 Today we need to talk about something that, honestly, it's not shocking that it was a thought. It's shocking to the level and length in which this idea permeated inside of Microsoft and Xbox. Of course, we're probably talking about a story you may have heard already, but we got to cover all the angles of it. And that is that Phil Spencer and Microsoft wanted to buy Nintendo. Now look, them wanting to buy Nintendo is no secret, obviously they had talked about this a long time ago before they even started the Xbox brand itself. So yeah, this isn't a new topic to happen inside Microsoft, but it is really the length to which Phil Spencer was willing or suggested he was willing to go. And the way in which he talked about Nintendo and that became problematic, at least in my eyes, because look, it is not a good look for Phil Spencer and Xbox for how they were treating Nintendo as a company and how there might have been a big master scheme at play for years to eventually get Nintendo to sell their company to them willfully or merge companies I guess as they were trying to make it sound to be. Now here's the thing, before we dive in, if you're enjoying this video, I would appreciate you to drop a like, subscribe to the channel. We're on our road to 150,000 subscribers and go ahead and hit that bell icon to be notified of all future uploads. But the reason we have to dive into this is because frankly, it's not going to happen. The world governments are highly likely to never allow such a merger to happen. These are direct competitors, but it's the length at which Phil Spencer put this in an email that that's really troublesome. So here's the thing. The email came from the FTC versus Microsoft stuff. And we still to this day don't even know what the hell is going on at the FTC. These are legal documents that were sealed and they weren't ever supposed to be released. And for some reason, randomly the other day, the FTC unlocked all the files. And in doing so, we got access to a bunch of emails that were never supposed to be public. We got access to documents from Microsoft detailing their plans for upcoming game releases, upcoming console releases, stuff that was never supposed to be public. It's it sort of feels like the FTC has some sour grapes over losing. So they wanted to ruin Microsoft's day by releasing all these documents. I don't know if there'll be any legal repercussions for this. Most of this stuff was literally sealed by the judge. This stuff was not supposed to become public, but it is. And the unfortunate thing for Phil Spencer, in this case, is this particular email is really, really bad. And guys, you might, if you like Phil Spencer, you might lose a little respect for him after I read it. So this is an email from Phil Spencer to Chris Capulsa and Takeshi Numoto. Okay, I don't know who those people are. But anyways, this is the email chain. And here's what he said, Takeshi. I totally agree that Nintendo is the prime asset for us in gaming today. And gaming is our most likely path to consumer relevance. And remember, somebody else brought up Nintendo, right? But obviously Phil Spencer is like, yes, I do agree. So I've had numerous conversations with the LTE of Nintendo about tighter collaboration. And I feel like if any U.S. company would have a chance with Nintendo, we are probably in the best position. I'll get nothing wrong here. Right. Like expressing your desire to want to buy the company isn't a bad thing, but it gets so much worse. All right. So the unfortunate or fortunate for Nintendo situation is that Nintendo is sitting on a big pile of cash and they have a BOD that until recently has not pushed for further increases in market growth or stock appreciation. I say until recently as our former Microsoft BOD member, Value Act, has been heavily acquiring shares of Nintendo. And then he links to a source from Rooters. And I've kept in touch with Mason Morfit as he's been acquiring. It's likely he'll be pushing for more from Nintendo stock, which could create opportunities for us without that catalyst. I don't see an angle to a near term, mutually agreeable merger of Nintendo and Microsoft, and I don't think a hostile action would be a good move. So we are playing the long game. Our BOD has seen the full write up on Nintendo and Valve, and they are fully supportive of either if the opportunity arises as am I. So at this point, here's what we're learning from Bill Spencer. In his first paragraph, we're seeing that he has a strong desire to play a long game or this email set back in 2020. He's playing the long game to acquire Nintendo and he's using things like their former stock exchange person and this Mason Morfit guy for Value Act to acquire a bunch of Nintendo. Now, the Microsoft doesn't own this stuff. The Value Act does. But the idea is to put pressure on Nintendo to increase stock prices. Now, all of this is before all of the theme parks were launching. All of this is before the movie launch. So Nintendo has already done things to increase their stock value, but it's one of those things that this is before all of that when Nintendo was so reliant on video games. So the idea here was that if enough stockholders own the stock and put the pressure on Nintendo that, hey, you got to start raising the value of your company instead of just keeping it the way that it is. That Nintendo might change and have to look for other partnerships and other deals, such as with Microsoft, to massively increase their stock prices. So it was a stock play. He was trying to pressure Nintendo to a point where they sort of feel like they have to work with Microsoft or that the Microsoft stuff looks more appealing. This is all behind the scenes. So while he's taught to people at Nintendo, a lot of that was about creating closer partnerships. This was really his end goal. His end goal was to get Microsoft and Nintendo to merge the Xbox and Nintendo branding. Very, very interesting. And obviously, arguably a little bit weird with some possible insider trading stuff going down with this, this, this company in value act. I'm