Microsoft tried to buy Nintendo, but got laughed out of the room

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?’ But it didn’t work out.”

While this is certainly the most notable of Microsoft’s failed acquisitions, there were a few other notable developers who passed on the company’s overtures. EA was the first company that Microsoft reached out to; the software giant passed with a more simple “no, thanks.” Microsoft also was meeting with Square (now known as Square Enix) and Mortal Kombat developer Midway.

One acquisition that did go through gave Microsoft what’s been the flagship franchise for the Xbox since day one. At the time, Bungie was a little-known developer, but Halo: Combat Evolved arrived alongside the first Xbox in November of 2001 and was met with immediate acclaim. It’s not a stretch to say the game gave the Xbox immediate legitimacy and helped it carve out a significant chunk of the gaming market despite the dominance of Sony and Nintendo. For more on how the first Xbox came to be, Dina Bass’s oral history at Bloomberg is a must-read.