Microsoft has bought ZeniMax Media, the parent video games company of Bethesda for $7.5 billion in a landmark deal. This announcement was made on Monday as the biggest gaming acquisition in Microsoft’s history which is three times the $2.5 billion paid for Mojang, the company behind Minecraft, in 2014. Hence, it is not only the most expensive video game acquisition but the best.
Bethesda is one of the largest privately-held game developers. Its studio has produced hit titles such as “Doom,” “Fallout,” “Elder Scrolls” and “Skyrim.” “Starfield,” another highly anticipated title in the gaming community, is also a project of Bethesda.
Microsoft announced that the deal will help beef up its Xbox Game Pass subscription service for consoles and PCs, which it says has more than 15 million subscribers.
“With the addition of Bethesda, Microsoft will grow from 15 to 23 creative studio teams and will be adding Bethesda’s iconic franchises to Xbox Game Pass,” Microsoft said. “This includes Microsoft’s intent to bring Bethesda’s future games into Xbox Game Pass the same day they launch on Xbox or PC.”
The company confirmed that Bethesda games, such as Starfield, which is currently in development, will launch on Xbox Game Pass the same day they launch on Xbox or computers.
This deal not only gives Microsoft Inc. access to Bethesda alone, it includes other properties owned by the company, including, the Elder Scrolls, Fallout, Wolfenstein, Quake, Starfield and DOOM.
Although Microsoft bought Bethesda, it is confirmed that the company will still remain independent. Pete Hines, Bethesda’s senior vice president of PR and marketing, said in a blog post.
“We’re still Bethesda. We’re still working on the same games we were yesterday, made by the same studios we’ve worked with for years, and those games will be published by us,” “[The deal] allows us to make even better games going forward. Microsoft is an incredible partner and offers access to resources that will make us a better publisher and developer.”
Furthermore, Bethesda Executive Producer Todd Howard wrote in a blog post.
“Like our original partnership, this one is about more than one system or one screen. We share a deep belief in the fundamental power of games, in their ability to connect, empower, and bring joy,” “And a belief we should bring that to everyone – regardless of who you are, where you live, or what you play on. Regardless of the screen size, the controller, or your ability to even use one.”
In the press release, ZeniMax Chairman and CEO Robert A. Altman says that Microsoft’s resources will improve their upcoming offerings.
“This is a thrilling day for this company, our employees, and our fans. We have enjoyed a close partnership with Microsoft for decades, and this deal is a natural progression of those years working together,” said Altman. “The big winners today are our fans. We are continuing to develop our slate of AAA games, but now with Microsoft’s scale and entire Game Stack, our games can only get better.”
It is easy to conclude that this deal announcement is Microsoft strategy to increase sells for its new Xbox Series X and Xbox Series S consoles which was to go live a day after, in order to compete Sony’s PlayStation 5 which started accepting pre-orders a week before.
However, according to George Jijiashvili, a senior analyst who researches video games at Omdia,
“This deal is more of a long-term investment.” “I think that this announcement has little to no impact on the sales of PlayStation 5 and Xbox Series X at launch because the reality is that most of the console gamers have already set their minds on a particular console,”
Jijiashvili said Sony is still in a better position than Microsoft and expects PlayStation consoles to outsell Xbox consoles two-to-one in the first couple of years at least. Because the deal won’t be finalized until next year, it won’t have immediate impacts, he predicted. However, he said the deal will help make Xbox’s cloud gaming platform more attractive to gamers.
“This was the first of its kind where Microsoft is really kind of putting its money where its mouth is in terms of wanting to really grow this Xbox ecosystem through subscriptions,” he said. “It is a huge deal.”
Above all, Microsoft CEO Satya Nadella said in a statement.“As a proven game developer and publisher, Bethesda has seen success across every category of games, and together, we will further our ambition to empower the more than three billion gamers worldwide.” Microsoft Corp, which is based in Redmond, Washington, expects the deal to close in the second half of fiscal 2021.
In conclusion, Microsoft has not opted for the exclusive route with its past acquisitions, but this may change given the scale of this acquisition. In addition, this deal should compensate Microsoft lost out to Oracle in a bid to acquire TikTok.