Last spring, Microsoft (NASDAQ:
) announced that it would pour
into Barnes & Noble's (NYSE:
) Nook business. This was an unusual move for Microsoft, but it
seemed like a sound investment for the firm to make. The Windows
maker needed content and a potential partner in building a tablet
and other devices. By signing with Barnes & Noble, Microsoft
Despite a plethora of rumors, Microsoft did not use this
partnership to build the company's
. Microsoft performed that task all on its own.
Thus far, Nook content has not become a huge part of the Windows
8 App Store. The e-reader app currently holds a
3.5 star rating
from just 731 reviews. Comparatively, the iOS version has received
nearly 30,000 reviews
and holds a rating of 4.5 stars.
It is wholly possible that Microsoft invested in Barnes &
Noble to reap the company's long-term benefits. That strategy
worked quite well when Microsoft acquired Bungie in 2000.
The Windows maker paid
$20 to $40 million
for that acquisition, which gave Microsoft ownership of the Halo
brand. Microsoft later sold Bungie but retained the prized
franchise, which earned
more than $200 million
this year alone.
Not every investment has paid off, however. Microsoft paid
nearly $400 million
to acquire Rare Ltd. after Nintendo (OTC:
) announced that it wanted to sell its stake in the studio. Rare
was responsible for creating the hugely popular Donkey Kong Country
series and GoldenEye 007, among others. Microsoft hoped it could
produce a game of similar value for Xbox.
Thus far, that has not been the case. Grabbed by the Ghoulies,
Rare's first game for Microsoft, sold a mere
. Perfect Dark Zero topped out at
-- far below the
2.5 million units
that the original Perfect Dark sold for Nintendo.
Viva Pinata was considered a hit for Microsoft after selling
1.5 million units
, but it pales in comparison to the
millions of games
Rare sold with Nintendo.
Microsoft finally had a major hit on its hands when it sold
more than 5.4 million copies
of Kinect Sports. The sequel, however, declined heavily to just
2.1 million units
While those games have sold far less than all of the Halo titles
(except for the offshoot, Halo Wars, which sold
2.2 million units
), they have provided Microsoft with some revenue. At this point it
is unclear if the Nook investment has done the same.
That could be a problem if Barnes & Noble continues to
deteriorate. This morning the company announced that Nook sales
decreased 12.6 percent
during the nine-week holiday period. The decrease is likely caused
by the decline of Nook tablet and e-reader sales, which fell by an
undisclosed amount. Meanwhile, digital content sales increased 13.1
If Microsoft came to Barnes & Noble simply to gain access to
the firm's content and licensing deals, it might eventually earn a
return on the investment. Investors can only hope that return is
more fruitful than Grabbed by the Ghoulies.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice.
All rights reserved.
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