MS spent $400 million on Rare: Is Bill Gates on crack?

[SpoDaddy]

Everyone's been calling Nintendo cheap for letting Rare go, and wondering how this happened. Now that we have the figures and details, the answer is simple: Microsoft must be run by chimps. Microsoft justifies it's purchase by saying "On N64 Rare games generated nearly 1 billion dollars in sales". Let's break this down: On a system with almost no competition software wise, funding and development help from people like Shigeru Miyamoto, and full use of Nintendo's golden money printing press franchises, and a market tailor made for their type of games, Rare grossed nearly 1 billion over 6 years. 1 billion forgetting about development costs, production costs, advertising costs, ect. Now let's look at how Rare's non-Nintendo licensed games sold: Aside from Goldeneye and the Banjo games, they all sold relatively poorly. Let's look at Rare on Xbox, a system with competition from every 3rd party: How many Xbox gamers are going to buy a Banjo game? How many Xbox gamers are going to buy a cell shaded Perfect Dark FPS when stuff like Halo 2 (and probably Halo 3 by the time PD gets released) are on the system, considering the game didn't even sell well on N64? Conker? A 3d platformer that tanked on the console for 3d platformers. $400 million? Now, let's look at it from Nintendo's perspective: Spend $200 million dollars to keep Rare, or let them go, make $200 million dollars profit, and take that profit and start Game Dudez or whatever new development house the way they started Retro studios, and with that 200 million handpick the best of the best programers, designers, ect. and let them replace Rare. Or invest the 200 million into your other second parties, into scoring exclusive content from 3rd parties, the possibilities are endless. My point is this wasn't just Nintendo penny pinching as we all thought, Rare is not worth anywhere's near 400 million dollars. And the Stamper bros. over at Rare tried to force Nintendo into buying them out for a cool 200 mil, we all know Nintendo doesn't get bullied around. Just ask Square how many bj's they had to give Yamauchi before he'd let them make their crappy RPG's on Nintendo hardware again.

[GameFreak]

First Rare, Sega next.

Yes!

Microsoft has a plan for the powerful xBox.

I like it.

[xS]

Maybe they did it to slow Nintendo down?

[cka]

Who cares. To microsoft, that's money from the burning pile infront of the fireplace.

[SpoDaddy]

My point is that paying 400 million for Rare is insane, we all thought until now that Nintendo was just pinching pennies. Nintendo's not stupid, they know it wasn't the Rare logo that sold the games, it was the Nintendo logo. And the majority of Rare's original games on N64 tanked, they were quality games but they still tanked. Nintendo could easily put together a new development house the quality of Rare for the 200 million they made in selling their Rare stock. And keep in mind Nintendo didn't choose to dump Rare, the Stamper brothers that held majority stock in Rare gave Nintendo the ultimatum "buy us out or cut us loose". Nintendo had the choice of spending 200 million to keep them or making 200 million to let them walk, it was a good decision. I have no clue why Microsoft felt Rare was worth 400 million dollars, if Rare original content couldn't sell on the N64 it can't sell on ANY system. Companies like Acclaim and Midway made a killing selling bad N64 games, because there just wasn't any competition. Conker sold under 50,000 copies on N64, on Xbox think of how many copies it'd sell. Probably enough to make Crazy Taxi 3 look like a blockbuster success.

[Sl1p]

Spoo: My thoughts exactly. Nintendo is much better off without them. Sure, I'll miss Perfect Dark (Yes, I hate the redesign, but if it's anything like the original, I'm happy) but still, that isn't worth $400 million in the slightest. Even if it did matter to MS, they're never going to see that money comming back to them from Rare. The XBox audience obviously dosen't care about stuff like Banjo and Conker, considering that most XBox fanboys consider their system to be "adult" and Nintendo to be "kiddie". Only time will tell for sure, but I'd put my money on MS someday regretting this.

How many Xbox gamers are going to buy a cell shaded Perfect Dark FPS when stuff like Halo 2 (and probably Halo 3 by the time PD gets released) are on the system, considering the game didn't even sell well on N64?

So true, they aren't called Rare for nothing. That whole rumor though about them releasing 5 games in 2 years scares the hell out of me. It usually takes Rare YEARS just to make 1-2 games, but to make them crank out 5 games in 2? Uhhh....whoa, say goodnight to quality control.

[Ragnarok the Red]

Yes, I'd imagine this is probably about how the actual negotiations went

[SpoDaddy]

Hehehe, that cartoon is hilarious. But keep in mind Nintendo does still have Silicon Knights, Camelot, and Retro. The cartoon would be even funnier if Nintendo guy had those but said "Nah, I want to keep those, they're going to be releasing stuff next year"

[EightBit]

You all act like Banjo and Conker will be the only types of games released by Rare on the box.

I get the feeling that MS will "persuade" the cats at Rare to branch out into other genres, and styles. Just like Nintendo, I'm sure, "persuaded" them to make games like Conker and Banjo.

Z-roe

[burgundy]

Originally posted by cka
Who cares. To microsoft, that's money from the burning pile infront of the fireplace.

Ummm, wrong. I hate this argument. I may have $2K in the bank, but I still bitch if I lose a $20 bill. MS is what is today from making money, not burning it.

That said, MS is in this for market penetration, not profits. In that context, the Rare deal might make more sense. But $400 million still seems like a stupidly high amount.

Originally posted by Z-roe
You all act like Banjo and Conker will be the only types of games released by Rare on the box.

I get the feeling that MS will \"persuade\" the cats at Rare to branch out into other genres, and styles. Just like Nintendo, I\'m sure, \"persuaded\" them to make games like Conker and Banjo.

Z-roe

And then kiss the franchise recognition goodbye. Then Rare is just another developer, just with a ridiculous price tag. Now, I love Rare, but most people won\'t know the difference.