Nintendo could buy-out SE or other major publisher as they don't need to have a ton of disposable income to do it (which they have anyway), they'd finance it with the banks and likely some share swapping, etc. Nintendo is in an incredible financial position right now and would almost certainly be backed by banks and investors for any sane buyout.

The question is who is most in line with Nintendo's thinking, standards, and would add the most to the line-up? They might value a publisher who's strong in an area where they are weak, rather than a company like Sega who would be more of the same to a large degree. Western publishers are certainly on the table too, as they are weak in FPS, sandbox and sports games so a company like Bungie or R* might be seen as a desirable asset.

Nintendo should spend that money to develop and diversify its own talent pool. 

Having a developer team that can produce a Super Mario Galaxy quality game for the Wii or the like is dangerous.  Having 20 of them is Win.

@Words of Wisdom: Well said!

I would like to add, if they plan to buy anything shares would be the cheaper option. No need to buy out a studio if they will developp for them anyways with better 3rd party relationships. Buying shares from the bigger publishers is more power to Nintendo. It's more than just an investment. It's also investing in loyalty.

Microsoft should let their captive, Rare, free!

Freedom!!!

No large 3rd party is going to be bought out. They are large cause they can survive on their own haha. Meaning they want to stay independent.

Now I do think down the line we could see a very strong partnership between Nintendo and Sega but not Nintendo buying it out.

Now for companies Nintendo might possibly buy out, Camelot is the first one that would come to mind. The biggest company Nintendo might buy out is Hudson. But Nintendo is set to start rebuilding their Dream Team that they had during the N64 era. The buying of Monolith Studios was teh start to taht. And with NIntendo's market value, profits, and sales increasing so much its only economically wise to make yourself a bigger company buy doing this. Nintendo is set to expand and in the next few years they should buy out a few smaller companies of the size of Monolith Studios.

Sony I really don't see too many companies that they would buy out. Although I'm sure they are interested in buying Rockstar but Take 2 wouldn't give them away.

Microsoft on the other hand isn't really set to buy any companies. I mean if you haven't already noticed MS has been dropping companies, Bungie being the largest. This may be hinting at that MS isn't planning on staying in the console wars too much longer. Or possibly they are dropping to look for new talent. I don't know but the first one is probably more what's going on.

You may see soon that MS gets rid of Rare. This may be the reason why Banjo Kazooie 3 hasn't beem shown and why Viva Pinata Party animals isn't being made by Rare.

 Microsoft paid a lot of money to buy Rare. They will not let them go without seeing something in return (lots of cash). But if they can be successfull they can buy themself out like Bungie did.

 On topic: Nintendo needs a 2nd Rare. Or better yet 2 of them. Instead of going for the big ones, they need a few of those talented ones. Free Radical is a much better option than let's say spending tons of millions on buying a company like Namco Banday... buying shares is the way to go for those

MS better not drop out of the console market, I like the idea of there being three major consoles in competition. It just.. works, for the customer mostly.

@ Zucas: I agree, Microsoft isn't eager to expand but they are not gonna drop out of the consoles business. They are in 2nd position. Nobody in 2nd position has ever dropped out the console business. And they are desperately trying for a breakthrough in the Japan.

Bungie left because of other reasons. If they didn't let them go, the talented people would have left Bungie anyways. Eventhough Microsoft don't own Bungie anymore, expect the majority of games to be for Microsoft.

Rare is very keen on secrecy, they are much like Nintendo. They don't show off pieces of games that feel unfinished. Banjo-Kazooie is probably still in early stages of development. Anyone who knows Rare knows how long it takes them to finish a decent game. And Viva Pinata being developped by a different studio has nothing to do with it. That's Microsoft trying to milk out the franchise. Rare is probably working hard on their secret projects like usual.