Microsoft Tried To Buy Nintendo, But Got Laughed Out of the Room (engadget.com) 111
An anonymous reader shares a report: Somehow, it's already been two decades since Microsoft first announced the Xbox, its foray into console gaming. Specifically, the Xbox was unveiled at CES in 2001 -- to commemorate that launch, Bloomberg has published an in-depth oral history of how the console came to be. It's a fascinating read, but one particular passage stands out: details on Microsoft's efforts to secure games for the brand-new console. While the company implored third-party developers to work on the Xbox, Microsoft also considered using its considerable financial might to buy developers. And Microsoft set its sights high, approaching Nintendo about an acquisition. Microsoft was laughed out of the room, says Kevin Bachus, a director for third-party relations on the Xbox project. "They just laughed their asses off," Bachus said to Bloomberg. "Like, imagine an hour of somebody just laughing at you. That was kind of how that meeting went."
Microsoft's specific pitch did make some amount of sense. At the time, Nintendo was lagging behind Sony badly from a hardware perspective. So Microsoft figured it could take on hardware production and leave Nintendo to focus on the software. "We actually had Nintendo in our building in January 2000 to work through the details of a joint venture where we gave them all the technical specs of the Xbox," said head of business development Bob Mcbreen. "The pitch was their hardware stunk, and compared to Sony PlayStation, it did. So the idea was, 'Listen, you're much better at the game portions of it with Mario and all that stuff. Why don't you let us take care of the hardware?â(TM) But it didn't work out."
Microsoft's specific pitch did make some amount of sense. At the time, Nintendo was lagging behind Sony badly from a hardware perspective. So Microsoft figured it could take on hardware production and leave Nintendo to focus on the software. "We actually had Nintendo in our building in January 2000 to work through the details of a joint venture where we gave them all the technical specs of the Xbox," said head of business development Bob Mcbreen. "The pitch was their hardware stunk, and compared to Sony PlayStation, it did. So the idea was, 'Listen, you're much better at the game portions of it with Mario and all that stuff. Why don't you let us take care of the hardware?â(TM) But it didn't work out."
Oh well (Score:1)
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I find it humorous that Microsoft, a *software* company, assumed that they could be the experts on the hardware side of things. The XBox under the hood was essentially a stripped down PC anyway, done solely so that they could leverage their mediocre Windows and DirectX platforms and hopefully lure Windows games devs.
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The "stripped down PC" that was the Xbox was still more powerful than what Nintendo had at the time (Gamecube).
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Right, but if Nintendo WANTED to go down that path they would have.
Designing a custom PC isn't skills thats hard to find. Japan has plenty of OEM manufacturers.
But Nintendo has always had pretty specific ideas about hardware and they aren't really interested in the speed demon thing. Their much more similar to Apple in that respect. Sure they'll try and make things go fast, but theres a more holisitic vision of the system that might not align with the vision of the performance or bust people.
Actually Apple
Re:Oh well (Score:4, Interesting)
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Nintendo has not been about power since the SNES... Maybe the N64 but that was actually kinda weak, despite the hype.
Then again Gamers Nexus just benchmarked the new PS5 and found it to be about as powerful as a 5 year old PC, so apparently consoles in general are not about performance any more.
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Considering the price of consoles, how could they ever expect to compete with PCs when it comes to raw power? The only way I could see that happening is if Apple or Samsung jumped into the console game because they have the power to vertically integrate their way to a cheap yet ultra-powerful device.
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It's just interesting to note, especially because now consoles are becoming more like PCs in terms of the options they offer for graphics settings.
Used to be that consoles produced a fixed resolution video output, max 60 fps, and good games were tuned for that. Now consoles offer a variety of resolutions and options like HDR that can be toggled. Frame rates can be capped or uncapped, up to 120 fps if your display supports it.
There were also multiple versions of the last gen consoles, and for example PS4 gam
Re: Oh well (Score:2)
They can compete if the company sells the console for less than it cost then, planning to recoup the loss through game sales.
Sony did this with the ps3. It's estimated the ps3, at launch at least, cost more than 700$, which cost Sony more than 3 billions $ total.
The ps5 bill of materials seems to be around $450. If they did the same today and increased it to $700, they could make some really powerful consoles.
