As per reports from Activision‘s founder Bobby Kotick, Charlie Munger, who is associated with Berkshire Hathaway, had shown interest in acquiring Nintendo at some point, or was open to the possibility of discussing a potential purchase of Nintendo.
On a recent Grit podcast, Kotick mentioned that Munger expressed disinterest towards video games but recognized a possible investment opportunity for Nintendo. It seems Munger suggested considering a portion of Berkshire’s substantial assets to explore ventures within the video game industry. One proposed idea by Munger was reportedly buying Nintendo.
According to Kotick, he remembered a conversation where the individual said something like, “I’ve been considering a few other firms in your industry. I believe if we were to acquire yours, it would be beneficial to also acquire Nintendo,” he suggested. To which Kotick replied, “Have you all examined that option?” The person responded, “Yes.” At that time, the company was valued at approximately 13 billion dollars, with a cash reserve of around 7 billion. The individual then stated, “You know, I don’t foresee any major problems occurring before I pass away. If things go wrong after my death, they’ll just attribute it to the mistakes of an elderly man of 82, so there’s no need to worry too much about disappointing me.
During this period, Vivendi, a large French corporation, was compelled to offload their shares in Activision. Initially, Berkshire Hathaway showed interest in purchasing these shares. However, that deal didn’t materialize, as instead, Activision managed to buy back its shares from Vivendi directly.
One Friday lunch week, Kotick sought Munger’s advice on structuring a buyback from Vivendi. At this meeting, Munger is said to have expressed his interest in financing the buyback himself. While getting up to use the restroom, Activision’s Brian Kelly advised Kotick that if Munger, an experienced investor, wanted to purchase the stake, then they should consider it beneficial as well. Eventually, this is what transpired.
Kotick expressed that Munger disapproved of the video game industry. He viewed it as similar to gambling, implying that they were exploiting people’s addictions. Kotick defended himself by stating that he was providing joy and fun instead, and that if Munger ever tried a video game, he would understand.
Indeed, it’s important to clarify that Berkshire Hathaway did not acquire Nintendo. As for Charlie Munger, regrettably, he passed away in 2023 at the age of 99. While Berkshire Hathaway possesses over $325 billion in cash and theoretically has the means to buy a wide range of companies listed on the stock market, it hasn’t shown any indication that it intends to purchase a video game company at this time.
Microsoft also tried to buy Nintendo
Approximately two decades back, Microsoft attempted to acquire Nintendo. Steve Ballmer, who was then in charge, dispatched employees to Japan to propose this idea. However, it seems that the proposal was met with laughter rather than serious consideration.
2022 saw me jumping aboard the video game train, as I scooped up nearly 15 million shares of Activision Blizzard – right before Microsoft revealed its plans to acquire the gaming giant! I shelled out roughly $66.50 per share, but things took off like a rocket after Microsoft’s announcement. The deal was eventually sealed at an impressive $95 per share, meaning I pocketed quite the hefty profit from this savvy investment!
Game Pass issues
In addition to other topics during the interview, Kotick talked about Microsoft’s acquisition of Activision Blizzard for $75.4 billion, mentioning that he and Microsoft CEO Satya Nadella managed to finalize the agreement in a mere three days. Although regulatory approval took over a year, it seems they quickly established the deal’s main structure within just 72 hours. Their only point of contention regarding the deal revolved around Microsoft’s plans for Game Pass.
Bobby Kotick pointed out that World of Warcraft has thrived with its $15 monthly fee per game, and he questioned why this should be invested in Game Pass. He stated, “I don’t see the logic in that.” He then expressed his disagreement with trading their flexible business models that cater to customers’ best interests for the sake of Game Pass. However, he acknowledged that if you’re Microsoft, you can make that risky move because of your vast resources.
Not just Kotick, other industry leaders have raised doubts about the economic viability of Game Pass. For instance, Devolver Digital has been vocal about its criticism since its inception, and Strauss Zelnick from Take-Two Interactive has also expressed reservations regarding the strategic rationale behind launching new games on Game Pass. However, it’s worth noting that there are instances where Game Pass has boosted game sales beyond the subscription, as John Romero, the creator of Doom, recently pointed out. In other words, while some have concerns about its impact on companies, others argue that Game Pass may not necessarily be harmful to them.
In certain instances, Microsoft has admitted that their Game Pass service might potentially eat into game sales; however, this is not a consistent occurrence for all games.
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2025-02-11 23:09