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 In
December of 2001, U.K. game developer Rare Ltd. mailed out
Christmas cards wishing season's greetings to members of the video
game industry. The
back of the card featured a a Christmas tree with presents wrapped in the shape
of current generation consoles laying underneath. The
innuendo was made all the more direct by the the card's message that
concluded with
"...and surprises under every tree." The card set off a
memorable flood of rumors on online message boards and in industry
publications.
By mid 2002, individuals
close to Rare verified that the developer was in possession of Xbox
and PlayStation 2 development kits. Soon after, leaks from industry
insiders confirmed that Rare was on the bidding block and that Activision was a leading bidder. By E3 2002, the
company's imminent departure was all but confirmed when Rare was a
near complete no-show at Nintendo's booth. With rumors running
rampant throughout online publications and speculation on Internet
message boards fervent, perhaps it was Rare's silence more than
anything else that in recent months seemed to confirm the
inevitable.
 Microsoft Corporation began
searching for acquisition targets in
early 2002 with the goal of significantly expanding internal
development capacity. At the time, Microsoft found little success
developing any system-selling games beyond the magnificent Xbox launch title,
HALO. Jay Defibaugh, an analyst with CSFB explained,
"It's very often the exclusive titles that drive hardware
sales. Rare is a high-profile developer known for high-quality
games." Microsoft turned to U.K.-based Rare Ltd.
as the solution to their problems. In a deal worth $375 million, Microsoft
announced the acquisition of Rare at the company's X02 Europe
event on September 24th, 2002.
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 In
April of 1995 on the heels of Donkey Kong Country's success,
Nintendo bought a 25% stake in Rare and spent $15 million to
co-develop Rare's Manor Park R&D center in Twycross, England. At
the time of the investment, former Nintendo of America chairman,
Howard Lincoln told the Wall Street Journal, "Rare is an
outstanding company... This is our way of putting our money where
our mouth is."
The investment assured the second-party exclusivity of Rare for a
set time period. In later year's, Nintendo increased their interest
in the developer to 49% and gained 38% voting rights on
Rare's board.
With Rare founders Chris and Tim Stamper seeking an exit strategy
and Rare's exclusivity contract complete, Nintendo was given the
option of buying the remaining un-owned portion of Rare. Nintendo
declined. Instead, Nintendo received $183m
from Microsoft for its position. According to Peter MacDougall,
Executive VP of Sales and Marketing with Nintendo of America,
"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... In other words, we passed on this opportunity
for very good business reasons."
It's expected that Nintendo will
use the cash from the deal to invest in smaller development houses and
expand relationships with larger developers as they have in the
past with Namco and Sega. MacDougal states, "The disposition of
this investment leaves us in a position to become even more
aggressive in expanding our development capacity, both internally
and externally. Aside from several partnerships already announced
over the past year, we are currently in similar talks with several
other prospective partners around the world." Nintendo is also quick to note
that Rare contributed 9.5% to Nintendo's unit sales in
the 2001 transition year and just 1.5% in fiscal 2002.
In Microsoft's official announcement, it was revealed that Rare will
introduce five games on the Xbox over the next two years including
racers, shooters, and platformers. Kameo:
Elements of Power will be Rare's first Xbox game when it is released
in early 2003. Other greatly anticipated franchise include Banjo-Kazooie,
Conker's Other Bad Fur Day, and Perfect Dark. Robbie Bach, Chief Xbox Officer at
Microsoft, explains that the partnership, "broadens
[Microsoft's] reach internationally as gamers around the
world have demonstrated their fanaticism for what Rare consistently
produces." Ed Fries, VP of Xbox Game Content at Microsoft also
chimes in, "As a gamer, you could hardly wait until Rare's next
title was announced. You didn't know what genre it would be, but it
didn't matter because you knew you were going to love it."
Looking to the future, many exciting developments are sure to come out of Twycross,
England. Rare recently provided a promotional
video
featuring the company's top game characters. Information on Kameo is
slowly forthcoming as Rare continues to update their Web site
with new media and details.
Meanwhile, the heroine of Perfect Dark, Joanna Dark has seen an
anime-styled redraw that looks quite nice. Unfortunately, no word
has been released thus far regarding Conker's Other Bad Fur Day. One
thing's for sure though, we can't wait for E3 2003.
It's been a great ride over the
years with Rare on board and GameCubicle is saddened to such a great
company leave. We wish Rare the best of luck in their new endeavors.
In a letter to their fans, Chris and Tim Stamper write on behalf
of Rare, "We would like to thank all of the loyal game fans that have been great Rare supporters on previous formats over the years, and would like to extend a welcome to them to view the latest Rare games on the Xbox as they become available.
We at Rare are excited to be working on the Xbox with its tremendous performance and potential for wonderful games. Going forward we hope to display some of these very exciting titles, and also hope that you share our passion for games!"
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September
24, 2002 |
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Rick - Editor in
Chief, GameCubicle |
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