News > Deals
Microsoft buys game developer Rare
Nintendo keeps Donkey Kong, but other big franchises are headed to Xbox.
September 20, 2002: 5:12 PM EDT
By Staff Writer Chris Morris

NEW YORK (CNN/Money) - Microsoft has upped the stakes in the console war, buying a development house that had previously made games exclusively for Nintendo.

CNN/Money has learned that Redmond, Wash.-based 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.

Banjo-Kazooie will move to Microsoft...

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.

...but Donkey Kong will remain a Nintendo game.

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."  Top of page

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