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Activision and Nintendo were involved in Rare bidding war, former Microsoft exec recounts

Activision and Nintendo were involved in Rare bidding war, former Microsoft exec recounts
Alexander Sliwinski
Alexander Sliwinski|@Sliwinski|October 27, 2010 1:00 PM
A classic industry tale of "D'oh" tells of how Activision missed an opportunity to buy Blizzard on the cheap a decade before the $18 billion merger. Here's the opposite tale: In 2002, it seems Activision dodged a bullet by losing out in a bidding war to purchase Rare. Microsoft ended up being the fish that took the worm -- for $375 million -- and the rest has been ... well, let's just say that Rare hasn't lived up to the high expectations set by the studio's independent successes (despite having settled into a key role in the Microsoft Game Studios family).

In an interview with Develop, Ed Fries, former Microsoft VP of game publishing, revealed that Activision was close to a deal to secure Rare, but that Microsoft ended up offering more. Fries also shared that Nintendo was involved in the bidding war, further inflating an eventually outrageous price for the developer. At the time, Nintendo owned half of Rare, so if Microsoft had bid low, the House of Mario could have easily taken control of the entire studio. "So, there's a problem: If we drive a hard bargain and put in a low price for Rare, Nintendo would have the chance to buy at that low price and probably would," Fries reasoned. "So, the price was high."

Unfortunately for Fries and Microsoft, they did not heed Kenny Rodgers' sage advice: "You got to know when to hold 'em, know when to fold 'em, know when to walk away and know ... when to run."
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