starting to wonder if we're doomed
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Bro we are doomed since 1889, i have expected that Nintendo was going third party years ago.
 
Raccoon said:
The problem with this is that Bandai Namco is huge, with a lot of business outside of video games. A merger would not be favorable to Nintendo.

I'm starting to wonder if we're doomed
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Worth keeping in mind that those other businesses were Bandai's and Nintendo was rumoured to be eying up a Bandai purchase in the early 2000s. Merchandising is also an area Nintendo wants to grow.

That said, they're not buying Bamco... that's just not the reason why.
 
Nintendo stands where always was standing, actually I think this MS aqusations could be good for Nintendo,
MS and Nintendo have very good relationship, so some other IPs could easier come to Nintendo platforms and that are not currently.

Sony Playstation like direct competition of Xbox is one that should be worried about this MS aqusations, not Nintendo.
 
i think the will try to acquire companies that are in the process of being sold and are meaningful partners. problems will surface only if companies like Sega o S-E will be eventually acquired by Sony or Ms.
 
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LukasManak22 said:
Bro we are doomed since 1889, i have expected that Nintendo was going third party years ago.
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What fools we were for 132 years. All the time we thought doom meant Nintendo going third party, when the true threat was Nintendo going first party ... to Microsoft.
 
Nintendo focuses on internal expansion rather than buying up studios, they've said that a bunch of times and the new building they're renting is also proof of that. They'd much rather partner up with studios than buy them, and it's worked way better for them.
 
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The sheer and overwhelming size of the acquistion means Nintendo may yet find their hand forced in some areas, especially if larger companies become interesting in buying up long-term partners in Japan. In that scenario, I don't think we'd see Nintendo immediately jump at large-scale or immediate acquisitions or mergers, but would instead simply up their stake in Bamco or Koei-Tecmo or whoever seemed to be the target of a takeover. Nintendo can make it difficult for other publishers or tech companies to buy the large Japanese publishers without actually pursuing mergers or acquisitions themselves. The status quo in Japan suits Nintendo, after all.

As for other independent companies, Nintendo would either prioritise long-term partners who might find themselves the target of a takeover, or they might targer partners who offer particular expertise Nintendo could make use of. In the former camp you have studios like Grezzo, Good-Feel, potentially Platinum, and Camelot Software Planning. In the former camp I'd argue you have a company like Velan Studios, who might be a good fit for Nintendo given their work on augmented reality games. Even in the event that Nintendo began to lose some of these development partners, or risked losing them to acquisitions, outright acquisition isn't the only move Nintendo could make - they would be more interested in the people within these companies (and the creative possibilities they offer) than owning the brand or studio itself. With Nintendo's resources, they could (as they did with NdCube) set up a new subisidiary to retain the talent and staffpower these independent companies bring to Nintendo's operations. It's not inconcievable in the future that Nintendo could set up studios to retain talent from a bunch of different places (not just the ones named above, but also from places like Ubisoft Milan or more likely Mercury Steam).

You can rule out Nintendo buying out HAL, Intelligent Systems, Game Freak, or Creatures Inc, because of shared IP ownership. In those cases, Nintendo don't need to do anything but likely keep doing what they've done with HAL and Game Freak (giving them new facilities and office space, and, if Monolith Soft's Kyoto support team are involved in Pokemon Legends, greater development assistance).

Finally, the most obvious move for Nintendo to make is the one they're currently making: expand internal development. EPD remains Nintendo's trump card, more often than not, and with two new facilities on the way in 2022 (leased space in a new building, and a new building on an existing Nintendo site in Kyoto), and with extra financial investment on the way, it seems clear Nintendo see the need to protect and expand internal development. We might also see additional investment make its way to wholly owned subsidiaries, too, which would be easier than finding studios to purchase.
Oregano said:
Worth keeping in mind that those other businesses were Bandai's and Nintendo was rumoured to be eying up a Bandai purchase in the early 2000s. Merchandising is also an area Nintendo wants to grow.

That said, they're not buying Bamco... that's just not the reason why.
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Yeah, you'd think if Nintendo desperately and aggressively wanted their characters front and centre right now they'd buy a company with media and toy production capabilities.
 
Sony is the one who will want to retaliate, Nintendo doesn't have to. Though i'm not sure on what kind of acquisition they're able to make right now, much less an acquisition as big as this.
 
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Much as they've acted for the last decade and a half, on their own island. They'll continue to not operate in ways that significantly respond to what the competition is doing, for better or worse. They won't make many major acquisitions because it's not their way. And they'll still succeed, especially here, because they don't need acquisitions to be successful. They provide experiences you can't get on other platforms.

