Rare Moves Under Activision in Xbox Reshuffle, 24 Years After a Lost Acquisition Bid

Rare has been moved under Activision as part of a wider Xbox restructuring, creating a corporate connection that nearly happened more than two decades ago. The developer behind Sea of Thieves, Banjo-Kazooie, Perfect Dark, and many other landmark games will now sit within Activision's organization, rather than operating directly in its previous place under Xbox.

The shift arrives during Microsoft's latest internal reshuffle and alongside continued redundancies connected to a planned 3,200 job reductions across fiscal year 2027. For Rare, the change has a striking bit of historical symmetry: Activision was among the companies interested in buying the studio in 2002, but Microsoft ultimately won the contest and acquired Rare for $375 million that September.

It does not mean Rare is leaving Microsoft. Activision itself is part of Microsoft Gaming following Microsoft's acquisition of Activision Blizzard, so the studio remains within the same parent company. But the reporting line matters, particularly at a time when Xbox is reorganizing its development and publishing operations. It potentially puts one of Britain's most celebrated game studios closer to the business structure responsible for franchises including Call of Duty, Crash Bandicoot, and Spyro.

A deal that almost happened in 2002

Rare's path to Microsoft began with Nintendo. Throughout the 1990s, Rare became one of Nintendo's most important external development partners, producing major Super Nintendo and Nintendo 64 games including Donkey Kong Country, GoldenEye 007, Blast Corps, Diddy Kong Racing, Banjo-Kazooie, Jet Force Gemini, Perfect Dark, and Conker's Bad Fur Day.

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Nintendo held a 49% stake in Rare, but declined the option to acquire the other 51%. That opened the door to a competition for the studio. Microsoft emerged victorious, buying Rare in September 2002 for $375 million. Former Xbox executive Ed Fries has said Nintendo was also involved in the bidding despite declining to purchase the remaining stake outright, while Activision was another major party interested in acquiring Rare.

At that moment, Rare was one of the industry's highest-profile independent developers. Its games had been instrumental in defining both the pre-rendered visual spectacle of the Super Nintendo era and the transition to 3D console games on Nintendo 64. A purchase by Activision would have taken the studio in a radically different direction. Instead, Rare became an Xbox developer at the beginning of the original Xbox generation.

Now, more than 24 years after Activision missed out, Rare will operate under the Activision umbrella anyway. The route there was anything but direct. Activision is no longer simply the publisher that competed for Rare in 2002; it is now a Microsoft-owned division within a much larger gaming organization.

From Nintendo powerhouse to a different Xbox role

Rare's Microsoft era has often been measured against its extraordinary Nintendo output, an inevitably difficult comparison given the scale of its earlier hits. The studio's first years on Xbox produced games such as Grabbed by the Ghoulies, Conker: Live & Reloaded, Kameo: Elements of Power, and Perfect Dark Zero. Those projects showed a team willing to work in new genres and on new hardware, although they did not recreate the commercial and cultural impact of Rare's biggest Nintendo 64 releases.

That period also produced work that remains warmly regarded. The two Viva Piñata games developed a distinctive, colorful simulation series with a devoted following, while Banjo-Kazooie: Nuts & Bolts took the series in an unconventional vehicle-building direction. The latter remains divisive precisely because it departed so sharply from the 3D platforming formula associated with Banjo and Kazooie, but it has maintained supporters who value its construction mechanics and experimentation.

Rare was also heavily involved in Microsoft's Kinect period, creating Kinect Sports and related experiences. This added to a sense that the studio was being asked to adapt to changing Xbox priorities rather than return to the kinds of games for which it had become famous. That history makes the present restructuring especially notable to long-time fans: Rare has repeatedly had to find a new role within Xbox's evolving plans.

Sea of Thieves is Rare's modern foundation

Today, Rare is primarily associated with Sea of Thieves, the shared-world pirate adventure that has grown substantially since its launch. Its continuing seasonal support, emergent player encounters, cooperative sailing, and live-service design have given Rare a durable modern success. The game has become the studio's central focus and a key part of Xbox's broader multiplatform strategy.

Originally associated most closely with Xbox and PC, Sea of Thieves also reached PlayStation 5, bringing its pirate sandbox to a new audience. That expansion illustrates how different the current Microsoft Gaming landscape is from the one that acquired Rare in 2002. Platform exclusivity is no longer the only measure of a studio's value; sustained engagement, cross-platform communities, and long-term content operations are central considerations for many large publishers.

The move under Activision therefore should not automatically be read as a promise that Rare will return to traditional platformers, revive a dormant series, or alter Sea of Thieves overnight. No new Rare game, release schedule, or specific project direction has been announced as part of the restructuring. The immediate significance is organizational. Rare's leadership and teams will be overseen through a different branch of Microsoft Gaming, one with extensive experience operating globally successful, ongoing franchises.

That experience may be relevant to Sea of Thieves, but any practical changes remain uncertain. Activision's structure has long been shaped around major franchises with regular content pipelines and large support teams. Rare's current work already fits the broad model of a continually updated game, though its tone, community, and development identity are distinctly its own.

Banjo, Crash, and Spyro now share a corporate home

One especially curious result of the change is that several of the most recognizable mascots of the original PlayStation and Nintendo 64 era are now connected through Activision. Banjo and Kazooie join Crash Bandicoot and Spyro the Dragon under the same corporate banner.

These characters once represented different sides of the 1990s console landscape. Rare's Banjo-Kazooie was a defining Nintendo 64 platformer, while Crash and Spyro became closely associated with the original PlayStation. Their current alignment does not signal a crossover or a shared game project, and fans should not treat it as evidence of one. Still, it is an unusual reminder of how much the games business has consolidated since that era.

Rare's legacy extends even beyond the franchises currently active in its catalog. Its early work includes the Super Nintendo project that eventually developed into Banjo-Kazooie, a piece of the studio's history that has recently attracted renewed preservation interest. That archival attention speaks to the persistent fascination surrounding Rare's 1990s output, unreleased concepts, and creative evolution.

What the restructure means--and what it does not

For players, the most important point is that Rare remains part of Microsoft Gaming, with Activision becoming its new organizational home. The decision comes amid broader changes and job reductions, which gives the announcement an understandably uneasy context. A new reporting structure can affect budgeting, staffing, collaboration, and project approvals, but there is no confirmed detail yet on how the transition will change Rare's day-to-day operations.

It also remains too early to draw conclusions about the studio's future beyond Sea of Thieves. Rare has a catalog filled with names audiences would like to see return, from Banjo-Kazooie and Perfect Dark to Viva Piñata and Jet Force Gemini. Yet corporate ownership and organizational placement do not by themselves make revivals happen. Any new project would require a creative plan, a development team, resources, and approval from Microsoft Gaming's leadership.

What is clear is the historical irony. Activision once lost the fight to acquire Rare at the moment the studio was leaving Nintendo's orbit. Microsoft won that battle and spent more than two decades shaping Rare's next chapters. Following Microsoft's purchase of Activision Blizzard and the latest Xbox reshuffle, Activision has finally become Rare's home within the larger Microsoft organization.

For a studio whose history spans the ZX Spectrum, Nintendo's 16-bit and 64-bit eras, Xbox consoles, PC, and now PlayStation through Sea of Thieves, it is another significant turn. Rare's future has not been detailed, but its place inside Microsoft Gaming has changed once again--and a long-ago bidder is now overseeing one of gaming's most storied developers.