Nintendo has acquired Next Level Games. Nintendo is extremely conservative when it comes to M&A with its last major acquisition being Monolith Soft in 2007.
So why did Nintendo acquire Next Level Games (NLG) now and what does it mean for both companies? Quick thread below:
So why did Nintendo acquire Next Level Games (NLG) now and what does it mean for both companies? Quick thread below:
NLG has been a key partner for Nintendo since 2005 when it first worked on Super Mario Strikers.
It has been working exclusively with Nintendo since 2011 and its recent release, Luigi's Mansion 3, has sold over 8m units and is on track to outsell the prior 2 games combined.
It has been working exclusively with Nintendo since 2011 and its recent release, Luigi's Mansion 3, has sold over 8m units and is on track to outsell the prior 2 games combined.
NLG has helped increase the value of Nintendo's IP and it's clear the developer can produce multi-million selling hits.
What changed recently is that the owners of NLG were looking to sell their shares in the company and began talking to potential buyers.
What changed recently is that the owners of NLG were looking to sell their shares in the company and began talking to potential buyers.
Nintendo moved to acquire the studio for 3 key reasons.
1. To acquire a talented studio with proven success
2. To strengthen internal development on owned IP
3. To avoid the NLG being sold to a different company whose interests may not lie with those of Nintendo.
1. To acquire a talented studio with proven success
2. To strengthen internal development on owned IP
3. To avoid the NLG being sold to a different company whose interests may not lie with those of Nintendo.
Over the past few years we have seen an increase in M&A activity in the video games sector, with large tech and gaming companies acquiring development studios.
In most cases this is fuelled by the rising value of IP and the need to build talented teams.
In most cases this is fuelled by the rising value of IP and the need to build talented teams.
In this case, Nintendo is not engaging in M&A for the same reason that say Microsoft did, in regards to Bethesda etc...
For them it's simply the three reasons above with the primary aim to strengthen internal development and integrate NLG as an internal team working on owned IP
For them it's simply the three reasons above with the primary aim to strengthen internal development and integrate NLG as an internal team working on owned IP
There won't be much change to Nintendo's M&A strategy going forward and I don't expect them to engage in the same way that other gaming / tech companies have done so.
Nintendo may make additional moves to secure studios like Intelligent Systems or Grezzo etc. if needed though.
Nintendo may make additional moves to secure studios like Intelligent Systems or Grezzo etc. if needed though.
Nintendo's greatest asset is its IP and that is what shapes its M&A philosophy.
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