The blog StreetInsider.com suggests that the holiday success of the critically-acclaimed Nintendo Wii game console could put the Japanese game maker in play. It is an intriguing idea.
However, the blog fails to look at the barriers to a deal. Only one of the potential Nintendo suitors — Apple Computer — isn't in the video game market. The other two, Microsoft and Sony, are Nintendo's chief rivals. Acquiring Nintendo would create a problem for Microsoft and Sony.
Any Microsoft or Sony acquisition of Nintendo would be for its moustache-wearing plumber Mario and the company's other intellectual properties, but not for the Wii. Contrary to the blog's suggestion, odds are Microsoft or Sony would discontinue the Wii — Sony would also discontinue the DS portable console in favor of its PSP — because it would become too expensive to support two home consoles even if the Wii were cheaper than the PlayStation 3 or Xbox 360. Both the Wii and the acquiror's machines would not only compete for buyers but also game titles meaning Microsoft or Sony would have to split its internal resources.
As for the suggestion of Apple buying Nintendo, StreetInsider fails to realize that Steve Jobs is averse to large acquisitions. Few of Apple's acquisitions break the bank because Jobs prefers to develop technologies internally rather than buy them. A purchase of Nintendo could cost Apple as much as $32 billion, according to StreetInsider. Plus, it was Jobs upon his return in 1997 who canned Apple's one attempt to enter the game business with its ill-fated Pippin game console introduced in 1995. If you are unfamiliar with it, don't worry, it was a huge flop that saw almost no retail shelf space. Of course, Jobs has canned a number of products only to revisit a similar concept at a later date like the ill-fated Mac Cube which in a sense begat the Mac Mini a few years later.
However, the Wii's unique motion sensing interface — not to mention the DS handheld's unique-for-gaming pen interface — fits Jobs' "Think Different" strategy making Nintendo a potential exception to his unofficial "no big deals" rule.
Finally, another factor is the Japanese attitude toward M&A and to a lesser extent foreigners. While M&A has become more common in Japan through the years — primarily between domestic rivals — Jobs or Bill Gates would have problems convincing Nintendo shareholders to accept an offer. After all, Japanese gamers refuse to buy Microsoft's Xbox simply because it is American, so why would shareholders tender their shares to Americans?
While StreetInsider's suggestion is intriguing, it seems highly unlikely. —Matthew Wurtzel
See story from StreetInsider
See review of Wii from The Wall Street Journal's Walt Mossberg
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