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It's entirely possible things wouldn't have gone much differently. Nintendo has been dropping shit games like the one's rare has been forced to work on since they were bought. What's to say it would have changed?
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There would probably be some changes but the one I think would be notable would be the non-existence of the newest DK games. This could happen if Rare is not put in development of said series.
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There would have been indeed changes, but I imagine they can't be as bad as what Microsucks has been doing to Rare for a long time now. If Rare was still with Nintendo. I imagined these things would have likely happened.
-Donkey Kong Racing would have been released for the gamecube.
-Banjo-threeie would have happened(for either the gamecube or Wii console)
-Games that were in development for the gamecube such as Ghoulies, Kameo, and Perfect Dark Zero would have been released for the gamecube instead of being reworked for the Xbox consoles.
-New IPS would have been introduced from Rare(instead of most of them being axed from Microsoft).
- 3DS games from Rare would have been a reality.
- Rare would have had been creative consultants for future DK games if they weren't developing them.
- Rare's games outside of DKC(e.g Conker, Perfect Dark) would have been released for the Virtual console(or would have gotten remade for the Wii console).
- Conker's Other Bad Fur Day would have happened.
The list could go on.
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While it's easy enough to blame Rare's downfall on Microsoft, I don't think it's entirely fair.
If Rare had kept developing for Nintendo then the only assumption you can make with 100% certainty is the Grabbed by the Ghoulies would have been released for the Gamecube as that was an obvious port for the Xbox. That game was quite mediocre so Nintendo didn't miss much there. I don't think Donkey Kong Racing was as complete as some believe it to have been because it probably would have been ported to the Xbox just without Nintendo characters. If not, then they might have reused some of its assets, which they haven't since Rare has yet to release a cart racing game of that style. With that said, Donkey Kong Racing still probably would have come out on the Gamecube. Who knows, maybe Microsoft did kill any cart racer they had left over.
As far as Banjo Threeie goes, I'm sure Microsoft would have loved to have a sequel to two very popular games on their new system. If anything, it could have helped steal some business away from Nintendo. It's well known by now that the next Banjo platforming game was planned but it never turned out for one reason or another. There is no reason to believe that Microsoft is shutdown its development. Especially since they tried a Banjo Kazooie remake in the style of Conker Reloaded afterwards but that got scraped too. If Rare were to have stayed with Nintendo then it's very likely that the third Banjo game would have endured the same miasma of a development cycle.
Microsoft did kill a lot of potential IPs, that we know for sure. Knowing that doesn't change the fact that they were probably not going to be that good anyway seeing as Rare hasn't made a good game since the acquisition, at least in my opinion. Nintendo is known for being quite controlling as a publisher too, so they might have acted similarly to Microsoft in this case.
Portable development is a weird one. Apparently, Rare still has some ability to develop for Nintendo handhelds since Microsoft doesn't exist in that market. That's how Diddy Kong Racing DS got made. They haven't seemed to make much use of this ability since though so I'm unsure if this has changed.
All of this is speculation of course. It really appears as though Rare just stopped making good games. It's probably true that you can say that they moved to Microsoft is when they went downhill but I don't think you can say that's exactly why. The company during the period from 2002 (when Microsoft purchased them) to 2007 (when the Stamper brothers left the company) was simply not near the quality of the company during the SNES and N64 era. Since 2007 many other important members have left as well and that is reflected in the work done since.