Microsoft to Buy Bethesda for $7.5 Billion to Boost Xbox

Posted on by Javier Garay
(Graphic via Microsoft)

In a move no one in the gaming industry saw coming, tech giant, Microsoft announced plans to acquire ZeniMax Media Inc. on Monday. ZeniMax is the owner of the renowned video-game publisher Bethesda Softworks. The deal calls for purchasing the developer for $7.5 billion in cash, making it the biggest video game purchase to date. Bethesda is a publisher to successful triple-A (AAA) title games such as The Elder Scrolls, DOOM and Fallout.

What We Know:

  • Based in Rockville, Maryland, ZeniMax Media Inc. owns several studios around the world. Microsoft’s acquisition will expand the company’s gaming business with an injection of more titles and game developers. ZeniMax was previously one of the largest privately-held game companies with 2,300 employees around the globe.
  • The latest installment of their Elder Scrolls series landed them more than 20 million copies sold, spotting it as one of the top-selling games of all time. Microsoft Chief Executive Officer Satya Nadella stated in an interview, “with the acquisition of Bethesda, we metaphorically and literally double our gaming content capacity.”
  • This deal comes as Microsoft is ready to launch the next-generation Xbox consoles in November, at the same time as their longtime rivals Sony’s PlayStation 5 (PS5). The main lineup of games this year, including the company’s flagship series Halo, ended up falling flat to many players and fans. Inducting Bethesda’s library into Xbox’s subscription service “Game Pass” will surely boost consumer morale.
  • Although this move has surprised many in the industry as of late, Microsoft has already been gathering game creators and content for a while now. They spent nearly $2.5 billion to purchase Minecraft in 2014 and have acquired six-game studios within the past two years. The company stated that the deal is expected to close by the second half of its fiscal year 2021 while having “minimal impact on its adjusted operating income” for the following fiscal years.

  • According to analyst George Jijiashvili at researcher Omdia, Sony’s launch lineup for the PlayStation 5 is stronger than Microsoft’s. The PS5 is expected to outsell Xbox despite Microsoft releasing 2 versions of the devices (Series X and Series S).
  • Xbox and Bethesda have a long history, which started around the time the publisher released its first-ever console game on the original Xbox in 2002, Elder Scrolls III: Morrowind. This sort of deal speaks volumes when observing the advantage Xbox has over others trying to join the gaming market.
  • Founded by Christopher Weaver in the mid-80s, Bethesda became the pioneer in the market for personal computer (PC) games, as well as the hit developer for many games to follow. The company started with simple sport simulation games before moving on to other projects, including the ever-popular role-playing game (RPG) The Elder Scrolls, which released in the mid-90s.

On the other hand, ZeniMax Media Inc. was founded in 1999 but has slowly grown to be very successful in the next two decades after. Many of its own acquisitions included the Fallout franchise, Id Software, the maker of DOOM and Quake series. Although this purchase means big changes, Microsoft has stated that this merger will not affect Bethesda’s structure and leadership.

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