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Who Killed Rare?

Did Microsoft ruin Britain's greatest game studio?

Through a locked gate, down a winding path and by a still pond a few miles outside of the leafy village of Twycross, England, a bonsai tree stands. It was a gift given to Rare by Shigeru Miyamoto, the most famous game designer in the world, as a thank-you for the game developer's critical and commercial success in creating games for Nintendo, the most famous game maker in the world.

For Rare's staff arriving to work at 8:30 sharp each morning, it has served as a reminder of the company's heritage, of who they are, of how lucky they are to be a part of something so admired, so rare. An unassuming trophy of past glories, it's also an inspiration for future goals, a symbol carefully cultivated to weather trends, transcend fashions; rooted, a gnarly resolution.

On 20th of September 2002, Microsoft paid $375 million for this bonsai tree and all that it symbolised: creative excellence, technical mastery, innovation, originality, soul and the precious fingerprints of Nintendo. The fledgling Microsoft Game Studios, desperate to acquire world-class talent that could help establish its game console, saw in that tree everything it desired to become.

10 years later and Bill Gates is yet to plant a bonsai tree in Rare's once-fertile grounds.

In that time Rare's critical and commercial success has tumbled, the studio's games struggling to live up to their creator's name. Two years after the acquisition, Chris and Tim Stamper, the brothers who founded the company in 1982, departed into "exploring new opportunities" obscurity. Faithful fans became disillusioned while, apart form a couple of notable exceptions, the developer's new, scattershot directions have failed to inspire loyalty or passion in the next generation of players and the next again.

What went wrong? And who - or perhaps what - is to blame?

Elements of Power

"Microsoft and Rare was a bad marriage from the beginning. The groom was rich. The bride was beautiful. But they wanted to make different games and they wanted to make them in different ways."

Martin Hollis joined Rare in 1993, a year before Nintendo bought a 49 per cent stake in the developer. His first project was the coin-operated Killer Instinct, an arcade machine for which he coded an entire operating system. Following the Nintendo buyout Hollis, a coding genius, created Goldeneye, laid the blueprint for Perfect Dark and finally left for America to help develop the GameCube console. His time at the company coincided with what many view as its golden years, a period during which Rare simultaneously broke new ground and perfected old with a string of blockbusters stamped with the Nintendo seal of approval.

Rare's Twycross headquarters.

"Rare was always looking East at Japanese and Nintendo's games in particular, with their open-hearted childlike vibrancy and playfulness," explains Hollis. "Meanwhile, Microsoft had a US-centric style to its games, a flair of machismo and testosterone. For the first decade after the Microsoft sale the major problem for the creativity of the studio has been direction. Looking in from the outside it felt as if neither Microsoft or Rare could work out where it was headed."

From the inside the studio's gates, too, the changes to Rare introduced by Microsoft tampered with the recipe of the company's success, leaving teams feeling disorientated, and even downcast.

"The changes were imperceptible at first, but became increasingly rapid as time went on," says Phil Tossell. Hired by Hollis in 1997, he cut his teeth on Diddy Kong Racing before working as lead engineer on Dinosaur Planet (which later became Starfox Adventures). He was present at the company through the Microsoft acquisition, and was promoted to Director of Gameplay in 2009 when he oversaw development of Kinect Sports. "For me personally, the atmosphere became much more stifling and a lot more stressful," he says. "There was an overall feeling that you weren't really in control of what you were doing and that you weren't really trusted either.

"There was also a gradual introduction of certain Microsoft behaviours that crept into the way we did things: lots more meetings, performance reviews and far more regard for your position within the company," he said. "While these weren't necessarily good or bad per se, they began to erode the traditional Rare culture and way of doing things. Many of the people who'd been there a long time found these changes extremely hard to accept."

Trouble in Paradise

That culture appears to be the secret of Rare's success in the 1990s, a unique setup in game development at the time. "The general feeling at the time was that, as a company, we were invincible and that anything was possible," says Tossell. "It was incredible to be surrounded by so many talented people, all of whom were single-mindedly focused on making the best games that we could. I never realised it at the time, but I think what was most unique was the sense of freedom and responsibility that the Stampers gave to each team. They trusted us to get the job done. As a result, you always felt like you wanted to do the absolute best that you could for them."

Martin Hollis.

Hollis agrees: "Mainly Tim and Chris left us to our own devices. They recognised the talent and left teams to make their game, intervening only when a team was broken or under-performing in their judgement. This was a wise move as it left us self-motivated. I'd say 70 or 80 per cent of the employees were super energised and focused on producing something incredible. I don't recall anyone saying so, but I'm certain it was at the back of all our minds that we were privileged to be in that situation, amazingly well funded, great colleagues, and a sweetheart relationship with Nintendo."

"That's not to say that it was easy," says Tossell. "The hours were long and the environment was very competitive: not in the sense of team members competing with each other, but competition between teams. I think this was a deliberate ploy by Tim and Chris to push each team further and harder.

