30 employees left Rare during the transition. This left Donkey Kong Racing, due for release for the GameCube, unreleased. Character trademarks from games developed by Rare for Nintendo consoles, such as Conker of Conker's Bad Fur Day and Banjo of the Banjo-Kazooie series, were retained by Rare intellectual property created by Nintendo, such as Donkey Kong and Star Fox, were retained by Nintendo. Rare became a first-party developer for Microsoft's Xbox. Rare was interested in Activision's offer, but the deal collapsed and on 24 September 2002 Microsoft paid $375 million for the company. In early 2000, workers from Activision and Microsoft began visiting Rare with purchase offers.

According to Rare founders Tim and Chris Stamper, they were surprised that Nintendo did not directly acquire the studio. Game development costs gradually increased, and Nintendo did not provide Rare with more capital nor did they purchase the company's remaining stake. During this period, Rare received international recognition and critical acclaim for games such as Donkey Kong Country, GoldenEye 007, Banjo-Kazooie, Perfect Dark, and Conker's Bad Fur Day. Rare became a prominent second-party developer for Nintendo, who came to own a large minority stake of the company. During this time they created successful titles such as Wizards & Warriors, Battletoads, and R.C. During its early years, Rare was backed by an unlimited budget from Nintendo, primarily concentrated on Nintendo Entertainment System (NES) games. The company was established in 1985 by Tim and Chris Stamper, founders of Ultimate Play the Game. ADK for SNK units, Rareware for Nintendo and afterwards Microsoft, and Sport Freak (which largely advances the Nintendo -unique Pokmon game string). Rare is a British video game developer located in Twycross, Leicestershire.

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