First of all, before anyone says Rare was in a decline before the buyout, keep in mind that Perfect Dark came out in 2000 and was a great game. Conker's Bad Fur Day came out in 2001 and was phenomenal on both a technical scale and with the gameplay. Star Fox Adventures was an okay game. The problem is everyone compared it to Zelda and Rare had never really made a Zelda-type game before. Their first attempt was bad, but it wasn't the best they've done either.
That being said, I think it is indeed a fact that Microsoft is 90% responsible for Rare's decline. I'm not just guessing this. If you were to read interviews from various ex-Rare employees, they all say the same thing. Everything went to hell after Microsoft took over. It didn't happen right away. Here's a list of reasons why Rare went through a huge decline.
- Nintendo was not there. Even though Nintendo let Rare be mostly independent, they still supported them from a distance and would often help them make their games better. Nintendo also played a huge role in marketing Rare's games. Under Microsoft's reign, that relationship did not exist. Microsoft did not know anything about the art of game development or how to properly market these games. They were still new to the industry.
- Microsoft made internal changes to Rare that changed who they were forever. First, Microsoft closed the testing department. The testing department was a place where employees who were not currently working on a project would go to come up with ideas for new games. This is where in his early days at Rare, Chris Seavor would be allowed to full around with 3D graphics on a Silicon Graphics computer. This is where games like Killer Instinct came from. Microsoft closed it down and turned Rare into a typical hire and fire developer. Microsoft then demanded that there be more performance meetings and more people in producer and management roles. This effectively turned Rare into a bloated bureaucracy instead of the old way where everyone was divided into two or three teams and the Stamper Brothers would oversee everything.
- Unlike Nintendo who allowed Rare to do mostly what they wanted, Microsoft felt that Rare should make games for the "Xbox audience". This meant that the newer incarnation of Donkey Kong Racing, which replaced Donkey Kong with Sabrewolf was cancelled, even though it was supposedly an innovative racing game that combined racing and platforming and probably would have changed racing games forever. The Conker sequel was cancelled. A Kameo sequel was cancelled. According to Chris Seavor, just about everything he pitched for almost a decade never made it into production and many games that weren't his were scrapped.
- Most of the talent that was at Rare in 2001 had either quit or were fired within a decade. This includes Rare's two founders, programmers, game designers, graphics artists, composers....you name it, Rare lost it. Chris Seavor, who was fired in 2012 blamed all this directly on Microsoft.
But I will say this. Like I said, I think Microsoft is 90% responsible for Rare's decline. 5% has to go to Nintendo since they could have purchased Rare at anytime and they also first ones the Stamper brothers went to when they were looking for a buyer. Nintendo and Rare had a good working relationship and had the buyout occurred, that relationship would have been unaffected. The other 5% is Rare themselves and the changing videogame industry. The truth is Rare was a 1990's style company that wasn't changing fast enough. Back then, they could have three teams separately working on multiple AAA games at once. That would have been impossible in the 2000's. With the buyout, it was left up to Microsoft to help Rare grow into a modern game developer. This could very well be the reason Nintendo wasn't willing to buy Rare for the price the Stamper brothers were asking for.
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