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Rare was definitely one of Microsoft's failures in the gaming space. They spent nearly a half- billion dollars on them only to get a poor platforming game, a remake, and a failed attempt to create a Pokemon-like phenomenon on the 360.

That said, Rare itself was losing its value. I never bought into the Rare hype much. DKC and KI were pretty abd well-animated. But in 5th generation, Square, Capcom, Konami, Nintendo itself, and others caught up and even surpassed Rare in the graphics category, so that advantage was gone.

In the gameplay department, I never thought Rare was anything special. I'm willing to grant the significance of Goldeneye and Perfect Dark because they were mostly uncontested in the console FPS space at the time, and that was one genre where the PS1 was weaker than the N64. I will admit that FPSs are among my least favorite genre. did like Perfect Dark. Blast Corps was novel for being able to destroy stuff. DKC was never as good as Super Mario World 1 or 2, KI was never a top tier fighter. Diddy Kong Racing looked like it was slapped together to shore up Nintendo's dismal 1997 holiday season while PS1 owners were enjoying FF7 and Tomb Raider II, and we already had Mario Kart 64, though I suppose that was the fault of Nintendo itself. Banjo-Kazooie bored me after the third world with its collectathons. I didn't even bother with Conker, which originally started out as another cutesy collectathon platformer in the vein of B-K before negative feedback from the N64 fan base caused Rare to try the toilet humor angle. By the time it came out I had already moved on to the PS2.

Star Fox Adventures was mediocre, and I doubt the original Dinosaur Planet concept would have gone over any better. I never had an Xbox, but I knew Grabbed by the Ghoulies was getting pilloried by game reviewed. Perfect Dark Zero was a stark illustration of how far Rare had fallen behind. By that point, we had Halo and Metroid Prime in the console space, so FPSs weren't a novelty anymore.

So in summary, Rare was already fading when MS got their hands on the company. Their peak was in 1994-1997. Were they still as big of a draw in 2000, Nintendo would have done more to hold onto them. Maybe the Stampers would have stayed, maybe not. A lot of other big names have retired from the industry, even in seemingly good times. Nintendo would have had them to shore up GameCube droughts, though their games wouldn't have been as big a deal, and who knows how they would have been on the Wii and Wii U.