Topic: Unconfirmed(?) FTC Leak: MS hoping to buy Nintendo (and Valve)

[BlackNMild2k1]

Has anyone seen this? the original link has obviously been killed, but apparently there was a FTC leak today regarding some Microsoft business dealings surrounding gaming acquisitions....

I think it started with the Activision/Blizzard buyout, and now here we are



I have not read up everything on this, and just ran across it minutes ago, but I'll just see what you all think about this.

edit: this was the original source BTW
https://files.cand.uscourts.gov/files/23-cv-02880_FTC_v_Microsoft/PX7011%20(Redacted).pdf

[Khushrenada]

Heh, Aug. 5, 2020. People talking crazy because of the pandemic.

These e-mails just seems like some guys talking up some dream scenarios almost like us forum users used to do back in the GameCube days of how Nintendo could become the console leader again... 

The one comment I find rather noteworthy is the first sentence by Phil about gaming being the most likely path for Microsoft to stay relevant with consumers. Many people have wondered over the years why Microsoft keeps pouring so much time and energy into the XBox brand when it just doesn't seem to be getting anywhere in the market and is always ending up 2nd or 3rd. It's at the point where a lot of their stuff is available on PC or they are releasing their stuff on other consoles (Cuphead, Ori,) to question why bother still making XBox as no one can see what the goal is for it anymore. Which is ironic in that at the end of Phil's e-mail, he says that Nintendo's future exists off of their own hardware when it seems that might be the case for Microsoft's gaming division.

Obviously, for a company like Microsoft that is thinking about who they could acquire to help give their brand momentum, it would be stupid for them not to think of acquiring Nintendo. If Microsoft were to buy Nintendo, it would probably be the end of the console wars. Expecially now that they have Activision/Blizzard. They could make everything exclusive to XBox/PC and what is Sony going to compete with for Playstation. As long as Microsoft is in the gaming business, they'll always be thinking about acquiring Nintendo. Whether that ever happens depends on Nintendo's board of director's and if they just want to profit and walk away from the company. That's basically all Microsoft has to win over to do it.

On the other hand, things have changed somewhat since this time. First, pandemic turned out to be huge for Switch business so the idea of Nintendo not making their own hardware and going software only does not seem likely. Switch was already doing fine up to this point but has done incredible since. Second, Nintendo has opened their business endeavors beyond gaming and started taking advantage of their IP in various ways such as the Super Nintendo World theme parks and now getting into movies and possible TV shows with their IP. The Super Mario Movie just proved that there is plenty more money to be made in this way. The Board has basically said in a stockholder report that they are shifting to view themselves as more of an entertainment company. While gaming will still be a core focus, they don't want it to be the only focus. In that sense, Nintendo is awakening to a future "off of their own hardware". Third, Nintendo has instead proven to be a good ecosystem for Microsoft to release games on. I'd love to know how the sales of Cuphead and Ori compared to other platforms they were released on. XBox just doesn't sell in Japan but thanks to Nintendo Switch Minecraft is a huge seller for Microsoft in Japan. Perhaps it is Microsoft trying to win over Nintendo in case they ever sell by being more agreeable to stuff and willing to work with them to allow things like Rare games on the N64 NSO or have Banjo-Kazooie and Minecraft in Smash. But it also aids Nintendo in staying independent because it makes their system and games library stronger.

If Nintendo continues to dominate Japan, most Japanese developers will likely continue supporting them and that varied software will continue to help Nintendo make sales and have a foothold in places like NA and Europe even if Western developers continue to hesitate about developing for Nintendo instead of Sony or MS. With MS unable to get traction in that market, being friendly with Nintendo and putting stuff on Switch may be the key to getting their software to do well. In which MS almost needs Nintendo more than Nintendo would need them or to be bought by them. For MS, buying Nintendo would hopefully give them the market share and presence in Japan they would like and end that reliance but might the market then just flock to Sony instead? Nintendo's in a better bargaining position with Microsoft now by controlling that market and getting MS to partner with them on things and make deals. Likewise, Microsoft may be happy enough with the situation to use Nintendo for putting more of their software on their system and use them as a way to profit in Japan and less focused on buying Nintendo. Rather than spend the billions needed to buy Nintendo, they can just use that Switch pipeline to make millions or billions and not get through the whole return on investment from the buyout.