not sure if this is entirely 100% legal. Then again, they don't work for Microsoft anymore. So, you know, what do I know? Anyways, confidentially, we have two fairly active M&A discussions in gaming right now, Warner Bros. Interactive and Xenomax. I took Xenomax to the BOD last week and prior to the BOD discussion, I asked Amy and Satya if they wanted me to slow either or both of these, given the TikTok discussions, and they both emphatically told me no. They are fine doing all three if these deals make sense. I won't say WB or Xenie is Nintendo, but both are for sale and gettable by us if things align. Biggest obstacle is WB is IP ownership. We won't own any of the IP, which hurts long term flexibility. And the only obstacle on Xenie is evaluation expectations of founders. But I think it is likely that one or both of these happen, which will help us continue to double down on our gaming relevance. To give a sense of scale, Xenomax is about the size of our current first party studios organization. So that would be doubling our content asset. Downside is it's more core, less broad, but no mobile, more North American and European. I love this discussion and value looking at the opportunities here. At some point, getting Nintendo would be a career moment. And I honestly believe a good move for both companies. And here comes the line that's going to stick with you guys. Hardcore every time you look at Phil Spencer. It's just taking a long time for Nintendo to see that their future exists off of their own hardware. A long time smiley face. He's basically saying that Nintendo just doesn't see it yet. But their long term future isn't in hardware. That is wow. Now, these are obviously just his opinions. And it does show what goes on behind the scenes. I think a lot of us along the way didn't really mind that Microsoft bought Xenomax or that they're doing this Activision was a merger. For the most part, we understand Microsoft is in the position of third place. And the only way that they were going to get enough relevancy was likely to acquire a bunch of IP and acquire a bunch of studios because they needed that sort of power to create consistent releases like Starfield and all that so they could begin to actually compete with the likes of PlayStation and Nintendo. I think on the surface, a lot of us understand what competition means and that obviously with Microsoft being in last place with the consoles, that a lot of the acquisitions, at least fundamentally, we could wrap our minds around why Microsoft would do it and why it makes sense. But obviously, we were never supposed to be privy to what the private conversations were behind the scenes because you could see like they wanted to buy WB, but the kick up with WB is, yeah, you get those awesome, you know, developers, but you don't gain any IP rights. If you don't gain the IP rights, it really devalues buying WB, right? Like if you don't get the rights to the WB IP, then what's the point of the purchase? It would you would have to be reliant on the IP right holders to allow WB to continue to make those games and what if they yank those rights suddenly then buying WB wouldn't make any sense. And obviously, we know this that they ended up buying Zenimax, right? This is before the Zenimax deal was finalized. But the big thing here is obviously, hey, he always has viewed the golden goose egg to be Nintendo. He always like from the very beginning of these major acquisitions, his number one goal, Phil Spencer's number one goal as of 2020. We don't know what his goals are today, but as of 2020, his number one goal was to buy Nintendo and he was playing or potentially still is playing the long game to acquire them. I don't know what long game he's doing. Nintendo is healthier than ever and now they've created more revenue streams. So I'm not so sure that Nintendo will ever be acquirable for Microsoft where they could even put an offer. And after this, by the way, I want to be clear, I don't think Microsoft is dumb. They know that they barely acquired Activision Blizzard, right? That deal that's being finalized right now by the CMA. It is barely getting by by the skin of their teeth, right? They had to go to multiple legal cases. It was almost blocked in the US. It was blocked a little bit in the UK. The point is that they barely got that deal to go through and get approved. There's no way that they're going to be able to get a deal approved for Nintendo. I think when Phil Spencer made the decision that they were going to go after Activision Blizzard, that he decided right then and there that this pipe dream he had in 2020 of the long game play for Nintendo is now behind him because he knows regulatory boards are not going to allow Microsoft and Nintendo to or Microsoft to buy Nintendo or this theoretical merger that he was trying to get Nintendo to maybe start favoring. So what is clear is I think Phil Spencer is probably given up on this pipe dream of his, but before that acquisition was going down, he did really have it in the long term plans of Microsoft to acquire Nintendo. Now, I'm not going to sit here and always act like all acquisitions are bad, but acquisitions that eliminate competition, I think is bad. And the idea that he thinks Nintendo's future wasn't making their own hardware. It does echo the sentiments of some gamers out there where they think Nintendo should go third party, but I don't know that it really echoes the opinions of the actual people that buy Nintendo's products. Because Nintendo keeps providing things to the market the other place isn't. What other major player in the space is doing a hybrid system? Is Microsoft providing one? Is Sony providing one? Oh, no, we got Steam Deck in some other. We don't have any major console manufacturer doing what Nintendo's doing. So why would we as consumers want that option in gaming to go away? Of course, we wouldn't want that. So this idea that Phil Spencer is this greedy and knows the unlimited bank that is Microsoft and knows what their buying power truly is, I'm not shocked that this email exists. I'm