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It's actually not particularly baffling if you think about it. NIntendo owned roughly 49% of Rare at the time of Microsoft's purchase of the developer. Up to that point Nintendo had slowly and steadily acquired stock of Rare until they hit 49% ownership, paying a not insignificant some of money over the course of around a decade. Eventually Microsoft came sniffing around looking to acquire Rare and made an offer, around $190,000,000 for the 51% stake in the company. Rare went to Nintendo with Microsoft's offer and gave them the chance to match it and Nintendo not only balked at the idea due to the cost and their dissatisfaction with Rare over Starfox Adventures. So Microsoft bought the half of Rare that Nintendo didn't want and Nintendo's half as well.
Rare was not worth $375,000,000 in 2002, Microsoft got ripped off and that was immediately apparent with four straight flops on the Xbox line of systems. Nintendo was aware that Rare had lost its best employees to Free Radical, and that with the exception of Banjo Kazooie they did not have any mass market IPs. Whereas Microsoft allegedly had at least one or two out of touch executives involved in the purchase under the impression that buying Rare would include the DK IP. So really, Nintendo got around $180,000,000 for dumping dead weight.