Games like The Elder Scrolls, Doom, Quake, Wolfenstein and Fallout now belongs to Microsoft after $7.5-bn acquisition of ZeniMax

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

Microsoft announced the $7.5 billion (in cash) acquisition of ZeniMax Media, the parent company of gaming studios like Bethesda. With the acquisition Microsoft narrowed the gap that had built over the years with Sony and gained control of major gaming titles like The Elder Scrolls, Fallout, Doom, Quake and Wolfenstein.

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.

“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.”

Gamers have long complained that Microsoft’s Xbox consoles lacked the type of exclusive, high-quality games that Sony promotes as a major selling point for its PlayStation consoles. For years, Sony owned more games studios than Microsoft. But last year, Microsoft passed Sony, owning 15 studios to Sony’s 14. The deal announced on Monday increased Microsoft’s lead to 23 game studios, and gives it control over some of the world’s most popular franchises.

Sony declined to comment on Microsoft’s purchase.

Microsoft did not say how many of its newly acquired games would be exclusive to the Xbox, but pointed to the remarks of Phil Spencer, the company’s executive vice president of gaming, who said in an interview with Bloomberg that games would be available to other consoles on a “case-by-case basis.”

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.

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