Nintendo’s president says it won’t join the games industry acquisition arms race

Nintendo president Shuntaro Furukawa has reiterated that the company plans to grow its game development capabilities organically rather than through acquisitions.

With the industry going through a period of consolidation, Furukawa touched on the topic of acquisitions on Thursday following the publication of Nintendo’s latest financial results.

“Our brand was built upon products crafted with dedication by our employees, and having a large number of people who don’t possess Nintendo DNA in our group would not be a plus to the company,” he said (via Bloomberg).

Furukawa’s comments echo those he made in November, when he said the company was primarily focused on organic growth in order “to continue Nintendo’s creative culture”, but that he was “not dismissing” the possibility of acquiring other game companies.

However, the marketplace has shifted in a major way recently, with 2022 kicking off with a number of record acquisitions (and more are expected to follow).

On January 10, Rockstar’s parent company Take-Two revealed its intention to purchase mobile gaming giant Zynga in a $12.7 billion deal – at the time the biggest ever in the games industry.

The following week, it was announced that Microsoft plans to purchase Activision Blizzard in a $68.7 billion deal which would give Xbox exclusive ownership of franchises including Call of Duty, Warcraft, Overwatch, Crash Bandicoot and Guitar Hero.

And on Monday, Sony Interactive Entertainment revealed it is set to acquire Destiny studio and Halo creator Bungie in a deal worth $3.6 billion.

Investment banking firm Drake Star Partners has forecast that the gaming market will hit a record $150 billion in deals this year, but Kantan Games analyst Dr. Serkan Toto said he doesn’t expect Nintendo to play a major part in this.

“I really have a hard time imagining which of the big ones they could even be interested in buying,” he said. “Nintendo will always stay Nintendo. The company has always relied on first-party games, and I don’t see any reason why they should change.”

Last year Nintendo acquired Canadian Luigi’s Mansion 3 developer Next Level Games – the company’s first buyout in more than a decade.

However, there are signs that Nintendo’s plans to grow “organically” are already underway. In November, the company stated that the Switch’s unexpected level of success had enabled it to invest in new business opportunities, including an $880m expansion of its game development capability.

During the briefing, Nintendo president Shuntaro Furukawa said it would spend up to ¥100 billion yen ($880 million) expanding its internal game development capability and up to ¥50 billion yen ($440 million) growing its non-game entertainment software assets such as movies.

A month later, Nintendo appeared to have started construction of two major office expansions in Kyoto, Japan, reportedly in an attempt to create more games in-house, rather than outsourcing development.