The Nintendo alliance: a cross-shareholding for IP (2015)

Why layer a cross-shareholding on top of the alliance?

At the core of this decision is that a business alliance alone was not enough — it layered a cross-shareholding on top. Nintendo had to open to DeNA its intellectual property, viable worldwide, and DeNA to open to Nintendo its experience building and operating mobile services. A relationship in which each entrusts the other with the know-how that is the source of its strength is hard to protect by the clauses of a contract alone. As Moriyasu said, it was “to build a robust relationship of trust over the long term”; the mutual investment can be read as collateral, in the form of capital, that neither could easily walk away from. The balance of roughly equal outlays was a design meant not for a control in which one stood above the other but for an equal collaboration.

Yet the tie of capital did not presuppose permanence. In 2022, after the joint development bore fruit and several hit titles were born, DeNA sold half its holding, answering the market’s demand of the day to review cross-held policy shares. The need to secure trust with capital is highest at a relationship’s outset; once the business begins to run on its own, that need fades. That the alliance continued even as the mutual investment shrank bears out that the cross-shareholding was not the goal but the means to get the collaboration on track. For a social-game company whose growth had slowed, seeking its next growth by joining with powerful outside intellectual property, this was an alliance drawn to include how capital would be used — and when it would be let go.