The real question is what Sony will do in response to these. Because I have no idea if they even can respond to an ActiBlizzard buyout.
 
Kano said:
the companies that MS bought and would buy are not those significant to nintendo's third party support
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In a first approximation, that is what one would think. However, MS purchases will drive the adoption of its services up, which will attract more developers/publishers. It may take some time to manifest but the danger for the other console makers is real.
 
They can simple buy shares of the big japanese companies in order to evade that Sony or Microsoft buys any of them.
 
Losing Bethesda was probably a bigger loss for Nintendo overall, but the purchase of Activision is bound to even further accelerate the amount of M&A’s in the gaming space which I’m really not happy about in regards to the health and future of the industry. As for Nintendo, it’s not just the console makers Sony and Microsoft they have to watch out for, as companies like Tencent (who also has tons and tons of money), Embracer, and I think Netease have been on purchasing sprees. I think you have to wonder too, do other big companies like Disney, Apple, and Amazon consider jumping in. Those last three are likely no, but literally the most expensive gaming acquisition by far is going to draw attention.

So I guess to answer your question, I don’t think Nintendo rapidly shifts plans just yet, but they are probably readying strategies if another company that they work closer with gets purchased and removed from their platforms. These are the ones to watch: Bandai Namco, Tecmo Koei, Square Enix, Capcom, Sega, and Ubisoft. Basically everyone but Take Two and EA.

That’s just the near future though, I’m really curious and worried how many of those companies and the smaller ones will remain independent in five to ten years. The moment another big one falls, all bets are off. Regardless of any speculation, we should get answers soon as the next sharholder meeting is around the corner.
 
Made this point elsewhere but one of the things people might underestimate when it comes to Nintendo's own output and their reliance on external partners is how many up and coming development studios there are in general, even with all the consolidation going on. ILCA was a name no one was familiar with and they came out of nowhere and worked on Pokémon, the first ever 'mainline' release not to be developed by Gamefreak.

That's without mentioning the other first time collaborators for Nintendo like Mages(owned by Colopl) and Wayforward.
 
Oregano said:
Made this point elsewhere but one of the things people might underestimate when it comes to Nintendo's own output and their reliance on external partners is how many up and coming development studios there are in general, even with all the consolidation going on. ILCA was a name no one was familiar with and they came out of nowhere and worked on Pokémon, the first ever 'mainline' release not to be developed by Gamefreak.

That's without mentioning the other first time collaborators for Nintendo like Mages(owned by Colopl) and Wayforward.
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Mages and Wayforward are two of the most exciting new collaborators for Nintendo. If it happens, I’m really excited what they do together with both of them beyond remakes.
 
If any of Nintendo's usual partners (Game Freak/HAL/IS/Camelot/KT) are considering selling then Nintendo will probably buy them. That's where they stand.

Nintendo is more interested in organic internal growth which IMO is a good thing.
 
Nintendo don't need 3rd parties, that much has been proven time and again, sure it's nice to have them and monster hunter sells well but they've got to this current position without proper fifa or Cod or GTA. Sony on the other hand are absolutely fucked without them.

Nintendo's detractors bemoan not wanting to play a Mario platformer, a Mario kart, a Mario Party and a Mario golf but those 4 games sell and fill up months of the year, Sony can't push out 4 God of wars over 3 years.

They don't need to buy up people like Koei to get things like musou's, they could do it in house if needed. It would be nice as the Hyrule Warriors (original) version of Impa is awesome and should be in smash but it's not a desperate need.

But we are all getting carried away at the moment. Microsoft haven't made the games yet, if they can get back to the highs of the franchises they now own then it will be a Xbox/Nintendo future for the industry, if they can't then Sony will soldier on as more of a niche platform (ironic considering they've gutted their eastern arms)
 
I think Nintendo’s path forward in terms of acquisition is in the III (triple I) space and Japanese AA devs/publishers.

I think they’re more interested in chasing exclusivity of the next Stardew Valley/Among Us/Hollow Knight/Undertale etc.

We see the start of this with the collaborations with Wayforward and the Forever Seeds Fund in Eastern Europe,
 
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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.
 
If push came to shove I could maybe, maaaybe see Nintendo snatching up Koei Tecmo if it meant keeping them out of someone else’s hands.
 
If Nintendo buys Namco they'd finally own the studio that makes Smash.

They won't though.
 
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Kano said:
the companies that MS bought and would buy are not those significant to nintendo's third party support
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The thought pattern that microsoft would be content with only buying studios that produce content that Sony's audience are interested in and not that which Nintendo's is, strikes me as naïve at best.

