Microsoft shocked the gaming world this week with the announcement it had acquired ZeniMax Media, parent company of Bethesda, in a $7.5 billion cash deal. The move adds eight more studios to Xbox’s first-party portfolio, including Bethesda Game Studios (The Elder Scrolls, Fallout, and the upcoming Starfield), id Software (Doom), Arkane (Prey, Dishonored), MachineGames (Wolfenstein), Tango Gameworks (The Evil Within), and more.
There is a lot to digest here, both about the immediate deal itself as well as the short- and long-term fallout (yes, pun intended). For now, though, in the immediate wake of the announcement, here are my five big takeaways, thoughts, and questions.
The Elder Scrolls 6 (Among Others) Might Be an Xbox Exclusive Now
We do know that the previously announced deals for timed PS5 exclusivity on Arkane’s Deathloop and Tango’s Tokyo Ghostwire will be honored, but beyond that, Microsoft will have a lot of options. Take The Elder Scrolls VI, the next game from Todd Howard and his team at Bethesda Game Studios following Starfield, which was revealed in 2018 and is expected in either late 2021 or sometime in 2022. While it’s technically been announced, nothing about it is known, let alone set in stone. Microsoft could opt to hold onto it forever as a console exclusive. Or it could make it a timed exclusive and release it on PS5 a year later. Or it could just make it multiplatform from the jump and offer the day-one Game Pass incentive for Xbox players. Odds are Microsoft will choose the most lucrative path – it’s got a $7.5 billion expenditure to recoup, after all – and there’s a case to be made either way. Microsoft could use The Elder Scrolls, already one of the biggest franchises in gaming, as a massive carrot to dangle at the end of the stick for players not yet in the Xbox ecosystem, particularly given that by the time Elder Scrolls 6 releases, it will have been more than a decade since Skyrim. Or it could just put it out on PS5, which is certain to have a very large installed base, and reap a publisher’s cut of every copy sold there. It’s going to be fascinating to see how it all unfolds.
Todd Howard Is Probably Contractually Locked-in
Executive Producer at Bethesda Game Studios Todd Howard was no doubt already making an excellent living at Bethesda, and deservedly so given his accomplishments. He’s also been an employee for 25 years. And while Bethesda was a private company up until now, it’s possible that Howard has equity in the company, given both his tenure and his stature. If so, he stands to make a lot of money out of this. Like, “F*** it, I’m going to go buy an island and live on the beach forever” kind of money. Odds are, this acquisition specifically locks Howard (and possibly some other senior creatives) in for a minimum number of years, with possible escalator payouts in place the longer they stick around as newly minted Microsoft employees. Simply put, Microsoft won’t want him to leave immediately. He is an immense part of BGS’s value to Microsoft. We seemingly saw something similar back when BioWare co-founders Ray Muzyka and Greg Zeschuk both left their studio exactly five years after EA acquired it. Hopefully, Howard still wants to continue making games, but I’d set a reminder in your calendar for five years from now to see if we see a similar retirement announcement from him.
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Did This Deal Come About After Warner Bros. Interactive Entertainment Came Off the Table?
It seems like just yesterday that Microsoft was in the mix to acquire Warner Bros. Interactive Entertainment and its handful of exceptionally talented studios, including Rocksteady, Monolith, and NetherRealm. Parent company AT&T seems to have pulled any possible deal off the table, and so it’s fair to wonder: did Microsoft move quickly on Bethesda in the aftermath? A trusted source tells me that, in fact, a Microsoft-Zenimax deal was almost locked two years ago, but fell apart. It’s obviously done now, though, and so the question flips: is it possible that Microsoft could’ve had both Bethesda and WB?
Xbox Is Now the Home for Western RPGs
Sure, PlayStation’s got Final Fantasy XVI, but if you like Western RPGs, Xbox is now the definitive home for those. Microsoft now owns the following studios and IPs: Bethesda Game Studios (The Elder Scrolls, Fallout, Starfield), Obsidian (Avowed, Pillars of Eternity, The Outer Worlds), inXile (Wasteland), and Playground (Fable). That’s just nuts – particularly when you factor in the fact that every single one of those expansive RPGs will be available on Day One as part of your Game Pass subscription.
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Any Argument Against Xbox Game Pass Is Null and Void
There simply is no argument against Xbox Game Pass left. While I’d see some folks online bemoaning the lack of AAA games as part of the service, that is now dead and buried. Regardless of whether or not Microsoft chooses to keep future Bethesda games off of PlayStation 5, the fact of the matter is that the following megafranchises will now see all future entries launch day and date into Game Pass: Elder Scrolls, Fallout, Starfield, Doom, Wolfenstein, Quake, etc. That’s on top of the Halos, Fables, Avoweds, etc. that are already on the way. If it wasn’t already, Game Pass is now a required $10 per month expense for all serious gamers, because the value in return for that $120 per year is through the roof.
No matter how you look at it, Microsoft acquiring one of the industry’s fellow major publishers and suite of developers is a seismic event – one whose ramifications could affect the industry for years to come. Just when we thought 2020 couldn’t possibly have any surprises left in store for us, this happens. Generation 9 is going to be a fun one.