Nintendo continues to expand its development team with the acquisition of long-time partner SRD

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Nintendo's long-time development partner SRD Co. Ltd. has been purchased by Nintendo.

SRD is a developer with approximately 140 employees who are officially independent until now, has focused solely on first-party Nintendo software for the past 40 years, and is located near Nintendo's headquarters in Kyoto, Japan.

SRD was created in 1979 and has worked on games dating back to the original Donkey Kong, as well as Mario, Zelda, and Animal Crossing, to name a few.

The company's most recent projects include Game Builder Garage, Ring Fit Adventure, and 1-2-Switch.

Nintendo stated in a statement released on Thursday that SRD will "help to enhance the management foundation of SRD and secure the availability of software development resources for Nintendo," in addition to boosting the efficiency of its development.

The acquisition is scheduled to close on April 1, 2022, subject to regulatory approval.

Nintendo is now implementing a strategy to strengthen its internal development skills in Japan.

The Switch's unexpected success allowed the company to invest in new business opportunities, including an $880 million increase of its game production capability, according to a statement released in November.

Nintendo president Shuntaro Furukawa said at the same event that the company would spend up to 100 billion yen ($880 million) on internal game development and up to 50 billion yen ($440 million) on non-game entertainment software assets like movies.

Nintendo looked to have begun work on two big office expansions in Kyoto, Japan, a month later, purportedly in a bid to create more games in-house rather than outsourcing activities.

The company hasn't done much in the way of mergers and acquisitions in the past. Nintendo bought Canadian Luigi's Mansion 3 developer Next Level Games last year, marking the company's first takeover in over a decade.

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Shuntaro Furukawa, the company's president, recently stated that the company intends to build its game production capabilities organically rather than through acquisitions.

The gaming sector is expected to reach a new high of $150 billion in M&A deals this year, although Kantan Games expert Dr. Serkan Toto recently stated that Nintendo will not play a significant role in this.

"I'm having trouble imagining which of the large ones they could be interested in buying," he said. "Nintendo is always going to be Nintendo." I don't understand why the company should rethink its strategy of relying on first-party games."

h/s