This is the company that bought rare out from Nintendo shortly after entering the market.

When they're done gobbling up things so that Sony specifically can't have them, they're definitely going to turn their eye to doing the same to Nintendo. Microsoft wants a monopoly if it can get it in any industry it chooses to enter, and they won't just happily let Nintendo go about their day.
 
I think Nintendo is fine the way it is. Their hardware is selling amazingly well and their games have great sales too. I would say it's like Apple in the videogaming industry, they can perfectly live with their consoles, games and their name, because after all everybody knows who Mario and Pikachu are. Nintendo is a huge part of the videogaming identity. And honestly, the adquisition of Bethesda did not affect Nintendo at all, and Activision-Blizzard's one won't either, as these companies hardly ever release their games in Nintendo systems.

They could be interested in buying Game Freak, HAL or Next Level, but they have not for some reason. Apart of that, buying these companies wouldn't be huge news, only for some Nintendo fans.

Sony is the one who should be worried. Things will become very very interesting in the next months.
 
Linkstrikesback said:
The thought pattern that microsoft would be content with only buying studios that produce content that Sony's audience are interested in and not that which Nintendo's is, strikes me as naïve at best.

This is the company that bought rare out from Nintendo shortly after entering the market.

When they're done gobbling up things so that Sony specifically can't have them, they're definitely going to turn their eye to doing the same to Nintendo. Microsoft wants a monopoly if it can get it in any industry it chooses to enter, and they won't just happily let Nintendo go about their day.
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Eh, only because Nintendo passed on buying Rare out. MS didn’t swoop in, as Nintendo had significant stock already. They just passed.

And MS cannot also just swoop in with Nintendo. Nintendo would have to be willing to sell, and while foreign companies can buy Japanese companies, the way boards works and regulations work in Japan, they can’t just try to force them their hand and do a takeover. More so since Nintendo falls under a Japanese culturally significant company.
 
Most of their Japan partners are fine, and if Sony did try anything they’d likely block them. Bought the only major one they might merge with would be Koei Tecmo, anyone else would be too bulky and even that’s unlikely
 
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Kano said:
Nintendo declined the purchase of Rare, indicating it was specifically content they weren't interested in anymore.
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Nintendo had the chance offered to them to buy them out from the previous owners when they wanted to sell, but that's not the point I was trying to make. I'd argue against not specifically wanting the content too, given they kept working with them for some years on handheld titles later (including Diddy kong racing on the DS!)

The idea that Microsoft wouldn't buy out a studio that had previously been making Nintendo-esque content is something we have historical evidence to not be the case, is all I was saying.

Clix said:
Eh, only because Nintendo passed on buying Rare out. MS didn’t swoop in, as Nintendo had significant stock already. They just passed.

And MS cannot also just swoop in with Nintendo. Nintendo would have to be willing to sell, and while foreign companies can buy Japanese companies, the way boards works and regulations work in Japan, they can’t just try to force them their hand and do a takeover. More so since Nintendo falls under a Japanese culturally significant company.
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They won't buy Nintendo directly, but Nintendo can't make all its software themselves. They rely heavily on third parties to work on Nintendo IP in order to keep series going. Just last year we had releases in first party Nintendo IP series from the likes of Camelot, Koei Tecmo, Mercury Steam, Grezzo, Bandai Namco, Mages, ILCA, etc, that Microsoft would absolutely sneak in and invest in specifically to break their ties with Nintendo down the line.
 
Linkstrikesback said:
Nintendo had the chance offered to them to buy them out from the previous owners when they wanted to sell, but that's not the point I was trying to make. I'd argue against not specifically wanting the content too, given they kept working with them for some years on handheld titles later (including Diddy kong racing on the DS!)

The idea that Microsoft wouldn't buy out a studio that had previously been making Nintendo-esque content is something we have historical evidence to not be the case, is all I was saying.
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We also have very recent historical evidence of the studios Microsoft has poached with their new strategy under Phil Spencer and so far, it's none of those working closely with Nintendo.
 
Kano said:
We also have very recent historical evidence of the studios Microsoft has poached with their new strategy under Phil Spencer and so far, it's none of those working closely with Nintendo.
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Bethesda was the premier 3rd party partner for Nintendo starting with the Switch. Skyrim was even in the launch trailer.
 
The best games on Nintendo platforms continue to be Nintendo's games so it's not really a problem. If Sony eats up a bunch of JP publishers then maybe there's a problem but Sony seem disinterested in Japan generally so I don't know why they would do that as a response to MS.
 
