Nintendo Laughed Off Microsoft’s Acquisition Offer Prior to First Xbox Launch in 2001

Microsoft also went after EA and Square Enix, in vain.

By Akhil Arora | Updated: 7 January 2021 11:12 IST

Photo Credit: Akhil Arora/Gadgets 360

Highlights

Microsoft offered hardware expertise to Nintendo’s software
Then-leader EA said “No, thanks” to Microsoft’s offer
Square Enix told Microsoft the price was too low

Microsoft attempted to buy Nintendo prior to launching the first Xbox in 2001, former Xbox executives have revealed, in a bid to secure its coveted first-party titles — the likes of Mario, Pokémon, and Zelda — but the Windows giant was laughed out of the room by the Japanese giant. Microsoft also unsuccessfully tried to purchase then-leader Electronic Arts, Square Enix, and Mortal Kombat publisher Midway Games.

“Steve [Ballmer, Microsoft's then CEO] made us go meet with Nintendo to see if they would consider being acquired,” Microsoft's former Xbox director of third-party relations Kevin Bachus told Bloomberg, for an oral retelling of the creation of the Xbox. “They just laughed their a**** off. Like, imagine an hour of somebody just laughing at you. That was kind of how that meeting went.”

But it seems that wasn't the only meeting. “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,” Xbox's then head of business development Bob McBreen said. “The pitch was their hardware stunk, and compared to Sony PlayStation, it did.

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“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.”

At the time, Nintendo 64 was around, and the company was working on its next console, that would turn out to be the GameCube and launch alongside the Xbox. The two sold 21.74 and 24 million units respectively, but those numbers were dwarfed by PlayStation 2 that sold over 100 million units.

Microsoft approached EA before Nintendo, that essentially said “No, thanks.” Square Enix declined Microsoft's offer because “the price [was] too low” and Midway Games fell out because it was low value for Microsoft. Eventually, Microsoft ended up acquiring Bungie that approached itself, and that resulted in Xbox's flagship title: Halo.

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