Indifferent to the acquisitions of its gaming rivals, Nintendo seeks to chart its own path to success

On January 18, tech giant Microsoft announced plans to acquire Activision Blizzard Inc. for $68.7 billion in a deal that would include hit franchises such as Call of Duty, Warcraft and Candy. Crush.

Later that same month, Sony acquired game studio Bungie, makers of first-person shooter Overwatch and the original studio behind Halo, in a deal worth $3.6 billion. dollars.

Both acquisitions are significant in their own way, but some in the industry are now wondering where such expansionary moves leave Japanese rival Nintendo?

Founded in 1889, Nintendo is a relatively new company compared to other companies in Kyoto, where it is based. In the world of video games, however, it is the oldest and most storied company in the industry.

The company first cut its teeth producing playing cards, but had already started producing arcade games in the 1970s. Around the same time Atari went bankrupt in the United States with the video game crash of 1983, Nintendo released the Famicom console in Japan and video games were never the same.

Throughout its history, Nintendo has always done things its own way. At best, the company is bucking the trend and looking to create an appetite for a completely new product.

It’s perhaps no surprise that while other console makers are looking to offload dump trucks worth their money on new acquisitions, Nintendo seems to be more optimistic. According to a Reuters report in early February, Nintendo Chairman Shuntaro Furukawa appears to be wary of acquisitions, saying, “It wouldn’t be a plus to suddenly bring in people who don’t have the way of thinking. from Nintendo.”

Nintendo isn’t against acquiring studios per se, as can be seen in its acquisition of Monolith Software, creators of Xenosaga, from Bandai Namco in 2007.

However, the acquisition wasn’t just a random purchase, as the two parties had been working together for some time.

Speaking at the time of the purchase, then-Nintendo chairman Satoru Iwata clarified the company’s stance on mergers and acquisitions.

“When we say we don’t do mergers and acquisitions, there are always exceptions, so let me explain,” he said. “We never said we would never do mergers and acquisitions in any situation.”

Iwata noted that Nintendo would consider an acquisition if it could “absorb the real value of the business”.

Prior to the acquisition, Monolith Software had a long relationship with Nintendo and made games suitable for its hardware.

“If certain conditions are met, we might do the same in the future,” Iwata said. “However, we will be very careful and selective, to only partner with people with whom Nintendo can create a long-term working relationship.”

Corporate culture for Nintendo is key, as are relationships. In this regard, Nintendo does not see business as a way to generate short-term profits. Nintendo could take studios and put the company logo on the games, but that sets the bar high for creativity and quality. Ultimately, Nintendo takes time to seal the games it produces with its new partners.

In late February, Nintendo made its own acquisition, buying longtime programming specialist Systems Research and Development. Nintendo’s relationship with SRD dates back four decades, with the programmer even being involved in the creation of the original Super Mario Bros. game.

In an official statement, the Kyoto-based gaming giant said the move “serves to strengthen SRD’s management base and ensure the availability of software development resources for Nintendo” as well as serve as “an improvement anticipated effectiveness of software development”. .”

For Nintendo, it’s a low-risk decision as it has worked with SRD since 1983. Such partnerships are an effective way for Nintendo to maintain quality by ensuring that its studios – and the people who work there – continue to produce content to the same high standards as they have been over the years.

Nintendo won’t risk ruining what makes Nintendo, well, Nintendo. It’s way too special.

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