Gaming

Microsoft acquires Zenimax Media for $7.5bn on the eve of Xbox Series pre-orders



Microsoft is acquiring Zenimax Media for $7.5bn. In a blog post posted to Xbox Wire, Phil Spencer welcomed the studios and IPs of one of the world’s most successful publishers to “Team Xbox”. With reciprocating posts from Pete Hines and Todd Howard

For its money Microsoft is getting nine studios by our calculations, some with multiple teams and locations: Bethesda Softworks, Bethesda Game Studios, id Software, ZeniMax Online Studios, Arkane, MachineGames, Tango Gameworks, Alpha Dog, and Roundhouse Studios. With a total of 2,300 staff across the whole organisation. 

And it’s picking up a treasure chest of IPs: Elder Scrolls, Fallout, Wolfenstein, Doom, Dishonored, Prey, Quake, and the upcoming Starfield. 

The move comes with surgical planning on the eve of the Xbox Series X and S pre-orders going live. While Microsoft hasn’t yet made any announcement about the exclusivity of future titles to the platform, it’s certainly enough to make consumers think yet again that Xbox Game Pass will provide unbeatable value during the next generation. 

Of course, Microsoft does have a history with Minecraft of maintaining cross-platform releases for a huge IP. But that was before Xbox Game Pass. The company will be keen to add these huge IPs to the service, which will benefit not just Xbox but also hugely boost the service on the PC market as well. 

And a quote from Bethesda’s Todd Howard muddies the waters on what Microsoft is planning in this regard:

“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.”

And Bethesda’s Pete Hines added: “But the key point is 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.”

Now $7.5bn is a lot of money, it’s almost the combined total of what Marvel and Lucasarts cost Disney to put it in perspective. Bethesda was valued at ‘just’ $2.5bn back in 2016, and while the value of the industry has grown since then, Bethesda was riding high in 2016 on the success of Fallout 4, Doom and the upcoming Dishonored 2.

This is certainly not a bargain, not an opportunistic move, this is a determined purchase to fulfil a very specific set of strategic requirements.

It’s hard not to feel that Microsoft, following on from the recent EA deal on Xbox Game Pass, simply feels that its strategy is correct and now is the time to spend big and take the games industry (PC and console at least) under its control… before someone else does (the lessons of Netflix and Spotify are notable here). Microsoft has the money to spend and feels that now is the time to invest in the industry, before someone else does. 

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