Before the original Xbox launched in 2001, Microsoft asked Nintendo if it would consider being acquired, and according to a former Xbox executive, Nintendo “just laughed their asses off.” Microsoft then went back with a second pitch in January 2000, offering to build Nintendo’s hardware while Nintendo focused on Mario and its games. It didn’t work out either.
With the Xbox turning 25 on November 15, the tables have turned quite literally. Nintendo is selling Switch 2 consoles by the millions, while XBOX’s CEO recently had to clarify that Xbox is not for sale.
Microsoft went to Nintendo twice before the first Xbox launched
When Microsoft was building the Xbox, it had money but no games, so the team tried to buy studios for exclusives. “The first company we reached out to buy was EA. They said, ‘No, thanks,’ and then Nintendo,” said Bob McBreen, then head of business development.
Kevin Bachus, then director of third-party relations, remembers how that went. “Steve [Ballmer] made us go meet with Nintendo to see if they would consider being acquired. They just laughed their asses off. Like, imagine an hour of somebody just laughing at you.” I always wondered if high-stakes corporate meetings were just as how it is portrayed in movies, and now I have my answer.
Undeterred, Microsoft tried a different approach. “We actually had Nintendo in our building in January 2000 to work through the details of a joint venture where we gave them all the technical specs of the Xbox,” McBreen said, adding that “the pitch was their hardware stunk,” and Nintendo would let Microsoft “take care of the hardware.” It didn’t work out.
Ballmer’s only comment was, “I remember loving their content.” Nintendo of America’s then-chairman Howard Lincoln was more diplomatic, saying, “Nintendo does not talk about confidential discussions with other companies. In any event, nothing came of these discussions.”
These recollections come from Bloomberg’s oral history of the Xbox by Dina Bass, published in January 2021.
Sony’s PlayStation 2 scared Microsoft into making a console
In 1999, Sony announced the PlayStation 2 and marketed it as a rival to the PC. “Sony coming out and saying, ‘PlayStation 2 is going to redefine the computer world,’ that got attention inside of Microsoft,” said Bachus.
Rick Thompson, the first head of Xbox, said Sony was showing “a home without a PC in it,” and “You can’t say that to Steve Ballmer.” Well, Ballmer’s words are iconic: “We needed to penetrate the living room.”
The PS2 launched in Japan on March 4, 2000, and doubled as a DVD player. Nintendo, meanwhile, was still on the cartridge-based Nintendo 64 while working on its next console, codenamed Dolphin. But Nintendo wasn’t struggling; in fact, it was the opposite. Pokémon was a global craze, the Game Boy Color was everywhere, and Mario and Zelda were what Microsoft didn’t have in their portfolio.
Microsoft couldn’t buy Nintendo, so it bought Halo
Nintendo wasn’t the only one that got away. Microsoft had a letter of intent to buy Square, the Final Fantasy publisher, until its banker said in November 1999 that “the price is too low.” Talks with Mortal Kombat maker Midway also fizzled out.
Then came Bungie, whose unreleased Halo Steve Jobs had shown off at Macworld 1999. Microsoft bought it in 2000, and Midway’s CEO left Bachus a voicemail calling Microsoft “the dumbest people in the industry” for buying a PC game developer. Even Microsoft Japan believed first-person shooters don’t do well on consoles.
Halo: Combat Evolved launched with the Xbox on November 15, 2001, three days before Nintendo’s GameCube reached North America, and it became the console’s runaway hit. As Bachus said, “Halo was why you, as an Xbox owner, were smarter than your PlayStation 2-owning friends.”
Anyway, the company that got laughed out of Nintendo’s meeting went on to buy Bethesda and, in 2023, Activision Blizzard for $69 billion.
Nintendo and XBOX took very different paths
Today, Nintendo is doing just fine. Maybe, more than fine. As of June 30, 2026, the original Switch had sold 156.59 million units, and the Switch 2 has already crossed 23.68 million.
XBOX, now in all caps after Asha Sharma ran a fan poll in May, is in a reset. Its revenue fell 7% to $21.79 billion in fiscal 2026, with hardware revenue down 29%, and Microsoft is cutting 3,200 XBOX roles. In September, Sharma told The New York Times that “Xbox is not for sale” amid reports of a possible spin-off.
Funnily enough, Mario didn’t make it to Xbox, but Microsoft now publishes its own games on Nintendo’s consoles, with Minecraft on Switch for years. XBOX is also going full swing on Windows, with Xbox mode on Windows 11 PCs and a next-gen console that could push Windows 11 performance forward.
For the 25th anniversary, Microsoft is releasing the XBOX Series X25 in translucent green, a nod to the original console. I can’t help but wonder what that anniversary would have looked like with Mario on the box. What do you think? Would Nintendo have survived as part of Microsoft?