"The old site was a converted farmhouse and by the time I joined there were already around 100 staff and fitting all the cars in was literally like completing a jigsaw puzzle. Each team was in a separate barn and their access key only worked on their barn. It's been so long that I can't actually remember which barn I was in, but we were upstairs and below was the Banjo-Kazooie team. Work always began at 9 on the dot. Lunch was just 30 minutes and then it was back to work. Most days I would work until around 10pm, but it really depended on what you were doing at the time. It wasn't unusual to do 60 or more hours' overtime a week."

In The Perfect Dark

Despite the critical and commercial success the studio enjoyed during the Nintendo 64 years, rumours soon began circulating about a potential buyout. "Rare was famous for its rumour mill, largely on account of each team being segregated," says Tossell. "So there were always a lot of rumours swirling around about a buyout. Many teams were between projects at this time, so it was really distracting, but I had my head down on completing Starfox and so I didn't pay as much attention. I was actually glad to be busy at the time. I guess our only concern was getting the game finished and released before any buyout occurred."

Viva Piñata.

Justin Cook, designer on Viva Piñata, worked in the testing department in 1999 when the most junior staff members began to hear murmurs of a buyout. "N64 had been disappointing for Nintendo - well, in comparison to the success of SNES - and GameCube didn't look like it was going to change their fortunes. Back in testing at the time we were stupidly cocky and thought that Rare was the hottest studio in the world. There was all kinds of gossip about potential buyers. It felt exciting rather than nerve-wracking, which probably shows how far off the mark we were. Microsoft didn't even crop up as a potential buyer until late in the day. I believe there were already some substantial dealings with Activision before Microsoft appeared as a potential buyer."

In fact, Rare had been looking for a potential buyer for some years by the time discussions with Microsoft began. "The company was on the market for several years, two years certainly, and this was driven by the majority owners Tim, Chris and Joel Hochberg," says Hollis. "The majority of middle management were enthusiastic followers of the idea but I always felt uncomfortable. EA, Activision, Disney and obviously Nintendo were all mooted. In the end I understand Mr Yamauchi [Nintendo's President] declined to offer more than a fraction of the value Rare was asking; shrewdly, it would seem. Meanwhile Microsoft had a strategic reason to buy, two reasons really: firstly so Nintendo would not have Rare's games, and secondly so that Microsoft would."

Killer Instinct

At the time, Ed Fries, the architect of Microsoft Game Studios and the broker of the Rare acquisition, believed the developer was out of bounds. "A few years before the acquisition, I had a chance to meet the Stamper brothers for the first time," he says. "We spent about an hour together and got to know each other. At the time I didn't think an acquisition would be possible because of their close relationship with Nintendo. It was a couple of years later when people from Rare reached out to us to explain what their situation was.

"They were 50 per cent owned by Nintendo and Nintendo had an option to acquire the other half of the company by a certain date. If they didn't exercise that option then Rare had the option to find a buyer for Nintendo's half. Nintendo had already extended the option by one year, but it looked like they weren't going to acquire the other half of Rare, so the Rare guys started looking around to see if anyone else might be interested. We were a logical choice for them to call."

"I probably heard about a buyout officially when Tim and Chris sat down with all the leads to talk with them about it," says Tossell. "They were very open in regards to the options and what it might mean. Initially I think there were three possibilities: Nintendo, Activision and Microsoft. We actually had a show of hands in the meeting to indicate which of the options we preferred, but obviously in the end it was really down to major shareholders..."

Fries knew that other publishers were courting Rare, and, despite making a fast move, it looked as though Microsoft had missed its opportunity. "We knew there were other bidders," he says. "We wanted the company and made an offer, but were told that Rare had decided to go with Activision instead. I was desperate for more experienced console developers and there just weren't any other companies like Rare on the market so we raised our offer, but were told they had decided to go with Activision. Then the Activision deal fell apart for some reason and so they came back to us and asked if we were still interested. We said we were and the deal was completed relatively quickly."

Microsoft Office

Once the deal had been signed the question for Microsoft was how to manage the culture shift for staff. "By this point we had acquired quite a few studios and had tried many different strategies," explains Fries. "What seemed to work best was to preserve the corporate culture of each studio as much as possible so we tried not to be too heavy-handed. We thought the employees would want to think of themselves as working for Rare, not Microsoft, but apparently some people who worked there were disappointed we didn't come in and make more changes. At least that's the impression I had at the time."

For Cook, as for Tossell, the changes in the studio culture were slow and almost imperceptible at first, and many had a positive effect on the staff. "One of the biggest changes was the freedom to talk about projects that you weren't working on," he says. "We were allowed to use the internet during working hours and we were allowed to listen to music while working, so a lot of the early changes were positive to morale."

However, in time it became clear that everyone had underestimated how much of the studio's success was down to Nintendo's gentle steering. "It seemed like Microsoft was really a novice in the games industry and for some time they left us to try and see how things worked," Cook explains. "They wanted hit games for their console and since they weren't sure how to go about it they trusted Rare to do what was necessary. The problem here was that Rare was a very long way from the very corporate structure of Microsoft and when Rare had made games it wasn't in isolation from Nintendo but as a creative partnership.

