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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 river of rumors that flooded gaming publications and
online message boards.
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 game
publisher 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.
Last week individuals close to the company leaked to industry
analysts and media outlets that Microsoft was interested
in purchasing Rare. We now have the near final details of the epic
deal involving the sale of Rare Ltd. to Microsoft. Below is
all the information known thus far regarding the acquisition that is
expected to be announced by Microsoft at the company's X02 Europe
event on September 24th.
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Note:
The following information has not been confirmed by Rare Ltd,
Nintendo Co Ltd, or Microsoft Corp. While we believe recent
developments have been detailed in this article accurately,
specifics have yet to be confirmed.
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In an effort to significantly expand internal software
offerings for the Xbox console, Microsoft will soon acquire
U.K.-based Rare Ltd in a deal rumored to be worth between $390m and
$540m (£250 - £350). The company has found little success coming up
with system-selling titles beyond the magnificent Xbox launch title,
HALO. Jay Defibaugh, an analyst with CSFB, recently commented,
"It's very often the exclusive titles that drive hardware
sales... Rare is a high-profile developer known for high-quality
games."
 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 will receive upwards of $250m (¥30b)
from Microsoft for their position. It's expected that Nintendo will
use the added cash to invest in smaller development houses and
expand relationships with larger developers such as they have in the
past with Namco and Sega. Nintendo of America comments, "In
evaluating our investments in developers, as well as the financial
benefits to Nintendo over the years, we've decided it's in
Nintendo's best interests to focus on diversifying our portfolio of
developers and projects." The company 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.
It is expected that Rare will concentrate all future development
efforts on games for Microsoft Xbox and Nintendo Game Boy. Rare and Nintendo
have been haggling over game licenses for some time so unfortunately particular development plans remain unknown at this
time. Rare reserves the trademark rights to Conker's Bad Fur Day,
Jet Force Gemini, Kameo, Perfect Dark, and Sabre Wulf. However, Nintendo holds
legitimate claims to some of the above franchises through contractual
publisher agreements. Such conflicts will likely be resolved in any final deal with Rare either removing references to given Nintendo
properties or Microsoft buying the rights to respective games.
The good news for any of you that were wondering, Star
Fox Adventures will be released on GameCube later
this month as scheduled. It also remains possible that Nintendo
could continue to publish some Rare titles for Nintendo platforms
into early 2003. On the Xbox front, rumors suggest that Kameo:
Elements of Power will be Rare's first Xbox game.
GameCubicle.com will have more information as it develops.
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September
12, 2002 |
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Rick - Editor in
Chief, GameCubicle |
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