Microsoft decided to step into the gaming industry with its own console in 2001, when it launched the first-generation Xbox, but before this happened, the company had a different plan as to how to expand in this growing market.
It appears that the software giant actually contacted Nintendo and Sony and offered them a partnership that would have had Microsoft building the software side of a new console while the hardware was supposed to be provided by the other company.
The answer, however, came pretty quickly, with both Nintendo and Sony refusing the partnership and deciding to continue on their own. Ed Fries, the co-creator of the Xbox, has said in an interview with IGN that Microsoft then decided to build a game console on its own starting everything from scratch.
"When we first started thinking about doing Xbox, we met with Nintendo. We sat down with [late Nintendo CEO Satoru Iwata] and others and we said, 'This is what we want to do, could we partner? Could we work together on this?' And basically they said no.’We could do the software and the networking stuff, you guys could do the hardware, and we could team up and put out a product together.' They said no," he recalls.j
It appears that Microsoft co-founder Bill Gates himself wanted his company to partner with a big game console maker for this plan, so he met with Sony to discuss such a deal. He was refused as well, so the only way to go forward was for Microsoft to build its own console.
As for the rumors claiming that Microsoft wanted to buy Nintendo, Fries says that he never heard of that - although we must all agree that this would have made sense, given the fact that both Nintendo and Sony refused Microsoft’s partnership proposal and starting from scratch was really difficult.
Right now, however, Xbox is a key part of Microsoft’s long-term strategy, and although the beginning was quite hard, with losses totaling around $5 billion, we’re pretty sure the software giant would no longer consider a partnership with Nintendo or Sony.