Justin Cook talking to a younger Eurogamer Editor Tom Bramwell.

"The kind of support that Nintendo offered wasn't available at Microsoft because Microsoft hadn't the experience. Ed Fries was aware of this, he was a very understanding person and wanted to foster studio culture and allow studios like Rare to build a space for themselves inside the Microsoft structure. Microsoft had a strong corporate identity and was very successful so it was only a matter of time until they applied their tried-and-tested corporate success to their new studio acquisitions."

About a year after the acquisition Fries left Microsoft and the changes became more pronounced. "The biggest change for me was the closing of the testing department. I'd already 'escaped' into design but the shock of losing the up-and-coming talent being developed in testing was a big wake-up call. Looking back now it seems obvious to me that games were bigger and took longer to develop. It made little business sense to keep people employed without work between projects. Still, that doesn't account for the human cost of redundancy or the talent that was lost when testing was no longer an in-house concern.

"The other staffing change was the introduction of a producer role. The producer was someone who smoothed out development and took some of the heat off the project leads so they could do what was needed, to get the game done. Producers were a new thing to Rare. It wasn't a role that was instantly understood, and each project had a Rare producer and a Microsoft producer - one either side of the Atlantic. Rare managed without them before because game teams were smaller and could be controlled by the team. It was another sign of the changes in the industry."

Two years after the acquisition, the announcement came that the Stamper brothers were leaving the company to explore new ventures. While Fries is uncertain as to whether this had anything to do with Microsoft's changes to the studio ("I don't know why they chose to leave or if it had anything to do with how they were treated by Microsoft after I left") Hollis is sure that it was a significant contributor to their decision. "On a human psychology and organisational motivation side level, the money-based motivation of bonuses shrivelled as games became increasingly competitive.

"Meanwhile, Rare's games became unsuccessful. The other money-based motivation of shares was a one-shot. Once it paid off I guess Chris and Tim lost all interest and energy, effectively sitting out their stipulated term. This passivity percolated down through the whole company."

Bad Fur Day

So did Microsoft ruin Britain's greatest game developer? "On a personal level, the old Rare was better for me," says Tossell. "It was much more in tune with the kind of place I want to work and the kind of people I want to work with. There was much greater freedom, personal responsibility and creative input.

"But taking a wider view, I think what has happened to Rare really just reflects what has happened in the industry at large: larger teams, larger budgets and reduced risk. And in that sense I think the Rare of today is in a better position to deal with the demands of the modern game industry. It was undoubtedly a challenging process for everyone at Rare and I'm sure at Microsoft as well, but ultimately I think it was necessary for the continued survival of Rare. The games industry is driven by certain cycles, and with escalating team sizes and production costs, I don't think the Rare of old could have continued as it was."

Cook agrees: "You can't compare 'old' and 'new' Rare because the comparison is no more valid than comparing steam engines to bullet trains. What is incredible is that Rare still exists. It is still making high-quality games that millions of people play. There have been bigger and more successful studios but there aren't many that are still in business and going strong. Rare is a survivor and as we approach the next massive upheaval in the games industry it would be foolish to write off a studio as talented and adaptable as Rare."

Ed Fries.

Tossell is eager to point out that the studio is still home to some of the best talent in the industry: "A lot has been made by press and fans of the fact that many old-time Rare employees are no longer with the company, and that how somehow as a result that there's no talent left there anymore," he says. "But I can safely say there are still many talented people there and I wish them continued future success. My only regret is that some of the cool prototypes we were working on never got to see the light of day."

Few who worked at or with Rare have bad things to say about the company. Everyone interviewed for this feature wished the company well and emphasised how much they respect the current staff working there. For Hollis, there is a renewed sense of hope and direction at the studio. "Maybe the going was tough in the early 2000s but it feels they now have a good direction with Xbox avatars and Kinect Sports. I wish them the best, and I'm looking forward to their next game with great affection."

But it's difficult to square this positivity with the reality of Rare's current output. Viva Piñata and Banjo Kazooie: Nuts and Bolts are games that demonstrate the clear talent and ability still at the studio. But, arguably, Rare has lost the ability to package and present its ideas in a way that feels contemporary. Today's Rare games feel outdated, as if the company has maintained a style that has slipped from fashion and failed to transcend it. For all the fondness and admiration of these ex-staff, there's a faint undercurrent of melancholy and loss of a time that no longer exists.

But for Fries, the man who bought Rare, that seed of creative brilliance, symbolised by Miyamoto's bonsai, which still stands short in Rare's grounds, can be found in even the company's most conflicted releases. "My seven-year-old son woke me up a couple mornings ago because he couldn't find Banjo Kazooie: Nuts and Bolts," he says. "As you might imagine, he has lots of games to choose from in our house. But that's the one he wanted to play. That game, of all the games. It says to me that there is still some magic left at Rare."

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