Microsoft to Acquire ZeniMax Media and Its Game Publisher Bethesda Softworks for $7.5 billion

[steven36]

Iconic games portfolio, publishing expertise, and world-class talent accelerates growth in Microsoft’s Gaming business

 

 

 

REDMOND, Wash. September 21, 2020 – More than three billion people on the planet play games for fun, escape, and human connection. Unlike any other medium, games empower people to engage in creativity, strategic thinking and teamwork, immersing them into interactive stories and worlds created by some of the world’s most amazing creators. The cultural phenomenon of gaming has made it the largest and fastest-growing form of entertainment in the world—an industry that is expected to be more than $200 billion in annual revenue in 2021.

 

As the gaming industry transforms from a device-centric era to a player-centric era powered by new technology that provides the freedom to play with friends anywhere on any device, Microsoft (Nasdaq: MSFT) on Monday announced plans to acquire ZeniMax Media, the parent company of Bethesda Softworks, one of the largest, privately held game developers and publishers in the world. Creators of critically acclaimed and best-selling gaming franchises including The Elder Scrolls and Fallout among many others, Bethesda brings an impressive portfolio of games, technology, talent, as well as a track record of blockbuster commercial success, to Xbox. Under the terms of the agreement, Microsoft will acquire ZeniMax Media for $7.5 billion in cash.

 

With unique investments in content, community, and the cloud, Microsoft’s gaming strategy differs from others by empowering people to play the games they want, with the people they want, anywhere they want. Games are the primary growth engine in gaming, and games are fueling new cloud-gaming services like Xbox Game Pass, which has reached a new milestone of over 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. This includes Microsoft’s intent to bring Bethesda’s future games into Xbox Game Pass the same day they launch on Xbox or PC, like Starfield, the highly anticipated, new space epic currently in development by Bethesda Game Studios.

 

“Gaming is the most expansive category in the entertainment industry, as people everywhere turn to gaming to connect, socialize and play with their friends,” said Satya Nadella, CEO, Microsoft. “Quality differentiated content is the engine behind the growth and value of Xbox Game Pass—from Minecraft to Flight Simulator. 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.”

 

“This is an awesome time to be an Xbox fan. In the last 10 days alone, we’ve released details on our two new consoles which go on pre-order tomorrow, launched cloud gaming in Xbox Game Pass Ultimate, and now we’re making another investment in the most critical part of our strategy: the games,” said Phil Spencer, executive vice president, Gaming at Microsoft. “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.”

 

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.

 

“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.”

 

The transaction is subject to customary closing conditions and completion of regulatory review. Microsoft expects the acquisition to close in the second half of fiscal year 2021 and to have minimal impact to non-GAAP operating income in fiscal years 2021 and 2022. Non-GAAP excludes the expected impact of purchase accounting adjustments, as well as integration and transaction-related expenses.

 

For more information, please visit the blog post from Phil Spencer, EVP Gaming at Microsoft. Find related imagery here. For broadcast quality b-roll, please contact [email protected].

 

About Microsoft

Microsoft (Nasdaq “MSFT” @microsoft) enables digital transformation for the era of an intelligent cloud and an intelligent edge. Its mission is to empower every person and every organization on the planet to achieve more.

 

About ZeniMax Media Inc.

ZeniMax Media is a privately-owned media organization headquartered outside Washington DC with international publishing offices around the globe. Through its subsidiaries, ZeniMax Media creates and publishes original interactive entertainment content for consoles, PCs, and handheld/wireless devices. ZeniMax Media divisions include Bethesda Softworks, Bethesda Game Studios, id Software, Arkane Studios, Tango Gameworks, MachineGames, ZeniMax Online Studios, Alpha Dog Games, Roundhouse Studios, ZeniMax Europe Ltd., ZeniMax Asia K.K., ZeniMax Asia Pacific Limited, and ZeniMax Australia Pty Ltd. For more information on ZeniMax Media, visit www.zenimax.com.

