Ed Fries, vice president of Xbox game content for Microsoft, confirmed the purchase at a promotional event in Spain for the game console. Microsoft said in a statement that it had paid $375 million in cash for the developer, best known for creating titles such as "GoldenEye" and "Donkey Kong 64" for Japanese game giant Nintendo. Rare will now produce console games exclusively for the Xbox, although it will continue to make games for Nintendo's Game Boy Advance handheld player.
As, Nintendo had sold its 49 percent ownership interest in Rare and confirmed that the deal was part of Microsoft's acquisition of the studio.
Analysts haveMicrosoft needs to dramatically enhance the quality of the roster of games available for the Xbox, particularly games aimed at younger and casual players, if it is to compete with industry giants Sony and Nintendo.
"Rare has a tremendous track record...and they will be bringing their content exclusively to Xbox," Robbie Bach, Microsoft's chief Xbox officer, said during a press conference following the announcement. "They have been for the last 20 years perhaps the leading game developer in the world...They will certainly help broaden and deepen our portfolio."
Nintendo will retain rights to some Rare-affiliated franchises, such as Donkey Kong and Star Fox, while Microsoft will have rights to produce sequels to more recent Rare games such as "Banjo-Kazooie," "Conker's Bad Fur Day" and "Perfect Dark."
Microsoft said the first Xbox game from Rare, an original adventure named "Kameo," would be ready next spring. An Xbox sequel to "Perfect Dark" is also in the works for next year.
Microsoft also used the Spain event to promote European plans for Xbox Live, theonline service for the Xbox. Xbox Live is set to debut in North America in November, while European consumers will have to wait until March.
Microsoft is partnering with various European communications providers to help consumers hook up to the broadband-only Xbox Live service, including deals with British Telecom's Btopenworld and France's Wanadoo communications conglomerate.
"I stand here more convinced than ever we made the right decision" to restrict Xbox Live to broadband connections, said J. Allard, Microsoft's general manager for Xbox. "We decided that narrowband gaming was like sucking pizza through a straw."