On Monday, local time in the United States, Microsoft spent $7.5 billion to acquire ZeniMax Media, the parent company of Bethesda Softworks, a well-known game development studio. This is Microsoft’s most expensive game acquisition so far, shocking the entire industry. The deal places Bethesda under the Xbox brand.
Currently, Bethesda is one of the largest game developers and publishers in the industry, and has developed games such as Fallout or The Elder Scrolls. This can’t help but raise a simple and important question: Does the acquisition of Bethesda fit Microsoft’s overall Xbox strategy?
Consumers’ direct response naturally focused on competition and whether the future Bethesda game will become an exclusive product on Xbox. This is a reasonable concern. After all, in a cruelly competitive industry like gaming, if you don’t ask for exclusives, why should you buy a large entertainment interactive brand like ZeniMax? But this is a problem that Microsoft needs to face. The company tried to compete with Sony for an exclusive game, but it eventually led to it being behind in the entire Xbox One iteration.
Since the launch of the Xbox Game Pass subscription service, every major publishing decision Microsoft has made in the past three years has shown that it no longer considers exclusivity to have too much value, and “Halo” is no longer even Exclusive product on Xbox platform. Thanks to XCloud, players can play Halo on Android phones. The next major version of the series, “Halo: Infinite” (Halo: Infinite) will be available for free on Game Pass on consoles and PCs when it launches next year.
Microsoft will no longer adopt the same strategy as Sony. The company will focus on services and subscriptions. The acquisition of Bethesda is likely to show this more clearly than ever before. Sony has followed a tried-and-tested strategy of acquiring promising developers and cultivating them over many years to produce large series of games suitable for sequels, such as “Spider-Man” and “Zero Point” Horizon Zero Dawn. It also maintains strong relationships with independent Japanese partners, such as From Software and Square Enix, to help maintain its advantage so that the new Final Fantasy game or Demon Souls will first appear on the PlayStation.
Instead, the question we should ask Microsoft is, what does Bethesda bring to Xbox Game Pass? It is obvious that the acquisition of Bethesda makes Microsoft Game pass service stronger.
On Monday, Microsoft Games Executive Vice President Phil Spencer also mentioned Game Pass in a company announcement post. He wrote: “Just like they brought the “Elder Scrolls” series to the original Xbox back then, Bethesda is also an early supporter of Xbox Game Pass, bringing their games to new users of different devices and actively Invest in new game technologies such as game cloud streaming. We will add Bethesda’s iconic franchise to Xbox Game Pass for consoles and personal computers.”
Todd Howard, director of Bethesda Game Studios, also expressed a similar view. He said on the company’s website: “It is the vision described by Microsoft that persuaded us to agree to join the Xbox platform. Why is the screen or controller so important? Important? There are many people who don’t have the same access rights, and we can bring it to them. Like our initial cooperation, this cooperation is not only about a system or a screen. We all deeply believe in the essential power of games, Believe that they can connect, empower and bring joy. We should bring this belief to everyone, no matter who you are, where you live, or what you play. No matter the screen size, controller, or whether you have the ability It doesn’t matter if you use a controller.”
Currently, Microsoft has the best-selling game “Minecraft” ever, which can be used on almost all platforms. Microsoft owns the series copyrights of “Halo”, “Gears of War” and “The Force”.
Since 2018, Microsoft has also set off a wave of acquisitions, acquiring the popular RPG game developer Obsidian, the game studio Double Fine, and the video game production company Ninja Theory. Now, Microsoft also owns “Doom”, “Wolfenstein”, “Dishonored”, “Deathloop”, “Fallout” and “The Elder Scrolls” and other games. Developers.
Microsoft may no longer care about the exclusive operation of games, but it still needs game studios. First-party developers are the lifeblood of game publishers, as this allows them to control the release rhythm, better manage budgets and cross franchise resources, such as game engines and creative talent. However, for Microsoft, the most important thing at the moment is to have the final decision on the release. By owning a studio, Microsoft can decide where to sell the game at what price, including giving it away for free as part of a subscription service.
It is not a smart business move to keep the next version of Fallout or The Elder Scrolls games away from PS5, but it is a smart move to ensure that these games are on Game Pass. Microsoft has shown that to a large extent, it doesn’t necessarily care where you play their games. Instead, the goal is to ensure that important new versions of the game are available for free on Game Pass on the day they are released.
This is actually Microsoft’s core strategy for the future of Xbox. Take the release of Obsidian’s “Outside World” as an example: this game is released on Xbox One, PS4 and PC. If you are a Game Pass subscriber, it is free to play on Windows and Xbox. In this case, everyone is a winner. This may be a strategy that Microsoft wants to repeat.
In the announcement, Microsoft said it has 15 million Game Pass subscribers. On average, each user pays US$10 per month, including limited-time registered users of US$5 and US$1 and premium ultimate subscription users of US$15, which brings in more than US$1 billion in annual subscription revenue. Coupled with the third-party game revenue that Microsoft plans to earn on the Microsoft Store on Xbox consoles and PCs, this will promote the Xbox business to develop in a healthier direction.
But there is no doubt that the most important part of this, and the part that can continue to grow substantially, is Game Pass. Microsoft may double its Game Pass revenue and have 30 million subscribers. With 50 million subscribers, Game Pass’s annual revenue is estimated to be US$6 billion, which is more than three times the revenue of “Fortnite” last year, close to the annual revenue of Activision Blizzard, which has the highest market value in the industry Third-party game publishers. The Xbox business may only bring in a small part of hardware sales, but it can still generate shocking cash income, which depends entirely on subscription income.
This is not to say that Microsoft doesn’t care about Xbox sales, or that it doesn’t care whether first-party games have recovered their budget. Microsoft is likely to be prepared to respond to the uncertain future of the next generation of game consoles, such as using its huge resource pool (the company’s market value is $1.5 trillion) to maintain Game Pass operations until it starts to achieve health At the same time, all measures are taken to ensure the sale of as many hardware and games as possible.
This is why Microsoft will launch a more affordable gaming model Xbox Series S. After all, the more Xbox devices in the living room, the more potential Game Pass users Microsoft can register. The news of Microsoft’s acquisition of ZeniMax was announced on the eve of the next-generation Xbox pre-orders, which may not be a coincidence. For the company, a huge acquisition transaction may have a positive impact on the prospects of Xbox and Game Pass, which is likely to translate into more hardware reservations.
But the important thing is that Microsoft is not just looking at one path. Microsoft has covered all users and is investing in XCloud to prevent the emergence of new business models in the future.
If everything goes according to Microsoft’s plan, consumers will not talk too much about which company has a better exclusive game, or which brand will win the next-generation competition. Microsoft may not really care about this, as long as you continue to spend $10 a month to subscribe to its Game Pass.
For more such interesting article like this, app/softwares, games, Gadget Reviews, comparisons, troubleshooting guides, listicles, and tips & tricks related to Windows, Android, iOS, and macOS, follow us on Google News, Facebook, Instagram, Twitter, YouTube, and Pinterest.