Square was looking to increase its foothold on western audiences and sought Nintendo and its high-jumping plumber to aid them. The game was developed by Square in the Summer of 1994, months after the developer met with Nintendo. In fact, there's a case to be made concerning it having a role in helping Square Enix really get ahold of western audiences. The game was Mario's first foray into the stylings JRPGs, and famously celebrated amongst its dedicated fans. While Paper Mario has been added to the Nintendo 64's library, it is a headscratcher to me that the game that inspired it is not part of the service at all. My guess is that the rights Square Enix holds pertains mostly to the game's story and look, especially since Nintendo's Paper Mario still implemented the action timing-based mechanics used by its predecessor. Plus it was part of the Super NES Classic Edition's library, so making the jump to the subscription service should be as easy as it is a no-brainer. While Square Enix (known as Square during the time of the game's development) holds most of the rights, I do not see how Nintendo would not be able to add the game to the Super Nintendo's online library. RELATED: Speedrunner Loses Mario 64 World Record at The Final Bowser.
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