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Correct. Nintendo wants to sell hardware at a gain, not a loss. They also want their target platform to conform to their specifications. They typically do not like to put their IP on other peoples' hardware. It is unlikely that MS would have let Nintendo dictate to them the console design decisions that Nintendo would have wanted for their own products.
I just thought it was stupid to call out MS for being a "software" company, when MS is clearly just as able to produce hardware designs that are as good
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Sure, Microsoft has been able to more efficiently target its console hardware requirements than their competitors. If this meeting took place in 2000, the extent of their successful hardware would have been limited to the intellimouse.
Understandable why Nintendo laughed them out of the room, although in retrospect they made the wrong decision.
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Understandable why Nintendo laughed them out of the room, although in retrospect they made the wrong decision.
Wrong decision how, exactly?
From 2001-2005/6, the original Xbox slightly outsold the Gamecube, 24 million to 22 million. Playstation 2 was the dominant console of that era, at 155 million. But Nintendo also released the Gameboy Advanced at the same time, which sold 81 million units.
The Wii was the dominant console of that generation (2006-2012/13) of hardware, outselling both the Playstation 3 and Xbox 360 - 101M to 87M to 84M. And the Nintendo DS released in that generation was the second best selling game
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Yeah, Nintendo didn't fail as a result of refusing to work with Microsoft, but that's not to say they couldn't have done better while cooperating with them. Imagine how much better Nintendo could have sat in the market if they could have maintained their niche audience while also attracting AAA gaming.
It's not fun, or exciting making average copycat decisions, but it does usually work. If this strategy wasn't effective, Apple wouldn't even exist.
I will grant you the point of what would be lost to the indu
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Consoles were never about power. The business model of game consoles is fundamentally different than that of PCs. Consoles are built to a pattern over a set life cycle and feature high levels of vertical integration and manufacture optimization to lower costs as much as possible. PC's by their nature are very different, not even Apple's designs are as streamlined as game consoles.
With computers the name of the game is versatility. Not just in the software but in the platform as a whole. They are general pur
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That's kind of what I'm getting at. Consoles used to be fixed hardware and the game ran the same on all of them, the user rarely having any choice about things like graphics settings. Also games came on cartridges or CDs and were never patched or updated, no DLC.
It's very different now with 2 versions of the XBOX launching at the same time, choices for graphics settings, and many games delivered digitally with patches, DLC and the like.
To address you point though consoles used to be about power. The SNES wa
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To address you point though consoles used to be about power. The SNES was pretty strong when it launched, graphical capabilities above and beyond what most PCs and home computers of era could do. Transparency and rotation in particular were exceptional.
That's only because in 1990 "most" PC's were old gen IBMs owned by businesses. But that isn't a fair comparison. We should compare it to a contemporary gaming PC like we do today. Nobody compares the PS5 to low end SFF thin clients in an office.
When the SNES was released in Japan the 486 had been on the market for a year and by the time it reached the US it had been over two years. Of course it was true then as it is today that to have top performance you have got to pay. But it was a lot more expen
S-PPU modes 1 and 7 (Score:2)
We should compare it to a contemporary gaming PC like we do today. [...] When the SNES was released in Japan the 486 had been on the market for a year
Which PC with an i486 CPU in fourth quarter 1990 could do mode 1 (three-layer parallax scrolling) with sprites on top or mode 7 (background rotozooming) with sprites on top at anywhere near the Super Famicom's 60.1 fps?
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Of course not, mode 7 is a term unique to the SNES. Its not like ray tracing where something can or cant support it. It describes the method by which its graphics hardware created the illusion of a distant three dimensional background through manipulating sprites. Contemporary consoles had their own proprietary features that allowed similar things.
But if you want to compare tit for tat on features, the SNES ran at a lower resolution on average than gaming PCs, didn't have anything to compare with soundblast
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Which PC with an i486 CPU in fourth quarter 1990 could do mode 1 (three-layer parallax scrolling) with sprites on top or mode 7 (background rotozooming) with sprites on top at anywhere near the Super Famicom's 60.1 fps?
Of course not, mode 7 is a term unique to the SNES. Its not like ray tracing where something can or cant support it.