 

Bethesda Fast Facts and Accolades

 

5 of 8 studios have shipped “Game of the Year” titles

#1 Ranked Publisher of the Year (2018)

“Game of the Year” winner 5 years in a row

The Elder Scrolls III: Morrowind

RPG of the Year from IGN and others

The Elder Scrolls IV: Oblivion

Consensus Game of the Year across all outlets

Fallout 3

Consensus Game of the Year across all outlets

The Elder Scrolls V: Skyrim

Consensus Game of the Year

Named Game of the Generation and #1 PC Game of All Time

Fallout 4

Over 50 Game of the Year Awards including DICE and BAFTA

Dishonored

BAFTA Award for Best Game, Best Action Adventure Game at the VGAs

Dishonored 2

PC Gamer Game of the Year, Best Action Adventure Game at the VGAs

Winner of more than 100 Best of 2016 awards

Wolfenstein: The New Colossus

Best Action Game, The Game Awards

DOOM (2016)

Best Action Game, The Game Awards

Fallout Shelter

Mobile Game of the Year, DICE Awards and Golden Joystick Awards

Elder Scrolls Online

MMO of the Year four consecutive years

 

Source

[Sylence]

Great news, those are amazing studios with more amazing and memorable games. they will probably all be available on Game pass (some of them already are) and Elder Scrolls 6 (upcoming)

[Karlston]

Why Microsoft bought Bethesda for $7.5 billion

Hint: it’s not about having more Xbox exclusives 

Illustration by Alex Castro / The Verge

Microsoft’s priciest video game acquisition, a $7.5 billion purchase of Bethesda Softworks parent company ZeniMax Media, shocked the industry on Monday. The deal puts Bethesda, one of the industry’s biggest publishers and owners of some of the most successful gaming series, under the Xbox brand. It also raises a simple but powerful question: how does buying Bethesda fit into Microsoft’s overall Xbox strategy?

 

The immediate and inevitable reaction from consumers focused, naturally, on competition, and whether future Bethesda titles will become Xbox exclusives. It’s a sensible concern — why, after all, would any company in an industry as cutthroat as gaming purchase a major entertainment brand if not to deprive its primary rival the ability to distribute coveted intellectual property on competing hardware? But that’s a question for the old Microsoft, the one that tried competing with Sony in an exclusivity game that ultimately kept it perpetually lagging behind throughout the Xbox One generation. (Xbox chief Phil Spencer tells Bloomberg the immediate plan is to evaluate multiplatform releases on a “case-by-case basis.”)

 

Every major publishing decision Microsoft has taken in the last three years, since the launch of its Xbox Game Pass subscription service, indicates it no longer sees much value in exclusivity — or even in selling full-price games, for that matter. One of the biggest franchises in gaming, Halo, isn’t even exclusive to the Xbox platform anymore. Thanks to xCloud, you can play Halo on an Android phone if you like. The next major release in the series, Halo: Infinite, will be free on Game Pass for console and PC when it launches next year.

 

Microsoft is no longer playing the same game as Sony, and the Bethesda purchase may well make that point clearer than ever before. Sony has followed a tried-and-true strategy of acquiring promising developers and nurturing them over many years to produce large sequel-friendly franchises like Spider-Man and Horizon Zero Dawn. It also maintains strong relationships with independent Japanese partners, like From Software and Square Enix, to help maintain its edge so that the new Final Fantasy game or a Demon’s Souls remake comes to PlayStation first.

 

Instead, the question we should be asking about Microsoft is what Bethesda brings to Xbox Game Pass, and how owning that library helps Microsoft achieve its vision for its subscription service going forward. What’s immediately clear is the Bethesda acquisition makes Game Pass an even better deal, which is, without question, Microsoft’s most pivotal priority headed into the next console generation this November.

Image: Microsoft

Spencer made sure to make mention of Game Pass in the company’s announcement post this morning. “Just as they took the bold first steps to bring The Elder Scrolls franchise to the original Xbox, Bethesda were early supporters of Xbox Game Pass, bringing their games to new audiences across devices and have been actively investing in new gaming technology like cloud streaming of games,” Spencer wrote. “We will be adding Bethesda’s iconic franchises to Xbox Game Pass for console and PC.”

 

Bethesda Game Studios director Todd Howard echoed similar sentiments, saying that it’s Microsoft’s vision that convinced the company to agree to join the Xbox platform. “Why does it matter where the screen is or what the controller is? There are many people without the same access, and we can bring it to them,” he wrote in a post on Bethesda Game Studios’ website. “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.”