[UncleBob]

I can pretty much guarantee that if there was every any chance of Microsoft buying Nintendo (of which there was not), now that these emails have leaked, it will never happen.  To the point where this probably soured all good will Microsoft had seemingly built with Nintendo (Goldeneye, for example).  In fact, Phil's inside man Morfit is likely to wake up tomorrow with a severed horse head in his bed and quickly sell off all Nintendo shares he has acquired.

[broodwars]

Stuff like this is why I've never liked Microsoft in the gaming industry: they don't "create" anything. They just use their PC warchest to buy their competition until no one CAN compete with them. It doesn't matter if it's profitable so long as it's DEFINITELY unprofitable for everyone else. They're the Google of the gaming industry.

And everyone's happy with it "because GamePass", though something else that came up in the leaks is that Microsoft apparently has very high estimates for how much it costs them to buy Day 1 GamePass "content".

Ugh...I have my issues with Sony & Nintendo, but I just have utter disdain for Microsoft. And yeah, it doesn't help now that we can contextualize Banjo-Kazzoie & MineCraft guy in Smash as well as GoldenEye returning just being part of a move by Microsoft to try to assimilate Nintendo.

[Adrock]

Has anyone seen this?

Yeah, I’ve been following it mostly on another Nintendo message board.

This email, while embarrassing, isn’t even the worst part of the leak. Multiple unannounced games including a new Doom installment, plans for an updated Xbox Series X/S controller with accelerometers, plans for multiple new Xbox Series models including a digital only Series X, and tentative plans to launch a Series X/S successor in 2028 etc. are all worse. That has like fiscal year implications among other things. And imagine Nintendo and Sony now having this much lead up time to plan around your future releases. YIKES!

As for the email itself, I mean, it isn’t a stretch that Nintendo, with its wealth of popular IPs like the most recognizable character in the world, is considered the ultimate acquisition in the gaming industry. Every company with interest in video games that also has the capital/stocks/assets to even make a run at Nintendo if it was ever for sale (e.g. Microsoft, Apple, Amazon, Google) would love to acquire it. Unfortunately for every one of them, Nintendo is currently the most successful it’s ever been and recently expanded to movies and theme parks. A private email brazenly admitting all this getting leaked isn’t that bad, right? Bad optics but people will forget about it in time aside from occasional mentions on video game message boards.

And I doubt this changes anything at Nintendo. The company knows how valuable it is. Another company looking to merge/acquire is like Tuesday at Nintendo. This already happened at least once. Microsoft pitched an acquisition in like the early 2000s and got laughed out of the room. A hostile takeover isn’t feasible either as majority Nintendo stock is safely held by the company and trusted partners. I imagine Nintendo has been happy to reap the benefits of Microsoft’s goodwill over the past several years without really giving up that much in return. Maybe that changes now? 🤷‍♀️ However, no one at Nintendo will lose sleep if, for example, Microsoft decides to be petty and not license Banjo-Kazooie in the next Super Smash Bros. If anything, Microsoft stands to lose more by not publishing games like Ori and the Blind Forest on the eShop.

[Ian Sane]

This doesn't surprise me in any way.  Of course if you're looking to acquire other game companies that Nintendo would be the one you're most interested in.  What would surprise me would be evidence of Nintendo and MS having semi-serious talks about this.

Though if MS was to ever purchase Nintendo I suspect I would be done with current gaming.  Like not even necessarily in a grand "taking a stand" gesture, I just figure they would ruin Nintendo so quickly that I would just lose interest and gradually transition to solely playing retro games.  In a way I wonder if my backlog is my subconscious preparing for that day.

[UncleBob]

The thing that makes this email bad us Microsoft's history - especially Nokia - combined with them having an "inside man" gobbling up Nintendo stock on the sly.

[Adrock]

The thing that makes this email bad us Microsoft's history - especially Nokia - combined with them having an "inside man" gobbling up Nintendo stock on the sly.

Not defending the practice in any way, but isn’t this a thing that regularly happens?

Ultimately, no one gets controlling interest of a company like Nintendo without Nintendo knowing. I thought it holds controlling interest in itself. Can someone else verify?

[broodwars]

The thing that makes this email bad us Microsoft's history - especially Nokia - combined with them having an "inside man" gobbling up Nintendo stock on the sly.

