2021 marks the 20th anniversary of the Xbox, and to celebrate the occasion, Bloomberg spoke with more than 20 people involved with the creation of the console. It’s a fascinating read that is stuffed with interesting insight, one part of which was that Microsoft wanted to collaborate with Nintendo, and potentially even buy the Japanese company.
Former head of business development at Microsoft, Bob McBreen, said Microsoft reached out to a number of companies to discuss an acquisition many years ago, the first of which was Electronic Arts. They said “no thanks,” according to McBreen. Nintendo also declined to get acquired, and the meeting apparently did not go so well.
Former Xbox executive Kevin Bachus said then-Microsoft CEO Steve Ballmer told senior staff they needed to travel to Japan to speak to Nintendo about a potential sale.
“Steve 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,” Bachus said.
That wasn’t the end of the story, however, as McBreen said Nintendo executives came to Microsoft’s headquarters in January 2000 to talk about a “joint venture” where Microsoft shared the technical specs for the Xbox with the Mario company. The idea was for Microsoft to handle the technical side of making a console, with Nintendo working on the “game portions.”
“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,” McBreen said.
Also in the piece, it is re-confirmed that Microsoft pushed to acquire Square before the launch of the Xbox and years before Square merged with Enix to form Square Enix. In November 1999, Microsoft’s executives traveled to Japan to talk about a sale with Square’s CEO and Microsoft’s top boss, Steve Ballmer.
Microsoft had a letter of intent to buy Square, McBreen said, but the deal never came to be.
“The next day, we’re sitting in their boardroom, and they said, ‘Our banker would like to make a statement.’ And basically, the banker said, ‘Square cannot go through with this deal because the price is too low.’ We packed up, we went home, and that was the end of Square,” he said.
It is also reported in the piece that Microsoft sought to purchase Midway, the makers of NBA Jam and Mortal Kombat. Microsoft “couldn’t figure out how to make it work,” Bachus said.
“We couldn’t figure out how to make it work because we’d immediately get them out of the PlayStation business, and we didn’t need their sales and marketing group, and so that left us with not a lot of value,” he said.
You should go read the full piece at Bloomberg, as it shines a light on numerous other topics related to the origins of Xbox. Xbox is a huge brand today that is successful and popular, but Bill Gates was not convinced at the start. Xbox executive Ed Fries is quoted in the piece saying of an early meeting about Xbox, “Bill throws the PowerPoint deck down on the table and says, ‘This is a f***ing insult to everything I’ve accomplished at this company.”
