In an interesting turn of events, Nintendo has announced they have decided to finally do something with their money. Perhaps they have heard our podcast and decided to step out in a big way. We just got word that the Big N has purchased the gaming division of Microsoft, most known for the XBox, XBox 360, and XBox One. Just yesterday, Microsoft announced a new head of XBox, but little did we know that they would soon be sending Phil Spencer off to be to Nintendo. Since the acquisition has gone public, the two companies have stated that they are “still working through the exact details of their future, post-merger, but they are excited about the possibilities of two of the biggest names in gaming coming together for the first time.”
Ever since last year, rumors had spread that Microsoft would sell off the XBox division. Some stated that Stephen Elop would make it his first job, if he were to become the new CEO of Microsoft. At the time, though, many were unsure if investors would approve the sale of Microsoft’s profitable gaming division. Elop did not become CEO, but it seems like the desire to sell was not original with Elop. According to people familiar with the matter, Microsoft’s new CEO, Satya Nadella, has been in private meetings with both Satoru Iwata and Reggie Fils-Aime of Nintendo for the last month.
NintendoFuse has reached out to Nintendo for questions, but they have not yet responded. We were able to reach out to more people familiar with the matter, though, despite their busy schedule of leaking news like this. They told us they were just as surprised as we were, but this has been in the talks since E3 2013, which seems to point to the reason why both Nintendo and Microsoft were off their game (pun intended) at last year’s event.
For now, we are just sitting here in shock. We never saw this coming. We have stated many times that Nintendo needed to use some of its money to get some big third-parties on board, but we never expected them to spend $30 billion plus on XBox. So, will the Wii U and XBox somehow co-exist under the same company, or will they scrap both ideas and make a new Wii One or XBox U? One thing that is almost certain: Master Chief in Smash Bros.!
UPDATE: It seems our sources, the ever-popular “people familiar with the matter” were not so familiar. In fact they were just a bunch of bloggers from NintendoFuse, trying to pose as press release authors. We hope everyone had a great April Fools Day! If you haven’t done so yet, check out our round-up of some of the best (and worst) Nintendo-related jokes of AFD 2014.
Nintendo News: Nintendo Prepares for Aquisition of Microsoft’s Gaming Division
REDMOND, Wash. –(BUSINESS WIRE)– Nintendo today announced that is has reached a definitive agreement to acquire the XBox gaming division from Microsoft Corporation for a total of $64 billion, including $8 billion in cash and approximately $16 billion worth of Nintendo shares. The agreement also provides for an additional $8 billion in restricted stock units to be granted to XBox founders and employees that will vest over five years subsequent to closing.
XBox has built a leading and rapidly growing gaming division with their XBox, XBox 360, and XBox One consoles. They have also advanced the gaming industry with accesories such as the Kinnect for XBox 360 and XBox One, which has further advanced the concept of motion-controlled gaming.
The acquisition supports Nintendo and XBox’s shared mission to bring gaming to more households, while keeping the fans pleased. The combination of both team’s efforts will help accelerate the growth of gaming and user engagement across both companies. Nintendo and Microsoft are still working through the exact details of their future, post-merger, but they are excited about the possibilities of two of the biggest names in gaming coming together for the first time. President Satora Iwata stated, “We are looking forward to creating a culture of gaming that involves waggling remotes, dancing like nobody is watching, red rings, and lots of mushrooms.”
Upon the closing of the deal, all outstanding shares of XBox capital stock and options to purchase XBox capital stock will be cancelled in exchange for $8 billion in cash and 64,646,464 shares of Nintendo Class A common stock (worth $16 billion based on the average closing price of the sixty-four trading days preceding March 31, 2014. The Class A common stock and RSUs issued to XBox shareholders and employees upon closing will represent 6.4% of Nintendo shares based on current shares and RSUs outstanding.
In the event of termination of the Merger Agreement under certain circumstances principally related to a failure to obtain required regulatory approvals, the Merger Agreement provides for Nintendo to pay Microsoft a fee of $1 billion in cash and to issue to Microsoft a number of shares of Nintendo’s Class A common stock equal to $1 billion based on the average closing price of the sixty-four trading days preceding such termination date.
Nintendo was advised by Mario & Luigi Plumbing Company, LLC, and a team of independant bloggers from NintendoFuse. Microsoft was advised by high-profile gaming research analyst for Wedbush Securities, Michael Pachter.
The worldwide pioneer in the creation of interactive entertainment, Nintendo Co., Ltd., of Kyoto, Japan, manufactures and markets hardware and software for its Wii U and Wii home consoles, and Nintendo 3DS and Nintendo DS families of portable systems. Since 1983, when it launched the Nintendo Entertainment System, Nintendo has sold more than 4.2 billion video games and more than 669 million hardware units globally, including the current-generation consoles.
The software and hardware pioneer in the creation of Microsoft Windows and Microsoft Office began their XBox gaming division in 2001 with the creation of the Microsoft XBox. Since then, they have created the XBox 360 and the XBox One all-in-one home consoles. They have also created Microsoft Windows 8, which most people have refused to use, stating that “Windows 7 was better, but at least it isn’t as bad as Vista.”
[PR via Mind of NintendoFuse]