Microsoft’s Xbox team significantly expanded its list of game development studios on Monday, announcing the purchase of ZeniMax Media for $7.5 billion in cash. The entertainment company owns several industry-leading game developers, including Bethesda Softworks, the maker of the post-apocalyptic Fallout games and the fantasy series The Elder Scrolls. It also owns Id Software, known for its Doom, Rage and Wolfenstein shooting game franchises.
The move grows the number of in-house Xbox game development studios to 23, up from 15 earlier, giving it control of some of the game industry’s most popular franchises. Microsoft also plans to run Bethesda as its own division, with leadership and structure intact.
“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,” Microsoft CEO Satya Nadella said in a statement.
The two companies pitched the deal as an expansion of an already close partnership that’s spanned decades. “The big winners today are our fans,” ZeniMax CEO Robert Altman said in a statement. “Our games can only get better.”
Microsoft’s move comes weeks before the November launch of its next big video game consoles, the and , both promising sharper visuals and faster gameplay than their predecessors. The new game consoles will be competing against Sony’s and , also coming out in November.
Microsoft’s ZeniMax acquisition also comes after its failed bid for a stake in TikTok, the China-based social network that’sand more than 100 million users in the US. The tech giant spent at least the past month in an effort to satisfy national security concerns raised by President Donald Trump, who’d threatened to ban the app from US app stores if it wasn’t bought by a US company.
For Microsoft, its biggest ever video game purchase isn’t just about bulking up its slate of game studios. By purchasing an established company with a string of hits going back decades, Microsoft is beyond focusing on the space war series Halo and racing game series Forza as its marquee titles. It also insulates Microsoft from fallout over having to delay highly anticipated launch title Halo Infinite from this holiday to 2021, leaving it without a key launch title to compete against Marvel’s Spider-Man: Miles Morales on the PS5.
“Content is just the incredible ingredient to our platform that we continue to invest in,” Spencer said, adding that Bethesda’s catalog of hit games will be added to Microsoft’s Xbox Games Pass service, which now boasts more than 15 million subscribers. ZeniMax, he said, “doubles the size of our creative organization.”