The Xbox game console is the subject of a Bloomberg article entitled “Xbox: Oral history and an American video game empire” that explores Microsoft Corporation’s (NASDAQ: MSFT) decision to enter the game – and some failed acquisitions.
What happened: Before launching the Xbox console, Microsoft approached several gaming companies about acquisitions so that they could have exclusives to compete against Sony Corporation (NYSE: SNE).
Microsoft addressed Electronic Arts (NASDAQ: EA), considered one of the biggest gaming companies of the time. Microsoft has met with Electronic Arts more than five times, but left empty-handed in a deal, the report said.
After failing to acquire Electronic Arts, Microsoft turned to Nintendo Co (Pink: NTDOY).
“They just released their asses. Like, imagine an hour of someone laughing at you. That’s how the meeting went, ”said Kevin Bachus, who was Microsoft’s director of third-party relationships at the time.
Microsoft met with Nintendo again in January 2020 to launch the company into a joint venture. The argument was that Nintendo was not good at hardware, but it was strong in the gaming business with Mario and other brands. Microsoft said it would take care of the hardware. Nintendo also declined the joint venture.
Microsoft also tried to acquire Square, now known as Square Enix, creator of the “Final Fantasy” franchise, and Midway, known for its “Mortal Kombat” games.
The acquisition that was completed by Microsoft before the launch of the Xbox was from Bungie, the makers of the popular “Halo” franchise. Microsoft acquired Bungie and was able to enjoy the success of the exclusive “Halo” games for many years.
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Because it’s important: Exclusive games can be an important differentiator for video game consoles. The success of Playstation 5 may be partly due to exclusives like “Spider-Man: Miles Morales” and “MLB The Show”.
Microsoft acquired ZeniMax Media in 2020, which gives it control over franchises like “Dishonored,” “Fallout”, “Doom” and “The Elder Scrolls”. The company could launch exclusive titles to complement its “Halo” games and compete better with Sony.
Microsoft may have failed 20 years ago to acquire any of the aforementioned companies, but Xbox was a hit for the company, and now Microsoft has a billion-dollar game division annually.
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