The deal of this is quite simple. As was said Nintendo owned just 49% and Rare(Stampers)51%. The writing started going on the wall that the ship was sinking on the inside only. Nintendo having been bleeding cash for years paying them to produce NOTHING for years on end they got fed up and sold their part of it. Originally Rare earlier on the N64 and before pushed out a good quality game a year roughly, but they got sloppy, lazy, overly perfectionist whatever you want to call it. The point is suddenly games that were meant to appear say in 1997 mid ended up going out like Christmas of 1999. Stuff was showing up 1-2 years late, Conker showed up over 3 1/2 years late and got a cuteness to crude facelift. Each 6mo if you remember history there were stories of Nintendo injects cash into Rare (I think I remember like 50Mil USD sums at a time or whatever was needed, large sums though) regularly. They got fed up with the bullshit, excuses, and huge delays and when MS stupidly came along and offered them something like 400Mil USD to buy their stake Nintendo laughed their asses all the way to the bank around 2001-2 and took it. Rare at that rate finished Starfox Adventures for GC, then converted Kameo and other projects over to the xbox.
I think around that time the Stampers saw it was going bad, Nintendo bailed on them so their stream of easy sucker money was dried up, and they for whatever reasons bailed. When they went and over time all those who made the excellent stuff like the DKC titles(and 64), Jet Force Gemini, Conker, Banjo, Goldeneye/Perfect Dark, all them from the mid to high tier end jobs quit and some went to do the Timesplitters series, others formed up Zoonami, and others went random places. The Rare MS ultimately bought was all their newbies and B-team left overs and a shiny golden R emblem name for nearly a half billion dollars. Since then the games started on GC went ok, Grabbed by the Ghoulies their first total non-Nintendo starter product tanked and sucked hard. From there they did a few decent and some lame DS and GBA games, and of course you have the downgrade(gfx/audio aside) port of Conker to the 360, and the mediocre PD Zero. Rare sucks, rare died years ago, and MS bought a hollowed out husk of former talent.
Rare was never a traitor, they just got bought out by some morons at MS who didn't have a clue, or figured they could pump cash enough into it to make something great which still has yet to happen.