Not defending the practice in any way, but isn’t this a thing that regularly happens?

Ultimately, no one gets controlling interest of a company like Nintendo without Nintendo knowing. I thought it holds controlling interest in itself. Can someone else verify?

According to Google, Nintendo only owns 10% of its own stock.

What I'm not sure of is whether Microsoft could legally even acquire Nintendo. I seem to remember there being a law on the books in Japan forbidding ownership of any Japanese company by a foreign one. IIRC, it's one if the reasons the Oriental Land Company owns and operates Tokyo Disneyland. Disney only leases its properties and expertise to OLC. That said, Google seems to indicate that law is no longer in play.

[Adrock]

According to Google, Nintendo only owns 10% of its own stock.

Were you using this site?

If so, 10.35% still makes Nintendo itself its largest shareholder:



Not a stock broker/investment expert or privy to the board of directors, but my (very rudimentary) understanding of public trading is there are voting stocks and common stocks (AKA non-voting stocks). I imagine (but am too lazy to verify that) Nintendo has the most voting stocks of any singular entity.

Regardless, I’m not even remotely invested (heh) in that. Microsoft has been coming for Nintendo for over 20 years. If it was so easy to get controlling interest of Nintendo, Microsoft or another company probably would have done so by now. You’d have to convince the largest holders of voting stock to sell those shares. It’d have to be such an egregious overpay like Elon Musk with Twitter to go anywhere. And even then, there are methods to prevent a hostile takeover though Spencer did mention in the email he was against hostile action, opting instead to play the long game (at least for now). However, the likeliest scenario is Nintendo would just buy up the voting stock itself than let Microsoft have it, right? I feel like Nintendo did just that the last time this happened.

I also recall reading about governmental resistance against foreign ownership of (I think) culturally relevant Japanese companies of which Nintendo would absolutely apply. I’d have to do some sleuthing, but like… will I?

I still don’t believe the revelation that Microsoft is still lusting for Nintendo to be the big story in the leak. Like name a video game company that wouldn’t want to acquire Nintendo. Microsoft’s hardware release schedule is just available to everyone now. I’m imagining Nintendo prepping Switch 2 and a new 3D Mario looking at Phil Spencer’s email like, “Imma end this man’s whole career.”

[Khushrenada]

Microsoft’s hardware release schedule is just available to everyone now. I’m imagining Nintendo prepping Switch 2 and a new 3D Mario looking at Phil Spencer’s email like, “Imma end this man’s whole career.”

[Luigi Dude]

Hopefully news like this will finally make people stop sucking Phil Spencer's dick and realize he's no different then the rest Microsoft management.  Every time Microsoft would buy another studio, so many comments online praise Phil for being so smart in his decisions, like no one else would have thought of that.  Seriously, if Phil was so smart he would have restructured Microsofts internal studio's run better, as well as put a greater emphasis on quality.

Instead as Broodwar already said, they just use their massive war chest to buy all competition.  The most telling example is how Halo used to be the premier online shooter until Call of Duty surpassed it.  Instead of making the right steps to compete, they just fumbled the ball over and over again.  No surprise that when the most recent Halo which they spent years hyping up ended up being a joke, they finally said "**** it" and just bought up Activision so they could have Call of Duty themselves.

This would have been like if Nintendo, after Skyrim surpassed Skyward Sword, decided to just buy Bethesda themselves instead of creating Breath of the Wild to compete.  This is why it's so annoying that many don't seem to have a problem with Microsoft buying up all these studio's.  Microsoft is by far the worst 1st party developer, with many of it's studio's being poorly run with no reguards for quality.  People really want these guys in charge of most of the industry?

Yes Nintendo and Sony do publish games of lesser quality as well, but they at least have studio's that they expect Game of the Year worthy titles from and fund those studio's well.  Microsoft is too incompetent to even do that.  When Microsoft does publish a higher quality game it's usually by accident instead of actual good leadership on their end.

[UncleBob]

eh.  If Microsoft runs the studios into the ground, the talent will leave.

It's not like Activision is using 99% of their IPs anyway.

[Adrock]

Hopefully news like this will finally make people stop sucking Phil Spencer's dick and realize he's no different then the rest Microsoft management.

It won't. The people wearing kneepads for Spencer are already in Microsoft's PC/Xbox ecosystem. They would only stand to benefit from Microsoft acquiring Nintendo.