not shocked that Phil Spencer had a plan in place to get Nintendo to agree to merge or be purchased. I am not surprised. What I am, I think, shocked by is the length to which he talks about the problems that Nintendo has that aren't necessarily problems except for people that want to acquire them. Things like Nintendo has a huge amount of money sitting in a bank. Fifteen billion dollars just sitting in a bank, just sitting there, a crewing interest, literally just sitting on a giant mountain of cash. Why would a company sitting on a giant mountain of cash sell? Like, no, Nintendo would be buyers, not sellers, right? And then on top of that, obviously, the massive success of their hardware. Oh, they don't know it yet, but their future is not in hardware. Meanwhile, the hardware is kicking the living shit out of Xbox when it comes to sales. So it's interesting just to see this. And again, I'm not shocked that this type of conversation occurred, even though, yes, it does make Phil Spencer look like a greedy bastard. But what I am shocked by is that the email ever made it out. Look, I'm going to I'm going to be coy with you guys. I have a lot of business emails that I do every day, right? A ton of business emails with lots of different companies from video game studios to other brands out there when I'm working out deals for for like branded content and baked in ads and sponsored videos and stuff like that. I don't do a lot of them, but I do have a lot of emails with these companies. And yeah, there are some of those emails and some of those negotiations. I really don't want to be public. And they are all under the guise of a of a non-disclosure agreement where I can't talk about the deals and they can't talk about the deals is the public thing. But there are some of those emails that they got out might not paint me in the best of light, right? They might make me look really sleazy, as it were, as I'm obviously looking out for the bottom line and trying to do what's in the best interest of myself and the channel. So when you read the emails, they go, man, it's sort of an asshole. Look at the demands he's making. And yeah, yeah, and they don't have to agree to any of it, which is totally fine. You know, when I'm setting a price for something that sounds astronomical, there's a reason the price is set that way. But when I'm making these negotiations, some of these emails wouldn't make me sound good. The one thing you won't find in any of my business emails, if God forbid they ever leak publicly, is me trash talking a company. I never down talk a company or say they're making mistakes. I might suggest that what they want me to do isn't the best way to sell products. But I don't, you know, I don't trash them. And what you will find in this email is multiple instances of him acting like Nintendo has made some bad choices. But really, those choices are just choices that are bad for an acquisition, not bad for Nintendo as a company. I don't know, guys. The general consensus today is that Nintendo fans hate Phil Spencer now. Here's my thing. I don't want Microsoft and Nintendo to stop working close together, not because I'm worried about them being acquired. Let's set the record straight. There is not a world that exists in my lifetime that Microsoft is going to be able to buy Nintendo after this Activision Blizzard deal. They're going to be hard pressed to make any other major acquisitions. And Nintendo would be an even bigger acquisition. So I'm just going to throw out there that this isn't going to happen. So keeping this in the back of our minds that this isn't going to happen. Why wouldn't we want Microsoft and Nintendo to continue to work close together? I want to see the next Doom game come out on Nintendo Switch. The next Wolfenstein game come out on Nintendo Switch. Hey, let me dream. Let me dream of a world where Starfield and Elder Scrolls 6 comes out on a future Nintendo platform. And I keep bringing this stuff up because in the end, what I care about is us as consumers get more game options. And the one way that Nintendo can get more of those game options is to continue to work close with Microsoft. So I don't want this to sour that relationship now that Nintendo themselves is fully aware of what the original intent of all this working close together was. You know, we just had the other day where Aaron Greenberg's email was like, yeah, man, Nintendo is not even really a console. And then now you have Phil Spencer being like, hey, man, you know, we really wish Nintendo would just stop making hardware. Look, guys, take this for what it is. It is a business discussion behind the scenes was never meant to be public. Obviously isn't going to happen. And if you really think Phil Spencer is a sleazeball and you want to hate on Xbox, go right at what I'm going to do. You guys are going to do it anyways, right? I'm just going to sit back and go, man. This sounds so corporate, so wishy-washy. And yeah, you don't think there's emails from Nintendo that probably say some disparaging things about execs and other companies and their plans? What if there was like a plan in place for Nintendo to dismantle platinum games or something like you just aren't going to see this because Nintendo doesn't go to court where they need to reveal these damn emails in the first place. These emails had to be unveiled in this court case in the first place because they were dealing with an acquisition. And since they were dealing with an acquisition, any emails related to acquiring companies were part of the court case is the only reason this is out here. And the FTC, man, look, I don't know what the hell is going on there. There has to be a legal repercussion for just leaking all this stuff, right? Someone clearly did it intentionally. This stuff was sealed. But hey, the good news is, Nintendo is all right, everyone. We'll be back with our next video. I believe we have a few more scant details to share on Nintendo switch to that are going to be quite interesting. I want to go ahead and sign out and I'll catch you guys in the next video.