Nintendo confirms Rare sale

Nintendo has officially confirmed that it has sold its 49 per cent stake in UK developer Rare, ending an exclusive relationship which has lasted through several console revisions and handing over with it the rights to such franchises as Perfect Dark and Banjo Kazooie.

Although the company did not name the purchaser, information from within Rare over the past couple of weeks has revealed Microsoft to be the lucky new owner of the legendary studio. It had been rumoured that disputes over the ownership of licenses was holding up the sale, but these have now been resolved - with Nintendo retaining the rights to titles like Donkey Kong and StarFox, while Rare takes much of its original intellectual property with it into the Xbox fold.

Interestingly, Nintendo describes the move as part of a "strategic redirection" of its investments in development - a view somewhat supported by its withdrawal from US "second-party" developer Left Field in recent weeks. The company appears to be refocusing on internal development (and closely affiliated Japanese subsidiaries such as HAL Labs and Game Freak) and encouraging third-party development rather than pursuing its traditional second-party model, and the money from Rare's sale will no doubt be pumped into this sector - perhaps joining the "war chest" of cash set aside by former president Hiroshi Yamauchi to co-fund third party projects.

The company couldn't hand over one of its former powerhouses to new arch-rivals Microsoft without a sting in the tail, however. Commenting on the decision to sell the studio, Nintendo of America executive vice president Peter MacDougall said that "in looking at the company's recent track record, it became clear that its value to the future of Nintendo would be limited. In other words, we passed on this opportunity for very good business reasons."

Although MacDougall goes on to temper his words by saying that "this announcement does not diminish our respect for their work or the past contributions they have made to Nintendo," the implication is clear. Nintendo thinks that it's pulled a fast one over Microsoft, demanding a fairly substantial quantity of cash for a company whose founders - the elusive Stamper brothers - are planning to depart the industry and whose worth as a developer they obviously consider to have declined.

We're loath to criticise Rare, whose games have been almost uniformly of a very high quality over the years, but we can't help but agree in some senses - Microsoft's purchase of Rare just leaves Nintendo even more cash-rich in its courtship of high-profile third party development, and while the Perfect Dark licence in particular is a coup for the Xbox, the short-term effect of buying Rare will be negligible - after all, the team must now re-learn console programming for the Xbox after years of perfecting GameCube development. And in the meanwhile, it is Nintendo, not Microsoft, who have a Rare-developed title to crow about on their console this Christmas, with the imminent release of Starfox Adventures.