I was not referring to the proprietary terms. I was trying to refer to hardware texture mapping of a background under any name. This is why I took care to give the generic terms "three-layer parallax scrolling" and "background rotozooming". Neither could not be done in real time on a VGA of the time.
the SNES ran at a lower resolution on average than gaming PCs
I don't see a qualitative difference between, say, 320x200 for VGA mode 13h and 256x224 for most Super NES video modes.
didn't have anything to compare with soundblaster
The original Sound Blaster is a 9-voice 2-operator FM synthesizer and a PCM output. The S-DS
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I was not referring to the proprietary terms. I was trying to refer to hardware texture mapping of a background under any name. This is why I took care to give the generic terms "three-layer parallax scrolling" and "background rotozooming". Neither could not be done in real time on a VGA of the time.
That is proprietary. PC's weren't heavily leveraging dedicated hardware accelerator cards for graphics at this time. Your graphics card at the time merely gave you support for the resolution, color and text modes. Rendering the assets was done entirely on the CPU at this stage.
This is due to a fundamental difference between consoles and PCs. Consoles are fixed spec which means you can develop clever hardware solutions and support them. PC's as you know are all over the place and there didn't yet exist robus
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Rendering the assets was done entirely on the CPU at this stage.
I'm aware of that. What sort of frame rate could an i486DX CPU at 33 MHz, which was top of the line in fourth quarter 1990, get for CPU-driven full-screen scrolling and CPU-driven full-screen rotozooming? Or were PC games just designed around the lack thereof?
VGA superseded it in 1987 and is 640x480.
Mode 12h is 640x480. Mode 13h is 320x200, as is the closely related mode Y (which is mode 13h with a different "unchained" memory layout). Mode X is similar to mode Y with 320x240 pixels to match mode 12h's display timing. The two titles you cited, Id'
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Microsoft has been in the hardware business too as long as they have been in the "Windows" business. Most of the hardware Microsoft has put out throughout history has been pretty well regarded as well.
There are as with just about any vendor some note worthy exceptions of course but generally speaking buying hardware with a Microsoft logo on it has usually been a good bet in terms of it being nice kit.
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You say that like it was a bad thing. Using preexisting silicon from Intel and Nvidia meant for the PC market meant Microsoft was able to make a much more powerful console than the PS2 or Gamecube and still be at a competitive price. And calling DX mediocre, compared to what exactly? For all its champions OpenGL was never any better, if anything it was usually behind DX in feature set. Glide was proprietary so if you are trying to make a FOSS is better because FOSS argument it automatically fails for being
So they bought Bungie instead (Score:5, Insightful)
And thus XBox became primarily an FPS platform.
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Microsoft would have strangled Nintendo.
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Why not SEGA? (Score:5, Interesting)
They could have bought SEGA's console business. In 2001, they still had IP and name recognition (their last console debuted in 1999). And, their console business was becoming defunct under their new CEO, so it should have been a steal.
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And yet SEGA still has brand relevance in 2020 with a Sonic movie that had so much public fan objection to the initial character design shown in the original trailer that they were all but forced to concede to the will of their fans and rerender any completed scenes with an updated model that was more appealing to their (apparently vocal) fan base.
And yet, they don't make consoles anymore.
Maybe it wasn't such a bad fit after all...
Re: Why not SEGA? (Score:2)
Wouldn't be struggling with competitive hardware... Oh, wait!
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The CEO of SEGA hated consoles. Was the brand really struggling? They had about half as many sales of their final console as the GameCube, and less than half the lifespan. Of course, that might not have been known. It sold about 1/3 as much as the N64 - in about 1/3 the time
Re: Why not SEGA? (Score:2)
I had one, it was excellent. For $99 it was a steal, and once it was discontinued the games were super cheap too (used ones even before then).
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The hardware was likely sold at a loss per unit, yes. Sega wanted that sweet revenue from direct software sales of their own titles or the licensing fees from 3rd-party titles. Apparently that's what did them in: they didn't profit richly-enough from software sales.
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Yes, Sega never quite recovered after the Genesis/Mega Drive. This was due to several mis-steps where the US and Japan divisions clashed heavily leading to such wierdness as the 32X and Saturn both being 32-bit machines but completely in
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The GameCube would have been launched just after these meetings. It probably was already entering production - one major reason why MS's timing was so bad.
