Microsoft sets its eye on Nintendo for possible future acquisition

Xbox boss Phil Spencer describes Nintendo as the prime asset to acquire.

According to Eurogamer’s piece, a leaked e-mail chain sent in 2020 between Xbox boss Phil Spencer and CMO Chris Capossela and Takeshi Numoto revealed that Spencer wants Microsoft to acquire Nintendo and describes Nintendo as the prime asset.

Spencer goes on saying “If any US company would have a chance with Nintendo, we are probably in the best position.” Microsoft and Nintendo indeed have a good relationship; both parties signed a 10-year deal to bring Call of Duty to Nintendo Switch earlier this year. There have been rumors about bringing the Xbox Game Pass to Switch since 2019, which would elevate the handheld console to “the go-to device.”

Acquiring Nintendo would not be easy, though. Nintendo’s largest market is the Americas, contributing over one-third of the company’s annual revenue. Between 2018 and 2022, Nintendo grossed almost $22.5 billion in the region, surpassing Europe and Japan combined. The company has become the most popular gaming company in the United States, beating local giants Electronic Arts, Epic Games, and Activision Blizzard.

Nintendo’s earnings briefs show that the company has generated almost $16 billion in net sales revenue from Switch alone in seven years. According to the Q1 2023 financial report, Nintendo’s net sales for the first quarter of the fiscal year increased by 50.0% to 461.3 billion yen ($3.2 billion). Nintendo also owns the biggest IP in the world, Pokémon, along with Mario and Zelda.

Microsoft is still battling with the acquisition of Activision Blizzard. Recently, Activision Blizzard made a deal with French video gaming giant Ubisoft to sell its streaming rights in a fresh attempt to win approval from Britain’s anti-trust regulator for its $68.7 billion sale to Microsoft.

Acquiring Nintendo would surely raise concerns with competitors like PlayStation and Steam. Sony and Microsoft have been debating over Microsoft’s acquisition of Activision Blizzard last year.  The Sony side said Microsoft owning the Call of Duty franchise could hurt their console business and create an unfair marketplace, to which Microsoft replied through official channels, saying it has no plans to make CoD a console-exclusive game and even blamed Sony in paying developers to block content off Game Pass and other subscription services.

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