Bloomberg has published a sweeping oral history of how Microsoft created the original Xbox, including interviews with heavyweights like Microsoft cofounder Bill Gates and former CEO Steve Ballmer. It includes many amusing anecdotes and misadventures along the way to successfully launching the Xbox brand, including a brief and fruitless effort by Microsoft to buy Nintendo.
At the turn of the 21st century while Microsoft was exploring literally how to build Xbox and which software development partners to bring on board, the company was earnest in acknowledging that it knew little to nothing about game development. It approached the challenge humbly and honestly, which had its ups and downs, and Microsoft faced an overwhelming amount of skepticism. Nowhere was this more apparent than when Microsoft tried to make acquisitions, such as attempting to buy Nintendo.
Kevin Bachus, then Microsoft director of third-party relations, explained, “Steve (Ballmer) made us go meet with Nintendo to see if they would consider being acquired. They just laughed their asses off. Like, imagine an hour of somebody just laughing at you. That was kind of how that meeting went.”
However, Bob McBreen, then head of business development, elaborated that Microsoft had also tried to more generally partner with Nintendo in January 2000 to become the developer of Nintendo’s hardware. This has been discussed in the past, but McBreen added a bit of direct insight into what occurred: “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.”
Howard Lincoln, then chairman of Nintendo of America, merely commented that “nothing came of these discussions.”
In any case, Microsoft also tried and immediately failed to buy Electronic Arts (EA) and Square, putting Nintendo in good company. Talks to purchase Midway actually went much further, but the deal fell through because Midway evidently did not provide enough value to be worth it.
The entire oral history is worth a read, so give it a look if you have the time, especially the part where Microsoft secured a deal with Konami by having an executive drink “an entire case of Asahi tall beers and a bottle of Courvoisier shots” with a Konami executive who was a “massive drinker.”