 

Although it’s a common refrain to assert that Microsoft lacks console exclusives, the company now has quite an impressive first-party suite. It owns Minecraft, the best-selling game of all time, which is available on pretty much every conceivable platform. It owns the rights to series like Halo, Gears of War, and Forza. Since 2018, it’s also gone on a buying spree, picking up beloved RPG maker Obsidian, indie darling Double Fine, and the versatile British studio Ninja Theory. Now, with Bethesda, Microsoft also owns the makers of Doom and Wolfenstein, Dishonored, and Deathloop (a timed PS5 exclusive, coincidentally), and Fallout and The Elder Scrolls.

 

Microsoft may not necessarily care about exclusivity anymore, but it still needs studios. First-party developers are the lifeblood of game publishers because they allow them to control the cadence of major releases and better manage budgets and cross-franchise resources like game engines and creative talent. Most important to Microsoft right now, however, is having the final say on distribution. By owning a studio, Microsoft gets to decide where and for how much the game is sold, including giving it away for free as part of a subscription service.

 

Keeping the next Fallout or Elder Scrolls game off the PS5 is not a savvy business move. Microsoft does not care where you play their games, for the most part. Rather, ensuring that a major new release is available for free on Game Pass the day it comes out, with no extra cost to Microsoft for having to secure a pricey revenue-sharing deal or pony up for limited time access, is the smarter play — one that owning the studio allows it to do. This is, in fact, Microsoft’s core strategy for the future of Xbox. Look at the release of Obsidian’s The Outer Worlds as an example. The game came out on Xbox One, PS4, and PC, and it’s available for free on Windows and Xbox if you’re a Game Pass subscriber. Everyone wins.

 

As of today’s announcement, Microsoft says it has 15 million Game Pass subscribers. At an average of $10 per user, accounting for some $5 and $1 limited time signups and subscribers of the $15 premium Ultimate subscription, that’s more than $1 billion in annual subscription revenue. Add to that any revenue Microsoft plans to make off third-party games on Xbox consoles and through the Microsoft Store on PC, any console revenue it might earn from the Series X / Series S sales, and full game sales and microtransactions for its first-party titles, and you’ve got a healthy Xbox business.

 

But far and away the most important part of that equation — the part that can continue to grow enormously — is Game Pass. Microsoft could double its Game Pass revenues with 20 million subscribers. At 50 million, Game Pass is generating $6 billion a year, more than three times what Fortnite made last year and close to the entire annual revenue of Activision Blizzard, the most valuable third-party game publisher in the industry. The Xbox business could make only a fraction of Sony’s PlayStation 5 hardware sales and still be generating mind-blowing amounts of cash, purely off subscription revenue.

 

That’s not to say Microsoft doesn’t care how many Xbox units it sells or whether its first-party games make back their budgets. It’s very likely Microsoft is approaching this uncertain next-gen future with contingencies in place, like using its vast pool of resources — the company has a market cap of $1.5 trillion — to keep Game Pass afloat until it starts making a healthy profit, while taking every measure to ensure it sells as many units of hardware and Halo it can.

 

That’s why there’s a cheaper Xbox Series S, after all. The more Xbox devices in living rooms, the more potential Game Pass subscribers Microsoft can sign up. It’s likely no coincidence this news was announced on the eve of next-gen Xbox preorders going live; a huge acquisition deal is an encouraging sign for the company’s commitment to Xbox and Game Pass that may translate into more hardware preorders.

 

But what’s important is that Microsoft isn’t all-in on just one path. Putting a new Bethesda game on Game Pass doesn’t mean a consumer can’t buy a disc copy at Best Buy or presumably purchase it on the PlayStation Store well into the future. Microsoft has its bases covered, and it’s investing in xCloud in the event new business models crop up in the future.

 

If all goes according to Microsoft’s plan, consumers won’t be talking so much about which company has the better exclusive lineup or which brand “won” the next-gen race. Instead, chances are you may own both consoles and maybe even a PC. Microsoft may not really care — so long as you keep giving it $10 a month for Game Pass.

 

 

Why Microsoft bought Bethesda for $7.5 billion

 

[BimBamSmash]

So, they found other venues to spend the cash they were going to pay for Tick Tock. And what a pick! Never thought I'd see Bethesda getting sold. (But then, I thought the same about Blizzard all the same back in the days.)

 

Next gen console wars is upon us, boys. The battle rages on, once more!

