The rise of mergers and acquisitions in recent years throughout the industry is one trend that is likely to follow for quite some time.
Four of the largest valued deals in the history of games took place in 2020 alone, the biggest of which being Microsoft’s purchase of ZeniMax Media for $7.5 billion. Still, it’s Tencent’s procurement of Supercell in 2016 at $8.6 billion that tops the lot.
Nintendo, on the other hand, rarely engage in this process, with the last acquisition made by the Japanese firm taking place in 2007. The mentality of building strong relationships with external studios and working with them in a close capacity, rather than acquiring them outright, is something that the late president Satoru Iwata laid down near the start of the century.
That’s why it was quite surprising to find out earlier this week that the Mario maker had agreed to acquire Vancouver-based developer Next Level Games.
Founded on August 22nd, 2002, NLG first came to prominence with the Super Mario Strikers series (known as Mario Smash Football in Europe). A chaotic sports title that had all the charm of the Mushroom Kingdom but a slightly darker edge that we had yet to see from the plumber, and have arguably yet to return to since.
Seeing Mario, Luigi, Peach and the likes barge one another into electric fences with an enraged scowl that would make Kratos think twice is something that we all took for granted. Two hits in two years came at a cost. Mario’s portrayal within Strikers was one of the core reasons why Nintendo decided to pull back on how the character was used going forward (according to games journalist Imran Khan, previously of Game Informer).
Nevertheless, the partnership between the two firms continued. Apart from a couple of experiments outside of Nintendo’s hardware – Captain America: Super Soldier for one stands out – NLG continued to work on Nintendo IP, making successes of both the Punch-Out!! and Luigi’s Mansion series. Sure, there was a stumble with Metroid Prime: Federation Force, yet for the most part, the studio’s repertoire has been extremely solid – all culminating with its latest release.
While many NLG titles have gone on to shift over a million units (Strikers, Punch-Out!! etcetera.), the Luigi’s Mansion series has been a ginormous win for both studio and publisher unlike anything else. Dark Moon on the 3DS sold close to 5.5 million while the third entry on Switch is already closing in on eight million global sales (as of September 2020), and will likely reach double figures this year. A remarkable number.
All of this said, Nintendo may have never made a move for NLG if not for the reason that its owners decided to put its shares up for sale. The concern stemmed from losing what is now a major series and a reliable partner.
As previously mentioned, the company made its last acquisition way back in 2007, taking an 80 per cent majority shareholder of now renowned Xenoblade Chronicles series creator, Monolith Soft, from Namco Bandai. It’s not something Nintendo goes out and seeks. It’s all about continuing to bolster and retain its most valuable asset – it’s IP.
It’s the same reason why Sony and Microsoft snapped up both Insomniac Games and Bethesda (ZeniMax Media) respectively. The value of IP is growing at an increased pace but Nintendo remains confident on the same strategy that Iwata outlined nearly 20 years ago.
AlphaDream is the best example of this. The developer was a consistent partner since 2001 and had a favourable fan base with the Mario & Luigi series. However, following the studio’s announcement that it would go bankrupt, Nintendo only opted to file a trademark for the popular handheld series, rather than saving the studio from the brink.
So, while many will hope that Intelligent Systems, Camelot or even HAL Laboratory will become the next obvious choice to boost the Switch maker’s core unit, the reality is that unless push comes to shove, Nintendo will continue to treat business as usual.
