It would make much more sense to buy 5 smaller companies than 1 big one. Usually smaller companies have great new ideas but lack the funding to do great things. A group of ambitious developers in a small company but given Nintendo's funding would make much better games then they would alone.
On the other hand a company like Square would make the same games with or without Nintendo's funding, and it's hard to recover the cost used to buy the company. Rare cost 1 billion dollars, and Square is even bigger.
The idea of buying a huge developer to starve our competition is ridiculous. This is typical thinking of MS's and Sony. Realize you can't buy all the good companies to kill your competion; there will always be more new, smaller companies that are created and are putting out great games for the other systems.
You can never buy them all.