Kano said:
We also have very recent historical evidence of the studios Microsoft has poached with their new strategy under Phil Spencer and so far, it's none of those working closely with Nintendo.
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Yes, because for the moment they're more interested in going after Sonys audience, which is why I started by saying "When they're done gobbling up things so that Sony specifically can't have them", they'll get ready to do the same to Nintendo
 
Linkstrikesback said:
They rely heavily on third parties to work on Nintendo IP in order to keep series going. Just last year we had releases in first party Nintendo IP series from the likes of Camelot, Koei Tecmo, Mercury Steam, Grezzo, Bandai Namco, Mages, ILCA, etc, that Microsoft would absolutely sneak in and invest in specifically to break their ties with Nintendo down the line.
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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.
 
A lot of people here talking about MS out right buying Japanese developers but didn’t Japan, in the past few years, start to limit the ability for foreign companies buying tech and software developers? Or am I misremembering that?
 
You have got to keep in mind that the studios being acquired need to accept the offer and can look elsewhere if they really want to.

Hypothetically if Microsoft approached the Takahashi brothers about selling Camelot, and they decided that cashing out would be a good idea there's nothing stopping them from going to Nintendo for an alternate offer.
 
Nintendo's open to M&A and they also have stakes in a good number of 3rd party partners (Bandai Namco, Square Enix, Konami, Koei Tecmo, Kadokawa, DeNA, CyGames). I only see them moving to publisher acquisition as a defensive measure though really.

Nintendo's real advantage is the strength of their own properties. While losing COD is a major wound for PlayStation (in just a day it's erased 15% of Sony's overall value, and the stock's still dropping) it's pretty much of no consequence to Nintendo. Even Nintendo's "important" 3rd party franchises like Dragon Quest or Monster Hunter wouldn't be detrimental losses in the same way because unlike PlayStation, they're not really dependent on 3rd parties to drive their console ecosystem.

The bigger threat for Nintendo is really becoming an acquisition target themselves, although it's unlikely unless they chose to sell given their finances and holdings. And if Nintendo went up on the block for sale, Microsoft would probably have to contend with giants like Disney and Apple rather than Sony.
 
I don't think we have to worry as Nintendo's foundation is in Japan and business seems to work differently there as it does in the US. I wish we had someone with more knowledge on this topic chiming in here. From what I heard it's much harder to take over other companies in Japan both through regulations but also due to business culture. I mean, Microsoft once approached Nintendo about buying them and they apparently laughed at them. Square is also still independent after all these years (except for the merger with Enix, but from what I understand they still work in many ways as seperate companies), if they were cool with being bought and Nintendo / Sony had been interested in buying them, it would've happened years ago.

In any case, this battle is about the US (and probably the European) market and not Japan. Sony won't be able to retaliate against Microsoft by buying up one of the larger Japanese companies. Let's take Capcom for example. I'd say their current three biggest IPs are Resident Evil, Monster Hunter and Street Fighter. Having the next Resident Evil exclusive would be big for Sony, but Monster Hunter? How many Microsoft customers would miss MH? Street Fighter V was already console exclusive on Playstation. It wouldn't be enough to stand against Microsoft owning Bethesda and Activision/Blizzard at all. Sony would rather have to buy one of the big Western companies left, like Take-Two or Ubisoft. I don't see it though. Honestly, I don't know what they can do. They foolishly abandoned their home market and don't have the funds to compete against the behemoth that is Microsoft.

So the only worry for Nintendo is probably that Sony regrets leaving Japan behind and refocuses on that market. Nintendo is in an excellent position though.
 
Brock Reiher said:
Bethesda was the premier 3rd party partner for Nintendo starting with the Switch. Skyrim was even in the launch trailer.
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They released a bunch of ports that sold very little besides Skyrim. It's not what I'd call a significant partner.
 
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It's fairly clear that Nintendo still sees itself as a "family business." Yes it's a public corporation, and now they are extending into more licensing and IP expansion work (movies, theme parks, etc. -- all through partnerships), but they still think of themselves as a focused company -- not a conglomerate. Nintendo makes a few products compared to giant megacorps like Sony and Microsoft, for whom video games is a side gig, and they like it that way.
 
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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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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.
 
Brock Reiher said:
Bethesda was the premier 3rd party partner for Nintendo starting with the Switch. Skyrim was even in the launch trailer.
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Bethesda and Activision both released notable stuff on Switch and it did well. Neither however were really a driving force for the platform in the way they have been for PlayStation and Xbox at points.

Yes losing some games hurts Nintendo platforms, but it's not a potentially fatal wound like it can be for Sony.
 
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