In one of the hottest mornings in videogames news we can remember, it seems that Rare, the UK publisher behind some of the best-loved Nintendo 64 titles, has been sold to a third party, as exclusively revealed by us early last week.
Senior sources are now confirming in great numbers that a deal, believed to be worth between £250 million and £350 million has been signed, seeing the Rare-founding Stamper Brothers exit the games industry.
Heightening the frenzy, Nintendo of Japan spokesman Yasuhiro Minagawa said overnight that “…we may consider selling the shares we have”.
Following Activision taking a step away from Rare, reportedly due to less-than-pleasing bookkeeping and the alarming asking price, Microsoft stepped into the fray. A buy-out of Nintendo’s most coveted second-party developer would be seen as a huge coup for the software giant.
A senior high-ranking UK publishing source, who preferred to remain anonymous, today said, “The deal was done three weeks ago. All that is happening at the moment is the ironing out. Nintendo will be eager not to lose face, or seem needy for cash as the deal is announced. The exit strategy for both the Stamper brothers and Nintendo will now be the top of the negotiation priority list.”
It is also worth remembering that any deal could potentially fall through at any moment. Nintendo as a firm is well known for being difficult at the negotiation table. Even with the departure of the cantankerous former president Hiroshi Yamauchi, his replacement, Satoru Iwata, is famed for being a shrewd, stern businessman.
Microsoft will have no doubt learned that Japanese games industry’s old hands can be difficult to cajole. It is well known that high-ranking Sega officials literally walked out of a meeting with the Xbox creator, leading to much humble pie-eating that resulted in a prosperous agreement between the two.
The announcement of the deal is most likely to be declared at this year’s European showcase for Microsoft, X02 in Seville on September 24.
With the cancellation of both Diddy Kong Racing for GBA and Donkey Kong for GameCube, Nintendo will already be fighting to save face. Although the initial stage of the agreement is in place, it will be interesting to see how the honour-driven Japanese spin machine paints the picture of the deal following closure. It has been suspected for some time that Nintendo has found itself drifting away from Rare. The Nintendo development consultants that were once welcomed at the UK studio became the development equivalent of prefects.
Microsoft’s front-facing press office was the only source of comment today as all other staff members were busy. It now seems that any talk of Rare is a running joke with heavily briefed staff fielding calls over and over again. After every sentence uttered on the subject, the fact that Microsoft has no comment on anything gets reiterated. By the way, the official line on the story is a flat “No comment.”
The story at Nintendo is very much the same. “No comment.”
Exactly how Nintendo’s exit will impact upon current games in development remains to be seen. We broke the fact that Perfect Dark Zero will be created for Xbox some weeks ago, and this news merely compounds that. It is thought that Rare’s Game Boy Advance production will continue as Microsoft covets that sector of the market. It’s worth remembering that Microsoft branding has appeared on GBA titles in the past. According to reports, Rare’s second party status has been terminated and is no longer recognised by Nintendo.
“We are all surprised that it took so long for news of this to break out,” said another senior UK source. “People in the financial markets have known about this for ages and have been openly discussing it over Martinis and olives. The company that has set itself up as the focal point for European games finance, you know who I mean, has been trying gain kudos for disclosing details on the deal to anyone who would listen.”
“We have been monitoring the SEC filings for Microsoft for some time as an acquisition of this size would have to be disclosed,” said a senior industry financier. “We would assume that heads of terms have been agreed and an official announcement is looming.”
We were lucky enough to speak to a source at the abnormally silent Rare today. In this exclusive chat, Rare told us that it “has no comment to make.” Further cajoling saw Rare’s Simon Farmer tell us, “It seems that everyone is buying us these days. Is it Starbucks or is it McDonalds? It must be one of them, ha ha! An announcement at X02? Never heard of it! Seriously, we have no comment to make at this time.” Even more nudging and us asking, “well, we’ll see you in Seville then produced, “Seville? Don’t know where that is!” Well, if you insist!”
We’ll bring you a full round up of all this as soon as it’s confirmed, which is more than likely to happen in Seville later this month.