Microsoft adds Rare to its exclusive mix

First Xbox title from partnership due this spring.

By Ann Donahue -- Video Business, 9/25/2002

(From l.) Rare's Chris Stamper, Microsoft's Ed Fries, Rare's Tim Stamper and Microsoft's Sandy Duncan celebrate the big deal in Seville, Spain.

SEPT. 25 | Microsoft Corp. confirmed Wednesday that it has bought British videogame developer Rare Ltd. for $375 million in cash from Nintendo and founders Chris and Tim Stamper (VB Online, 9-11).

The deal comes weeks after sources close to the negotiations said Nintendo passed on an option to buy out the 51% of Rare it did not own. Rare is the developer of popular titles including GoldenEye, Donkey Kong Country and Perfect Dark, and averages sales of 1.4 million units per title.

"The last time I was this excited was the first time I picked up a controller and played a game from Rare," said Ed Fries, VP of Xbox game content at Microsoft. "As a gamer, you could hardly wait until Rare's next title was announced. You didn't know what genre it would be, but it didn't matter because you knew you were going to love it."

Nintendo will retain the rights to all original properties created by Rare. From here on out, however, Rare will only produce titles exclusive to the Xbox.

Microsoft has been searching for more exclusive, breakout titles for its console in addition to Halo.

The Stampers and their staff will continue to work out of Warwickshire, England. The first title out of the new partnership will be Kameo, a project that Microsoft is keeping under wraps except to say it will launch next spring.

Rare is expected to develop five games for the Xbox during the next two years, including racing and shooting games.

"This partnership significantly broadens our already outstanding portfolio of games that will be available for Xbox," said Chief Xbox Officer Robbie Bach. "And it also broadens our reach internationally as gamers around the world have demonstrated their fanaticism for what Rare consistently produces."

The last game to come out of the Rare-Nintendo partnership is Star Fox Adventures, which hits store shelves this week.

Last week, Nintendo noted that Rare's percentage of the company's revenue has dropped in recent years from 9.5% in 2001 to 1.5% in 2002.

"Although we declined the opportunity to continue our exclusive agreement with Rare, this announcement does not diminish our respect for their work or the past contributions they have made to Nintendo," said Peter MacDougall, executive VP of sales and marketing for Nintendo of America.

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