But Nintendo never needed great tools or great hardware to attract developers and players. So why bother with the cost and expense?
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The article doesn't mention how much was offered. That is the reason they laugh or say, "Sir, yes sir!"
A sufficiently high offer could even be a reason for a stockholder lawsuit for not taking it.
I take it Nintendo isn't publicly traded (Score:2)
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They are, and have been since 1963, they just trade on Japanese exchanges.
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They were public, with a market cap of around $20 billion. To big to buy in cash, so they would have had to be bought out in MS shares (at least in part). Which would have (in hindsight) been a much much better deal.
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Or you could, you know... not be dicks... (Score:2)
... and let anyone make games for any console with no "exclusivity" localized monopoly bullshit, and compete on merit.
But it wouldn't be the imaginary property Mafia without price gouging via monopolism and artificial scarcity, now would it?
Especially not Microsoft.
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Microsoft's business strategy seems to be:
1) Find a well established market segment where Microsoft is not a player
2) Spend a shitload of money buying your way into that market as an inexperienced noob.
3) ?
4) Wait for profits to roll in.
Ie, the model used for game consoles, mobile phones, alternative internet platforms, search engines, team meeting platforms, and others. And they end up as mediocre in all those markets, rarely making it up to even number 2.
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Nintendo would never go along with such an arrangement. They definitely wouldn't have gone along with it 20 years ago. If Nintendo can't control the underlying hardware platform and make it conform to their needs, they normally don't want to publish software for said platform. If you want to publish software for their platform, then you play by their rules.
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Whose interest would that serve? How would things like the Nintendo Wii or Switch come about if they tried to make everything cross-platform? Just because Microsoft and Sony make hardware that are practically clones of one another doesn’t mean that’s the way things must or ought to be.
I don’t play games anymore, but it still broke my heart when Microsoft bought Bethesda. But I also find it difficult to argue that a hardware manufacturer can’t make exclusive software for their machine
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I'm not sure this is necessary. Cyberpunk 2077 (and other massive franchise preorders) seem to disprove this. To say nothing of voluntary payments via tipping for patreon, Kickstarter, etc. Could do the same with movie tickets, books, etc. Distributed patronage might be sufficient.
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Of course it's not necessary for these types of luxury goods to exist, but I doubt distributed patronage would allow for the volume and quality of work that the current system produces. I'm all for distributed patronage, but I don't think it should box out the traditional system. I understand the desire for artistic control. After all, imagine if all the Star Wars nerds got together and agreed upon a script before it went into production. You'd have. . .The Force Awakens.
Kidding aside, I'm not a blind defen
no wonder they got laughed at. (Score:2)
"The pitch was their hardware stunk
Nintendo has purposely underpowered their consoles since day one. There are multiple ideas as to why but basically making cheap hardware can be an advantage because it forces companies to focus on gameplay quality. You also have to remember that Nintendo is more than just software, they are a merchandise company too. Frankly, they should have bought Sega after it declared Dreamcast as a failure. They could have gotten a good deal and some legendary game designers.
maybe Nintendo is not just in it for the money (Score:3)
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It's a nice thought, but . . . no. That really doesn't describe Nintendo as an entity. A few of their developers? Sure. That definitely would describe Masahiro Sakurai.
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If you think that, you don't understand what happened to Sakurai.
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Shame I didn't link this before, but:
https://www.youtube.com/watch?... [youtube.com]
worth a watch.
Laughed out of their own room? (Score:4)
"We actually had Nintendo in our building in January 2000 .. "
So Nintendo laughed them out of their own conference room?
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That's the wrong pitch (Score:5, Interesting)
As an aside, Nintendo was founded in 1886 to make and distribute playing cards; video games was of course a much later course change.
Re:That's the wrong pitch (Score:5, Interesting)
It's entirely wrong to approach Nintendo with the "your hardware stinks, so let us focus on that and you focus on games".
It's the entirely wrong approach altogether. Instead of trying to sell them on the first meeting, they should have spent all their effort in the meeting trying to understand what Nintendo wanted. If Nintendo didn't want anything, they wouldn't have been in the meeting.
That is the Japanese way.
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none?
Aside from the much simpler, but insanely successful, mouse, they produced a z80 card for the Apple ][ that was well regarded.
hawk
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no, that's why it says "aside from" . . .
