Xbox Wants to Buy Nintendo

Microsoft tried to buy Nintendo in 2000. 20 years later, in 2020, it was interested in buying it again, but right now the deal is not on the table. It's unclear if Microsoft retains this interest, but it presumably does, as Xbox boss Phil Spencer describes "getting Nintendo" as a "career moment" for him. So, what's the hold up? Well, Microsoft has the money to pull it off, but it sounds like Nintendo -- who is sitting on a mountain of cash and doing better than ever -- isn't interested. And it's hard to see this changing. 

How do we know all of this? Well, some official documents from the FTC vs Microsoft case involving the later's acquisition of Activision Blizzard have leaked. And these documents included an email from Phil Spencer spilling the beans on his desire to acquire not just Nintendo, but WB Games. 

"Takeshi, I totally agree that Nintendo is THE prime asset for us in Gaming and today Gaming is our most likely path to consumer relevance," reads the email. "I've had numerous conversations with the LT of Nintendo about tighter collaboration and feel like if any US company would have a chance with Nintendo we are probably in the best position. The unfortunate (or fortunate for Nintendo) situation is that Nintendo is sitting on a big pile of cash, they have a BoD that until recently has not pushed for further increases in market growth or stock appreciation. I say 'until recently' as our former MS BoD member ValueAct has been heavily acquiring shares of Nintendo and I've kept in touch with Mason Morfit as he's been acquiring. It's likely he will be pushing for more from Nintendo stock which could create opportunities for us. Without that catalyst I don't see an angle to a near term mutually agreeable merger of Nintendo and MS and I don't think a hostile action would be a good move so we are playing the long game. But our BoD has seen the full writeup on Nintendo (and Valve) and they are fully supportive on either if opportunity arises as am I."

The email continues: "Confidentially we have two fairly active M&A discussions in Gaming right now, Warner Brothers Interactive and ZeniMax. I took ZeniMax to the BoD last week and prior to the BoD discussion I asked Amy and Satya if they wanted me to slow either or both of these given the TikTok discussions and they both emphatically told me 'no.' They are fine doing all three of these if the deals make sense. I won't say WB or Zeni is Nintendo but both are for sale and gettable by us if things align. Biggest obstacle in WB is IP ownership, we wouldn't own any of the IP which hurts long term flexibility and the only obstacle on Zeni is valuation expectations of founders. But I think it's likely one or both of these happen which will help us continue to double down on our Gaming relevance. To give a sense of scale, ZeniMax is about the size of our current first party studios org, so that would be doubling our content asset. Downside is it's more core, less broad, not mobile, more north American/European etc. I love this discussion and value you looking at the opportunities here. At some point, getting Nintendo would be a career moment and I honestly believe a good move for both companies. It's just taking a long time for Nintendo to see that their future exists off of their own hardware. A long time...."

As noted, it's very unlikely Microsoft can acquire Nintendo at the moment without a hostile takeover that would go down terribly in the court of public opinion. Meanwhile, it doesn't seem like WB Games is for sale anymore like it was a few years ago. In other words, don't expect anything to come from this, especially in a post Activision Blizzard acquisition world.