40 years ago today, on July 15, 1983, Nintendo launched its first home video game console in its native Japan. It was named the Family Computer (FC), but it was quickly referred to as the Famicom. A few years later, a redesigned version of the Famicom launched in the US as the Nintendo Entertainment System.
While consumer game consoles launched in the US in the late 1970s, the video game crash of the early 1980s caused some people to think that home video games were just a brief fad. The success of the NES proved otherwise and the video game console business has since matured into a massive entertainment industry.
Ironically, the 40th anniversary of the NES launch in Japan may be just a few days away from the single biggest video game and PC acquisition in history. Microsoft currently has until July 18 to acquire Activision Blizzard for $69 billion (although it's looking more likely now this deadline could be pushed back to later this month).
Microsoft first decided to go into the video game industry with the original Xbox, which launched in November 2001. After Microsoft co-founder Bill Gates and then CEO Steve Ballmer officially gave the Xbox team the thumbs up to start working on the console, the team thought about acquiring other game publishers to beef up the Xbox's launch library.
Most famously, Microsoft made a serious pitch to Nintendo to try to buy the company. That was first revealed in 2021 in a Bloomberg article that we reported on at the time. In short, Bloomberg got Kevin Bachus, Microsoft's former director of Xbox third-party relations, to admit that Ballmer made them go to Nintendo to see if they would like to be bought. Bachus said that instead, "They just laughed their asses off." Ouch.
In November 2021, to celebrate the original Xbox's 20th anniversary, Microsoft created a web-based museum that looked back at the creation of the console. That site is no longer live, but Eurogamer managed to preserve an internal email posted on the site. It's from October 1999 and it showed Microsoft's deep interest in buying Nintendo.
Unfortunately, that image has some green and black words obscuring the majority of its text. However, we can see that the letter was written by Microsoft's former Xbox hardware leader Rick Thompson to Jacqualee Story, the former EVP of business affairs at Nintendo of America. In that letter, Thompson wanted Story to help arrange a meeting with Nintendo's main executives in Japan to talk about a "possible strategic partnership between Nintendo and Microsoft on future video game platforms."
It would appear Microsoft was thinking about a deal where it would help create the hardware for a new Nintendo console, while Nintendo would make the games. This would apparently be separate from Microsoft's own Xbox console. Obviously, such an arrangement was not made.
That same Bloomberg article also talked about Microsoft's other attempts to buy publishers before the launch of the first Xbox console. Electronic Arts was at the time the biggest third-party game publisher, so of course Microsoft would have loved to have bought it to secure some huge franchises for Xbox (sound familiar?).
However, according to Thompson, their meetings with EA did not go well:
So I go in and meet with the CEO of EA (Larry Probst). First off, he’s like, “Who the hell are you? I’ve talked to Microsoft people forever, and I’ve never met you before.” And then I said, “Console,” and he said, “You guys don’t even know what it is to make a console. You have no clue.” I came back from that meeting going, Ah, that didn’t go so good.
Bloomberg also stated that Microsoft tried to buy Square Enix in 1999 (back when it was just known as Square). However, the company rejected the deal because it felt Microsoft's offer was not high enough. The article also stated that Microsoft seriously considered buying Midway during this period.
In the end, Microsoft's biggest acquisition before the launch of the first Xbox was with a much smaller game developer. In June 2000, Microsoft announced it had bought Bungie, the developer of games like Marathon and Myth. The developer wowed the crowd at Steve Jobs' Macworld event in 1999 with a demo of its sci-fi action game Halo. That Microsoft acquisition, and the company's decision to make Halo an Xbox launch title, ended up being a much bigger return on investment than predicted.
Now, as Microsoft seems to be very close to getting Activision Blizzard, we do have to wonder what might have happened if the company had succeeded in buying Nintendo. It certainly would have made the video game industry much different than where it is right now.