“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.”
Bloomberg's latest report on Microsoft's Xbox history might get a laugh out of you or two. When Microsoft decided to launch Xbox in the early 2000s, it was entering a Japanese-dominated video gaming and console field. To say the competition it faced was ruthless is an understatement. Microsoft wondered if buying in could be the answer.
Even then, despite hurdles and cutthroat rivalry from Sony and Nintendo, Microsoft dreamed big. Maybe a little too big. The company's director for third-party relations for Xbox, Kevin Bachus, outlined how Microsoft once made an acquisition offer to Nintendo, which today enjoys jaw-dropping success today with the Nintendo Switch and titles like Animal Crossing: New Horizons.
In response to Microsoft's approach, Nintendo executives reportedly laughed for "an hour." That's gotta hurt.
Steve Ballmer, the former CEO for Microsoft, sent Bachus and others to make the pitch. "Steve made us go meet with Nintendo to see if they would consider being acquired," he recalled. "They just laughed their asses off. Like, imagine an hour of somebody just laughing at you. That was kind of how that meeting went."
Electronic Arts was a little more polite, simply saying "no, thank you" to their offer. Either way, the Xbox — originally named the Windows Entertainment Platform — has come a long way. Even Dwayne "The Rock" Johnson, who stood next to Bill Gates at the launch of Xbox at the Consumer Electronics Show in 2001, will agree.
Eyes on the prize — Microsoft's main business, the Windows operating system and the Office suite of software, were not exactly video gaming material. Sure, you could play Pac-Man on your PC, but people were increasingly turning to consoles for lengthy and complex video gaming. As Bloomberg reports, the company was already partially impressed and partially threatened by the success of Sony's PlayStation and Nintendo's gaming empire.
Microsoft decided to work on creating a gaming console that had to be so addictive, it would become a living room staple. It took a great deal of investment, focus groups, debating the architectural aesthetics and features of a console, and more ordeals — including plenty of infighting — and a team of some 2,000 workers to finally bring Xbox to public light.
And while getting laughed out of a meeting by Nintendo sounds brutal, it seems like everything worked out for both companies. Microsoft has an unmistakably popular console in the market. As for Nintendo, it lucked out by laughing the acquisition pitch off. Today its Switch is a wildly popular gaming accessory, especially during the COVID-19 pandemic, having sold at least 3.3 million units in the first three months of 2020 alone. Talk about having your previous decision vindicated.