I don't think that they will outright put the likes of Mario and Pokemon on the XBox.
I could actually see it. Not now perhaps, but given that Nintendo's life as a company is tied to its ability to make consoles...
Yeah, having a plan B in case The Unthinkable (Nintendo crashes out of the console making industry, whether its due to technological changes making dedicated consoles much more cost-ineffective or something else) happens is always a good idea. So the organization survives in
some form. Even if it winds up in a really strange place (in this case, on the Xbox Live streaming / digital download service).
Stranger things have happened. Hotel Mario and the cd-i Zelda games came from the same root that spawned the Playstation, Nintendo's biggest competitor bar none. Namely, the whole chaotic business dealings between Nintendo and Sony, and then Phillips, circa 1992. The fact that Nintendo never talks about the cd-i games tells a lot.
Businesses and organizations in general are weird. Organizational culture and plain inertia are bigger factors than most really realize (or want to realize). For example, Phil might be head honcho of the Xbox division - but he's not the only important cog. And we don't know what the other important cogs and executives want.
That's very interesting. It seems possible that it could be a slip up, but it's interesting nonetheless because it can also be an indication that Microsoft is willing to play ball, which Phil Spencer has gracefully confirmed already.
I'm really curious to see how Nintendo and Microsoft dealt with that as part of their discussions. Also, I'm putting forth a hypothesis:
Namely, that the power of the possible JFG spirit roughly = which kind of Microsoft rep gets in first. Sure, I'm of the belief that all three of B-K. Steve and Master Chief will get into Smash over the long term if the current trajectory continus, but if JFG's protagonist is Ace, then B-K's chances are looking good. If Advanced or Novice, I'm leaning towards Steve or Master Chief. Note that I said lean, no absolute.
Really though, if you ask me? I'll just be happy if there's new life breathed into Banjo-Kazooie as an IP, no matter if they'll get into Smash or not. I'm just a little worried about how, and that's difficult to answer in a gaming environment that avoids risk and wants safe smash hits due to the huge budgets involved. Still, if Steve or Master Chief gets in first, I'm still counting on a Kazooie / Tooie remake or port to the Switch. If only to gauge interest a la N-Sane Trilogy before commiting to something bigger.
Building a Threeie? Now that's a much tougher project. Yea, I know, the crusaders in here really want to see it as easy, but lay people like us have a big benefit: Not being under pressure from execs, who themselves are under pressure from shareholders and expectations, who themselves don't want to see their investments vanish. And I'm oversimplifying that tons. Not to mention the resources an AAA game needs. The reason I suspect a Threeie would be huge is that Threeie would mark a) the grand return of the franchise. Emphasis grand. And b) while Yooka-Laylee did well, a Banjo-Threeie will be expected to top that by a major margin to make it worth it in Microsoft's eyes. There are too many examples of sequels generating huge hype - some succeeding, others failing.
In the end, Smash has always been a business built around recognition and promotion. A mega business when every single game has sold 5 million copies. Or more. The stakes are high, not just because of the mega business or the fact that two console makers might be working together. People put so much stock in their favorite characters (like Banjo and Geno) that some see them not getting in as a catastrophy. An affront. Even if the real reasons are murky and not clear cut. The Rare spirits might be a really good clue to one thing: The negotations between Nintendo and Microsoft were probably tense and probably lead to a NDA. No matter what actually happened.