Just a reminder (Score:3)
Nintendo USA has offices right across from the street from Microsoft headquarters in Redmond, WA. This could have been two companies, in close proximity, and could have done something. While I get the hate for MSFT, and what Nintendo's design/ideals are, I find it amusing that they were "laughed at for the whole meeting".
I have played all versions of gaming consoles going back to the ColecoVision and Atari 2600, and in 2001, some of those games on the MSFT platform, and X-Box live, would have rocked. Could you imagine GoldenEye on the web (not just on the local network)?
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I loved me some Montezuma's Revenge! Zip, dun da da dun ta!
Nihonjin wa Microsoft o Waraimasu ka? (Score:3, Interesting)
I've been studying Japanese, and casually studying Japanese culture, and I'm not familiar with this "laughing them out of the room" kind of behavior.
So much of Japanese culture is about being polite, saving face, "tatemae." [jisho.org]
So it's almost unbelievable to me that Japanese dignitaries from Nintendo would laugh at Microsoft for an hour in response to Microsoft's presentation.
I would think, if anything, that they would exchange looks with one another rather quickly, and say something like, "Thank you so much for your interest; We will carefully consider your offer," or "What you are proposing would be extremely difficult," in the most severe.
So I am really curious about what went down in that room, and I'd love to find out how I'm wrong.
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So much of Japanese culture is about being polite, saving face,
Look at this quote from the article:
"The pitch was their hardware stunk"
If Microsoft started out by insulting the Japanese. Concepts of "saving face" have gone out the window, and the Japanese could have easily responded with a condescending laugh. Microsoft didn't understand what the Japanese were thinking, and by laughing the Japanese showed that.
Wouldn't need to meet now (Score:1)
Re:Wouldn't need to meet now (Score:4, Insightful)
Something needs to be for sale for you to buy it. Even if you have the money. Nintendo is a cultural prize to the Japanese, and it's unlikely the family would ever sell it, especially to a US entity like Microsoft.
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And yes, Microsoft was hilarious... (Score:1)
Claiming expertise in hardware development. It's not great at Software development, but at least that's its main skill.
Windows everywhere (Score:2)
Microsoft's history is odd.. because I distinctly remember that they had some interesting research projects in 1995 like:
1. WebTV - sounded odd at the time with such low bandwidth
2. Tablet computers
Ballmer somehow was able to completely fall behind in those areas they had spent considerable research on and not even be a player.
Today XBoxes live in front of many TVs, but where is the "WebTV"? Oh yeah, Netflix did that.
A company that didn't even exist when Microsoft was researching it.
Ballmer really deserved
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Microsoft's history is odd.. because I distinctly remember that they had some interesting research projects in 1995 like:
1. WebTV - sounded odd at the time with such low bandwidth
2. Tablet computers
Ballmer somehow was able to completely fall behind in those areas they had spent considerable research on and not even be a player.
Today XBoxes live in front of many TVs, but where is the "WebTV"? Oh yeah, Netflix did that.
A company that didn't even exist when Microsoft was researching it.
Ballmer really deserved to get fired.
But still today the XBox has not replaced the VCR or the cable box. So strange. Seems much more compelling than Apple TV.
Steve Ballmer's well known antics and personality were never things of which I was a fan, but at a decision-making level, I'll take him over Satya Nadella any day. First off, let's address your two examples, because yes, they sound ridiculous now, but putting them into historical context (and addressing some inaccuracies), they make a hell of a lot more sense.
If you start with an iPad and take away the App Store, Wi-Fi (and the broadband internet connection that powers it), lightweight battery technology, m
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Thanks for the info.
I do think MS could have had a better presence in the living room though. The XBox could easily take over the cable box.
As for Ballmer. I think Nadella has just recognized that Windows lost is hegemony. Today developers are in the Cloud. Amazon was taking them all. Azure is critical to keep developer developing for Microsoft. Which has always been the MS strategy.
Premium tier beats enterprise (Score:2)
Microsoft makes things that companies buy.
Companies DO NOT buy video games.
Also, Nintendo (like Target, Disney, Apple) is a premium brand, while Microsoft might price their stuff like they are preemo, but they are anything but.