Basically the company board has approved a policy where the company will issue new shares if one owner reaches a certain percentage of current shares. Those shares can be then purchased by the existing shareholders (excluding the one(s) that already owns more than the percentage) with a discount.

So Nintendo could have such a policy in place that if one shareholder goes over 20%, new shares will be issued to other shareholders, lowering the value of each share, and effectively also the relative amount of shares (percentage) owned by that one shareholder. That basically leaves only one option, the buyer attempting the takeover would have to negotiate with the board directly. And in the case of Microsoft, the board would laugh at their face.

Maybe they could achieve the takeover via shell shareholders remaining under the percentage each, and get them to vote in a new board that would revoke the policy, but that’s way more difficult to pull off.