Nintendo continues its development expansion with acquisition of long-time partner SRD
The deal is the latest step in Nintendo’s plan to expand its internal development capabilities
Nintendo has acquired its long-established development partner SRD Co. Ltd.
SRD is a developer comprised of around 140 employees that while technically independent before now, has worked exclusively on first-party Nintendo software for 40 years and operates close to Nintendo’s Kyoto, Japan HQ.
SRD was founded in 1979 and has worked on games as far back as the original Donkey Kong, and contributed to virtually every major Nintendo franchises including Mario, Zelda and Animal Crossing.
Most recently, the company worked on Game Builder Garage, Ring Fit Adventure and 1-2-Switch.
In a statement published on Thursday, Nintendo said that SRD would “serve to strengthen the management base of SRD and secure the availability of software development resources for Nintendo”, in addition to improving the efficiency of its internal development.
The Acquisition is expected to close on April 1, 2022, pending approval.
Nintendo is currently enacting a plan to expand its internal development capabilities in Japan.
In November, the company stated that the Switch’s unexpected level of success had enabled it to invest in new business opportunities, including an $880m expansion of its game development capability.
During the same briefing, Nintendo president Shuntaro Furukawa said it would spend up to ¥100 billion yen ($880 million) expanding its internal game development and up to ¥50 billion yen ($440 million) growing its non-game entertainment software assets such as movies.
A month later, Nintendo appeared to have started construction of two major office expansions in Kyoto, Japan, reportedly in an attempt to create more games in-house, rather than outsourcing development.
The company is not traditionally active in mergers and acquisitions. Last year Nintendo acquired Canadian Luigi’s Mansion 3 developer Next Level Games – the company’s first buyout in more than a decade.
And recently president Shuntaro Furukawa reiterated that the company plans to grow its game development capabilities organically rather than through acquisitions.
It’s been forecast that the gaming market will hit a record $150 billion in M&A deals this year, but Kantan Games analyst Dr. Serkan Toto recently said he doesn’t expect Nintendo to play a major part in this.
“I really have a hard time imagining which of the big ones they could even be interested in buying,” he commented. “Nintendo will always stay Nintendo. The company has always relied on first-party games, and I don’t see any reason why they should change.”
