Microsoft to buy game company ZeniMax Media for $7.5 billion
Microsoft is massively expanding Xbox’s original games portfolio: The software giant announced plans to acquire ZeniMax Media, the parent company of Bethesda Softworks - one of the biggest privately held game developers and publishers in the world - for $7.5 billion in cash.
The deal will give Microsoft’s Xbox games division ownership of top-selling games including “Fallout,” “The Elder Scrolls,” “Doom,” “Quake,” “Wolfenstein,” “Prey” and “Dishonored.” Microsoft plans to add Bethesda’s franchises to its Xbox Game Pass cloud-based service, which has over 15 million subscribers, including future titles like the buzzy space RPG “Starfield.”
With the addition of Bethesda, Microsoft will expand from 15 to 23 creative studio teams. The deal is Microsoft’s biggest ever in the games sector; in 2014, Microsoft acquired “Minecraft” maker Mojang in a $2.5 billion deal.
Phil Spencer, EVP of gaming at Microsoft, said in announcing the proposed deal, “Generations of gamers have been captivated by the renowned franchises in the Bethesda portfolio and will continue to be so for years to come as part of Xbox.”
News of the ZeniMax and Bethesda comes ahead of Microsoft’s release of its next-generation Xbox consoles this fall.
What does Bethesda coming under Xbox’s wing mean for the game company’s titles on other platforms, like PlayStation? Bethesda had announced that two games, “Deathloop” and “GhostWire: Tokyo” would be coming exclusively to the PlayStation 5, which also ships in November. Those will remain PS5 exclusives, but for future games Microsoft will evaluate distribution to non-Xbox consoles on a “case-by-case basis,” Spencer said in a Bloomberg interview.
Microsoft’s planned acquisition of ZeniMax includes publishing offices and development studios worldwide 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.
“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,” Bethesda VP of marketing Pete Hines wrote in a blog post. The Microsoft 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.”
Bethesda parent ZeniMax Media was founded in 1999 by chairman and CEO Robert A. Altman. Bethesda’s structure and leadership will remain in place upon completion of the Microsoft takeover, expected to close in the first half of 2021.
Coming after Microsoft lost out on its bid for TikTok, the ZeniMax-Bethesda acquisition shows that CEO Satya Nadella remains “laser-focused on growing the consumer side of the house,” Wedbush Securities analyst Dan Ives wrote in a note. The deal is “a smart and strategic move in our opinion heading into its highly anticipated new console release.