In a statement made from Seville, Spain, where the announcement was made to both a live and worldwide webcast audience during the company's annual X02 event, Chris Stamper, chairman and technical director of Rare, said, "Our mission at Rare has always been to make the industry's best games for the widest possible audience. Teaming with Microsoft gives us the best opportunity to accomplish this goal. Microsoft's dedication and commitment to game creators, research and development, and to gaming innovation made them the obvious partner to take Rare into the future."

"We've always insisted on pushing the envelope when it comes to creativity," added Tim Stamper, co-founder and creative director of Rare. "And now we get the chance to create for Xbox."

Rare co-founders Chris and Tim Stamper and their talented team of game developers and designers will continue to work out of Rare in Warwickshire, England. Rare was founded in 1985 as a partnership between the Stamper brothers and Joel Hochberg, now Rare president.

"This partnership significantly broadens our already outstanding portfolio of games that will be available for Xbox. And it also broadens our reach internationally as gamers around the world have demonstrated their fanaticism for what Rare consistently produces," said Robbie Bach, Chief Xbox Officer at Microsoft.

"The last time I was this excited was the first time I picked up a controller and played a game from Rare," said Ed Fries, vice president of Xbox Game Content at Microsoft. "As a gamer, you could hardly wait until Rare's next title was announced. You didn't know what genre it would be, but it didn't matter because you knew you were going to love it."

Rare grabbed the attention of the video game world in 1994 with its creation of "Donkey Kong Country." Selling more than 8 million copies, "DKC" went on to become the biggest- selling 16-bit title in history.

Rare became one of the premiere developers in the world, with sales averaging 1.4 million units per title and nearly 90 million games sold since the company was founded. Five of the top 20 all-time-best-selling N64 titles were developed by Rare, including "GoldenEye 007," the second-best-selling game in North America, with worldwide sales topping 8 million.

With today's announcement, Rare becomes the latest member of a star-studded lineup at Microsoft Game Studios, joining such prestigious worldwide developers as Bungie Studios, the masterminds behind the smash hit "Halo (TM)," named Game of the Year by Electronic Gaming Monthly. Rare's first creation for Xbox, "Kameo," is expected to reach store shelves next spring. Also under development is the highly anticipated sequel to "Perfect Dark." The company is expecting to develop at least five games over the next two years in a variety of genres, including racing, shooters and platformers.