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Microsoft announced that it would acquire ZeniMax Media, the parent company of Bethesda Softworks, for $7.5 billion—in cash.
This will be the third-largest deal in Microsoft’s history and adds a series of iconic game franchises to its portfolio.
The gaming industry is expected to be worth more than $200 billion in annual revenue in 2021 and games are the primary growth engine. Games are also fueling new cloud services like Xbox Game Pass, Playstation Now, and Nvidia’s GeForce Now. Xbox Game Pass reached a new milestone of over 15 million subscribers.
Microsoft’s Xbox boss Phil Spencer said (in February) that Amazon and Google are the main competitors going forward’. Sony and Nintendo aren’t the main competition in the cloud world.
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.
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| Over a half dozen popular game will now be in Xbox Game Pass |
The planned acquisition includes publishing offices and development studios spanning the globe with over 2,300 employees, including Bethesda Softworks, Bethesda Game Studios, id Software, ZeniMax Online Studios, Arkane, MachineGames, Tango Gameworks, Alpha Dog, and Roundhouse Studios. Bethesda’s critically acclaimed and best-selling franchises include The Elder Scrolls, Fallout, DOOM, Quake, Wolfenstein, and Dishonored, among others.
Bethesda parent company ZeniMax Media was founded in 1999 by Chairman and CEO Robert A. Altman; Bethesda’s structure and leadership will remain in place.
Microsoft expects the acquisition to close in the second half of the fiscal year of 2021 and to have minimal impact on non-GAAP operating income in fiscal years 2021 and 2022.
What do we think?
This a huge move for Microsoft it can now add the huge collection of Bethesda games to their Xbox Game Pass making the $14.99 a month subscription more attractive to console gamers. There is a Game Pass for PC as well. As of now Microsoft games are available on STEAM, the Halo: Master Chief Collection, the new 2020 Flight Simulator as well as many others.
Will Microsoft continue to distribute games via STEAM if Game Pass becomes a more formidable product?