Before Microsoft released the original Xbox way back in 2001, the tech giant actually considered forming an alliance with both Nintendo and Sony to create a gaming console.
Xbox co-creator Ed Fries said that Microsoft proposed that Nintendo make the hardware for the console, while Microsoft would have taken care of the software and networking.
“When we first started thinking about doing Xbox, we met with Nintendo,” Fries said in an interview with IGN. “We sat down with [late Nintendo CEO Satoru Iwata] and others and we said, ‘This is what we want to do, could we partner? Could we work together on this?’ And basically they said no.”
After an initial rejection from Nintendo, then Microsoft CEO Bill Gates went to Sony with the same offer. Again they were denied. Fries also denied rumors that Microsoft was in talks to buy Nintendo stating, “Actually, if anyone [at Microsoft] thought about buying Nintendo, I never heard that,” he said.
Microsoft isn’t the only gaming company that wanted to create a gaming console in conjunction with another company. Before the original PlayStation, Nintendo and Sony worked together on a “Nintendo PlayStation” console. Prototypes were even created before the two companies separated.