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Commentary > Game Over
Microsoft's Nintendo ambition
Gates said to crave gaming competitor, but Tomb Raider may be easier than Donkey Kong.
August 4, 2004: 3:31 PM EDT

NEW YORK (CNN/Money) Since launching the Xbox , Microsoft has purchased some notable developers and had serious talks to buy several others. Now it might have its eyes on a larger prize.

Founder and chairman Bill Gates has expressed interest in buying game giant Nintendo should the company put itself on the market, reports German magazine Wirtschafts Woche.

"If Hiroshi Yamauchi calls, he will be directly transferred to me," the magazine quotes Gates as saying at an unspecified analyst conference. Yamauchi is the former president of Nintendo and still owns a stake in the company.

The magazine goes on to paraphrase Gates as saying he would immediately make an offer if Nintendo shows a readiness to sell itself.

It's a juicy headline and I have no doubt that it's true. Given the opportunity, Microsoft would not just jump at the chance to own the company that created Mario, Zelda and Donkey Kong, it would leap, frothing at the mouth and sinking its teeth into anything that got in its way. You'd see Gates and Chief Xbox officer Robbie Bach doing a dance that would put CEO Steve Balmer's infamous "dance monkey boy" boogie to shame.

Here's the thing, though. Nintendo's not real interested in selling itself.

"It would be a great investment," said Perrin Kaplan, vice president of marketing and corporate affairs for Nintendo. "We're a very successful company. But the bad news for Mr. Gates is we're not for sale."

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Analysts laughed literally when told about the report.

"All I know is since Microsoft announced it was getting in the gaming business, there have been rumors, but I just can't imagine Nintendo selling," said Mike Wallace of UBS Securities.

A Microsoft spokesperson would only say ""Microsoft does not comment on rumors or speculation."

Perhaps a better game of "who's buying who in the game industry today" can be played with Eidos (EIDSY: Research, Estimates). The company that Lara Croft built is most definitely on the market these days and confirmed earlier this week that it is in talks with several companies about a possible takeover.

Things are preliminary and may go nowhere. And Eidos won't be making further comment but analysts have a couple of guesses about who's at the table. The chief contenders are UbiSoft, Electronic Arts (ERTS: Research, Estimates) and Activision (ATVI: Research, Estimates).

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Eidos is a pretty juicy target, with a number of well-known franchises in its collection. The best known is the "Tomb Raider" line, which arguably has been overexposed in recent years, but could be revived if done right. Less successful franchises, such as "Deus Ex," "Legacy of Kain" and "Hitman" still have loyal cult followings.

EA has been in a buying mood lately, last week purchasing Criterion, the developer of the "Burnout" racing games and (more importantly) the creators of Renderware, perhaps the most popular third-party game engine in the industry, for $48 million.

"It gives [EA] a key franchise in 'Tomb Raider'," said P.J. McNealy, an analyst with American Technology Research. "[Other games] 'Hitman' and 'Thief' are in a genre in which they don't compete right now."

UbiSoft is on the rise these days, riding a critical and commercial wave of successful titles, including "Prince of Persia" and "Splinter Cell". Buying Eidos would add to its core strengths.

Activision has seen its share prices rise over the past year on the strength of the "Spider Man 2" game, "Call of Duty" and "Tony Hawk Underground". Adding a collection of solid franchises to that mix would poise it for future growth.

Let's not leave Microsoft out of the running, though. After all, Lara Croft isn't the force of nature she once was, but she'd still be a strong addition to the line up of games for the next generation of Xbox. And many of Eidos' titles appeal to a core gaming audience, which Microsoft has targeted with its console.

It may not be Nintendo, but if Bill & Co. are looking to expand Microsoft's game development unit, they could do a lot worse.  Top of page

Morris is Director of Content Development for CNN/Money. Click here to send him an email.

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