Xbox boss Phil Spencer really wanted to buy Nintendo in 2020

Microsoft is on an apparent spending spree. Over the past decade they have acquired over a dozen studios including ZeniMax Media. Obsidian Entertainment. Double Fine. inXile Entertainment. Microsoft hopes to complete its $68.7 Billion purchase of Activision Blizzard in the near future.

But Xbox head Phil Spencer said in 2020 — a month before Microsoft announced its plan to acquire ZeniMax and subsidiary Bethesda Softworks — that his No. Nintendo would be his first choice in an acquisition or merger. In emails leaked by the Federal Trade Commission as part of its case to block the Microsoft-Activision Blizzard deal in court, Spencer named Nintendo as “THE prime asset for us in Gaming.”

Takeshi Numoto, a Microsoft executive, and Spencer exchanged emails about the possible acquisition of Nintendo. Spencer said that he’d “had numerous conversations with the [leadership team] of Nintendo about tighter collaboration and feel like if any US company would have a chance with Nintendo we are probably in the best position.”

Two things stood in Microsoft’s way, according to Spencer: “The unfortunate (or fortunate for Nintendo) situation is that Nintendo is sitting on a big pile of cash, they have a [board of directors] that until recently has not pushed for further increases in market growth or stock appreciation.” In the years prior, Nintendo had announced plans to expand its business and capitalize on its IP with animated features, theme parks, and free-to-play mobile games. Nintendo had $5.75 Billion in Cash and an Operating Profit of $3.2 Billion at the time this was discussed.

Spencer said that he didn’t see a near-term, mutually agreeable merger of Nintendo and Microsoft, adding, “I don’t think a hostile action would be a good move so we are playing the long game.”

According to that email, Microsoft was then actively engaged in merger and acquisition discussions with Warner Bros. Interactive and ZeniMax — the latter of which came to fruition.

Spencer explained his rationale regarding Nintendo with Numoto in the midst of conversations around Microsoft’s potential acquisition of TikTok. Microsoft attempted to purchase TikTok for the U.S.A., Canada Australia and New Zealand in the summer of 2020. According to that plan, which was pushed by former President Trump’s administration amid a crackdown on the social media platform, Microsoft would own, operate, and oversee TikTok’s business in those markets.

“I get that this whole Tic Tok [sic] discussion is happening outside the regular core biz discussions,” Numoto said in an email to Spencer and chief marketing officer Chris Capossela, “but it really makes me wonder why we would not find targets like Nintendo more attractive, if we want to find a way to increase our consumer exposure and relevance.”

Explained Nomuto, “It feels like Nintendo has such a rich set of franchises that can help us shore up our content franchises […]This is something that I’m sure you have discussed many times. I understand there are many challenges with this goal, but I thought it would be worth sharing my thoughts (since this feels more logical to me than Tik Toc). [sic]”

“I love this discussion and value you looking at the opportunities here,” Spencer responded. “At some point, getting Nintendo would be a career moment and I honestly believe a good move for both companies. It’s just taking a long time for Nintendo to see that their future exists off of their own hardware. A long time.”