Microsoft Signs an All-cash $7.5 Billion Deal to Expand Games Cloud Globally

The makers of Elder Scrolls, Bethesda has been officially sold off for 7.5 billion US dollars. Microsoft is going after gaming market in the coming months. In its latest acquisition deal, the world’s leading Cloud and IT services company expressed its desire to acquire ZeniMax Media. For the uninitiated, ZeniMax is the parent company of Bethesda Softworks, one of the largest, privately-held game developers and publishers in the world. The move is likely to push Microsoft’s gaming solutions to new heights, even as e-gaming and video gaming industry seems to be one of the fastest-growing digital markets in the world, a market that is worth more than $200 billion in annual revenue.

Under the terms of the agreement, Microsoft will acquire ZeniMax Media for $7.5 billion in cash.

ZeniMax deal announcement to acquire Bethesda comes within hours of the launch of the Xbox App (beta) for mobile.

Microsoft’s intent to bring Bethesda’s future games into Xbox Game Pass

Simply put, the Microsoft-ZeniMax deal will enable Microsoft to 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.

At the time of this announcement, Satya Nadella, CEO, Microsoft said, “Gaming is the most expansive category in the entertainment industry, as people everywhere turn to gaming to connect, socialize and play with their friends.”

Satya added, “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.”

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.

We spoke to Jonathan Harrop, Sr Director of Global Marketing & Communications- AdColony.

Jon said, “Microsoft has continued to make a strategic investment in studios to bolster its place in the gaming space relative to other console and PC platforms. While Xbox might be a big brand name on its own, Microsoft looks bigger and broader than that. 365 products and cloud infrastructure might be their main lines of business, but gaming forms a core part of Microsoft’s identity in a way that goes beyond Xbox alone. For a company as invested in core consumer products as Microsoft,  acquiring a “hardcore” publisher like ZeniMax (the parent company of Bethesda) is yet another indicator that gaming isn’t niche — it’s a central part of consumers’ identities in 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.

As the gaming industry transforms from a device-centric era to a player-centric era powered by new technology, Microsoft looks at omnichannel gaming market as a platform that offers the freedom to play with friends anywhere on any device.

What Bethesda Does?

Bethesda is the creator of critically acclaimed and best-selling gaming franchises including The Elder Scrolls and Fallout among many others. The gaming platform brings an impressive portfolio of games, technology, talent, as well as a track record of blockbuster commercial success, to Xbox.

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.

Phil Spencer, EVP of Gaming at Microsoft said – “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.

“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.”

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.

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;

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: Xbox / Microsoft Press