In 1999, Microsoft was interested in entering the gaming industry in order to execute its “living room strategy” and stop the invasion of Sony’s PS (PlayStation) console in the computer field, so it first proposed the idea of acquiring Nintendo to the then Nintendo of America president Minoru Arakawa (the son-in-law of the third-generation Nintendo president, Pu Yamauchi).
In 2000, then-Microsoft CEO Steve Ballmer had the then-small Xbox team meet with Nintendo to see if they were interested in being acquired, as recalled by Kevin Bachus, Xbox’s director of third-party relations. “Nintendo just laughed their asses off. Like, imagine for an hour these people just laughing at you. That’s how that meeting went.” Bachus said.
At the time, Microsoft, which was trying to enter the game industry with money in hand, was described as “whimsical” in every way, and even requested that it stop developing its own consoles after acquiring Nintendo altogether, and instead develop games for the Xbox, which Pu Yamauchi described as “not understanding the game industry”.
However, many people did not expect that 20 years later, Microsoft would once again consider the “amazing feat” of acquiring Nintendo.
Those who are concerned about the game industry should know that Microsoft’s acquisition of Activision Blizzard has been subjected to strict scrutiny by regulatory agencies in many countries, and in recent times Microsoft has been required to submit relevant confidential documents to the U.S. Federal Trade Commission (FTC).
Just recently, Microsoft uploaded a large number of confidential documents into the public domain in a misstep, including new ideas for acquiring Nintendo and V (Valve, Steam’s parent company), plans for a new Xbox console, upcoming games, and a slew of internal emails.
Gamers are probably more shocked by the idea of Microsoft buying Nintendo and V than Activision Blizzard.
According to leaked documents, Microsoft Xbox head Phil Spencer expressed his interest in acquiring Nintendo in an email exchange with Takeshi Numoto, Microsoft’s executive vice president and chief commercial officer. Originally discussing the acquisition of TikTok’s U.S. business, Numoto volunteered why Microsoft wouldn’t go after a company like Nintendo.
PS: In 2020, when the U.S. government declared that it was considering “banning TikTok,” Microsoft released an official statement saying that after discussions between Microsoft CEO Satya Nadella and President Trump, Microsoft was prepared to continue negotiations to acquire TikTok in the U.S., with the goal of completing the negotiations by September 15th. (The latter ended without a hitch.)
Spencer actually endorsed Numoto’s idea and said he was committed to buying Nintendo. He believed that if he could push Microsoft to acquire Nintendo, it would be the pinnacle of his career. And in Spencer’s opinion, Microsoft’s acquisition of Nintendo would be a win-win move for both companies, and Nintendo’s future shouldn’t be limited to its own hardware platform.
Intriguingly, Spencer also emphasized that ValueAct, a former key member of Microsoft’s board of directors, has been acquiring a large amount of Nintendo’s stock, which could ‘create an opportunity’ for it, and that Microsoft’s board of directors would give its full support regarding the acquisition.
Spencer understands that Microsoft wants to buy Nintendo is not an easy task, how to convince the other side is one aspect, and considering that Nintendo is also sitting on a huge amount of cash, any hostile takeover is not a wise move, in the short term if there is no major opportunity to buy is unlikely to be a success.
Compared to the acquisition of Nintendo, Microsoft has not yet seen more specific ideas for the acquisition of V, but the Xbox business and Steam are likely to produce more direct and greater synergies. Steam’s influence on PC players around the world has been self-evident for a long time, as the largest digital distribution platform in the field of PC gaming, countless players have chosen to buy games on Steam, and Steam has accumulated a large number of developers and gamers. Steam has also accumulated a large amount of supporting software for developers and players.
But whether it’s the acquisition of Nintendo or V, it’s destined to cause a huge change in the landscape of the gaming industry, even more so than Activision Blizzard. In other words, Microsoft’s acquisition is bound to attract even more scrutiny from regulators, and considering that Activision Blizzard is having such a hard time moving forward with its acquisition, it will be even harder for Microsoft to acquire Nintendo and V.
Considering that the Xbox Series X/S releases in 2020, it’s not just Nintendo’s new console that’s actually a concern, but also gamers who have been concerned about when Microsoft’s half-generation upgrades and even next-gen consoles will arrive.
In this leaked document from Microsoft, a roadmap for Xbox consoles in April 2022 has been leaked, showing that Microsoft plans to launch half-generation upgraded consoles in 2024, and a whole new generation of “next-generation hybrid gaming platforms” in the 2028 fiscal year.
Two of the half-generation upgrades will be a high-end console codenamed Brooklin, replacing the current Xbox Series X, and an entry-level console codenamed Ellewood, replacing the current Xbox Series S. The new consoles will have the same core performance as the current Xbox Series S, but will have the same core performance as the current Xbox Series X.
The core performance of the two new consoles will remain the same, with upgrades focusing on better wireless capabilities; expanded internal storage; a refurbished exterior design, with the Xbox Series X featuring a cylindrical design; and a new gamepad with gyroscopic acceleration support, which is expected to be released by the end of this year.
By the way, neither of the two new consoles will come with an optical drive; Microsoft said in the document that the new consoles will go all-digital, just like the Sony PS5 Digital Edition, which doesn’t support the loading of game discs and can only be purchased and downloaded via subscription or in digital stores. And for now, the Xbox Series X is equipped with a Blu-ray drive.
Pricing remains unchanged, with the two new consoles maintaining the current $499 and $299.
Meanwhile, Microsoft is also planning a ‘next-generation hybrid gaming platform’ that will combine local and cloud computing to ‘enable performance beyond the capabilities of the hardware itself’.
In terms of chips, the CPU is not only considered AMD Zen6, but also ARM64; the GPU will be co-designed with AMD or designed on its own based on AMD licenses (Navi5 core). In addition, the new Xbox will support technologies such as forward-compatible and next-generation DirectX ray tracing, dynamic global illumination, machine-learning-based super-resolution and micro-polygon rendering optimization.
What’s more, according to Microsoft’s plan, the next-generation Xbox console will allow for the ‘complete convergence’ of cloud gaming platforms and physical hardware to provide ‘cloud hybrid gaming’, potentially becoming a transitional route before the arrival of cloud gaming, or even a completely new evolutionary route. Additionally, Microsoft has included a reference to ‘consumer-grade or handheld devices’ under $99, allowing gamers to use some sort of handheld device to play cloud-powered games.
As of now, the next-generation Xbox is still in the hardware design phase, but if Microsoft is still on track with last year’s plans, we should see the next-generation Xbox go on sale in Microsoft’s fiscal year 2028 (natural year June 2027-June 2028), with a focus on cloud-converged gaming.
In addition to the above, the leaked document actually mentions a number of games that are scheduled for release before the 2024 fiscal year: The Elder Scrolls 4 Annihilation remastered, Doom Year Zero and DLC, Fallout 3 remastered, Shame 3, and more.
This Microsoft leak is arguably one of the biggest leaks the gaming industry has ever seen, but it’s something that Microsoft will have to break its teeth on – and swallow back.
According to an order shared by the FTC, the responsible party for this leak was identified as Microsoft itself. The court had previously asked all parties involved to submit a link to a secure cloud containing the deleted information for public access. Microsoft voluntarily provided this link on September 14, but it contained a significant amount of non-public information.
By the time Microsoft responded back, notified the court and quickly deleted the files, they had already circulated on the Internet, causing irreparable damage.
Interestingly, the FTC’s order also mentions that this week Microsoft will resubmit the much-disputed evidence, this time with a written certification signed by all parties confirming that all content has been reviewed and contains only public information.