Collectively, I'm just over it. The regulators in charge of preventing companies like Microsoft from acquiring their competition and becoming even larger are simply going to approve the acquisitions anyway.

Often feels like it's on Nintendo to protect itself because regulators seem content to do jack and **** about it. If there ever came a point that Nintendo wasn’t Nintendo anymore, I have a sick backlog so when it comes to new games, I’ll straight up:

[Adrock]

eh.  If Microsoft runs the studios into the ground, the talent will leave.

It's not like Activision is using 99% of their IPs anyway.

I’m not as confident as you are. Activision Blizzard King has been a dumpster fire for a good long while now especially in the last two years yet people still work there. The last non-acquisition related story I read about the company was this one which is like the most “ABK gonna ABK” thing that could ABK.

Still, am I the only one who thinks it’s hilarious that Microsoft saw what was happening at ABK and was still like “Yep, let’s make this my problem now” primarily for Call of Duty. I can’t look away; it’s like watching a train wreck in slow motion. I kind of feel bad for the talent, but y’all should have jumped ship ages ago. They remind me of the band playing in Titanic while it’s full-on mayhem in the background.

[Khushrenada]

Microsoft is a weird beast in this market. Despite these leaks, is there anything that tells us what is Microsoft's goal in videogames? What are they trying to accomplish here? What is their purpose?

It was said that when Microsoft first came into the market, it was because they saw what Sony was doing and realized there was potential to control the electronics of the living room. To be the entertainment hub of the living room. Hence the battle of HD-DVD vs Blu-Ray during the Xbox 360 / PS3 days. Both also pivoted to allow streaming services.

The problem is that people are no longer tied to just one screen. The strategy that helped the PS2 of being able to play games and DVDs to make it appealing to people to buy an all-in-one device just doesn't exist anymore. With so many streaming services and devices like tablets, phones, and laptops, the idea of needing an all-on-one entertainment hub doesn't really exist. Even when in people are together in a living room, maybe one person would be using a console on the tv but another person can be watching something on a tablet and another on a laptop.

So, what now? Microsoft seems to have seen this shift towards streaming by creating GamePass to try and become the Netflix of gaming. In that sense, these acquisitions of game companies make sense because it would help keep adding content to the service. But it also makes their hardware unfocused. Buy an XBox to access GamePass? Ok, but that can be done on a computer. Why else buy it? If Microsoft's goal is to get GamePass on Nintendo and Sony systems, that continues to appear unlikely although it oddly might have better success if Microsoft isn't making hardware. If they were now the biggest third-party publisher then it might be harder to resist accepting that service.

That's part of why I'd say Microsoft has struggled in the market since the Xbox 360 days. (Probably didn't help they had a lot of hardware failure with the 360. There was probably some consumer trust lost there). Of course, software has also been a weakness for XBox as well. 360 was the high point in some ways because the Halo brand was still good and they did get a few success like Gears of War. The play to be the "bro-gamer" console of choice with FPS games and online and multiplayer felt like Microsoft's identity in the market at the time but what is now?

Like, here's something that has come out in the leaks: https://twitter.com/Wario64/status/1704003068239782374?t=ZUN_p_WoxP03FlA-lnz7uA&s=19

One of the pictures there shows the innovation XBox has brought to market and it gets a big... shrug from me.


Potentially bigger news was this image that had been found of Microsoft's attempt to possibly do a Switch of their own.



As much as we bagged on Sony, say 15 years ago, of always copying Nintendo, Microsoft seems even less creative and just chasing after both what Sony and Nintendo are doing. Perhaps the initial XBox helped spur Sony into expanding more their online gaming and infrastructure plans they they initially might have had without Microsoft in the market for the PS3. But beyond that, is there anything one can point to and say Nintendo and Sony saw Microsoft doing this and copied it or made them change their plans?

Yeah, Microsoft remains a sort of threat in the money they can use to buy up things but buying something doesn't translate into a path for success either. The danger comes if they ever get someone who can bring in a sense of identity and culture to their gaming division and can implement a better organization for software development with all these companies they have acquired. That's the danger Microsoft poses. The potential they have. For now, the lassiez-faire attitude they seem to show and the idea that they'll just buy something to fill a weakness they spot keeps them kind of lazy in the whole endeavor.



Good luck.