 

Who's up for sale next? Take Two?

 

Sony, whatcha got cooking?

[Akaneharuka]

That mean those game don`t have chance to  come to PS5 ?

[steven36]

2 hours ago, Akaneharuka said:

That mean those game don`t have chance to  come to PS5 ?

No  it dont mean that  M$  main goal  is to make  a profit  there partners in  Cloud  gaming  they are going up against Google  and Amazon.

https://news.microsoft.com/2019/05/16/sony-and-microsoft-to-explore-strategic-partnership/

 

Microsoft & Sony Partnership Puts PlayStation, Xbox Fanboys to Shame

 

Quote

Last year, Microsoft and Sony announced a partnership that would push cloud gaming forward. Too bad fanboys can’t take a hint.

 

 

Thanks to Microsoft, Sony’s streaming service has improved tenfold. | Source: PlayStation

 

It’s mostly thanks to Microsoft’s cloud offerings that Sony’s PS Now subscriptions have more than doubled. Now, the partnership will focus on artificial intelligence and semiconductors. They’re also working on network congestion.

 

Sony’s Executive Vice President, Toru Katsumoto, spoke on the matter in a sales call:

“Gamers usually play games during night and there will be congestion of the servers [during this time], but in the day time not so much,” he explained. “How can we utilise the servers more efficiently and effectively? That’s a technical point and we are discussing [this] with Microsoft.”

 

Despite this, every Xbox Series X and PlayStation 5 reveal sees gamers on either side going at each other.

Negative Energy Is Wasted Energy

The new Xbox gameplay reveal brought out the PlayStation 5 fanboys in droves. Many kept trolling the announcements, stating they’ll just wait for the PS5 version. This is especially strange, considering many of those games were Xbox Game Studios titles.

 

Sorry fanboys, but they’re not coming to PlayStation anytime soon.

 

Even the Sony and Xbox heads are publicly kind to one another. Why can’t players take them as an example?

 

At least point all that energy toward something positive. Positivity always leads to a better gaming experience.

 

https://www.ccn.com/microsoft-sony-partnership-puts-playstation-xbox-fanboys-shame/

[steven36]

If Microsoft messes  the company up  and makes the gaming community mad  they have $7.5 Billion at  stake  it would be  a bigger  mess up than  Windows  phones . It  just depends on if they  play there cards right. if those 5,000 developers  up from 15 developers dont lose there jobs . Were talking  about the same Microsoft who  has  had layoff  after layoff  every since they got there current CEO.

 

They lost  the last console  wars by a long shot  there best bet is to embrace  Sony  and not get to greedy most  of  M$  acquisitions has  been in the last 2 years  they not  even had them long enough to see  will it pay off in the long term . M$  tired something like this before in 2000  to mess up Sony when they was going buy  EA  and the deal fell trough and never happen so in the long term  they still lost . But there not the same now they  believe  in cross platform today  they didn't  back then.

 

@SahVulon said:

is this true?

https://www.cnet.com/videos/xbox-just-bought-bethesda-for-7-5b-full-breakdown-of-what-it-means/

 Been seeing it a lot.  No one is happy... except for the Zenimax fat cats that got paid.  I'm fairly certain this does not bode well for TESVI or any future Fallout games.  Big corporations crush creativity...  Total Bummer IMHO.

 

https://bethesda.net/community/post/2982312

 

Some of  M$  visions have  paid  off  but they center  around business  if they drop the ball  with XBOX  they will be all but done with the consumer  market   it like the only thing they  have left .  PC games are no longer  being  cracked  if you want buy  them you can .  Even before  the scene got raided  all games were not being cracked  . They could not crack Rockstars  protection so my friend bought the game.

 

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Jacob Navok, CEO of Genvid Technologies, said in a series of tweets that he thought the deal could be bad for the industry’s stable of strong independent third-party publishing companies, as it signals the wrapping of the games that the third parties produce into aggregated game subscriptions.

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Kim Pallister, a gaming and VR expert at Intel, said in a tweet that Apple and Google have focused on game subscription services but have underestimated the value of owning triple-A intellectual property, which is the key to mainstream popularity.

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“Overall the acquisition is further signs that while Xbox hardware can not compete with the PlayStation brand in the short term, Microsoft is better equipped to focus on a long-term vision,” DFC said.