What Xbox’s Acquisition of Bethesda Means Both Now and in the Future

What a day for the gaming industry. As the dust has settled on one of the largest announcements of all-time, there’s been a flurry of news, excitement, and fear. With this in mind, I wanted to provide some context on the agreement along with what you can expect in the future. Let’s get to it.

Details of the Acquisition

First, Microsoft has acquired ZeniMax Media for $7.5 billion. ZeniMax Media is the parent company of Bethesda Softworks who function as an umbrella for eight game development studios that house over 2,300 employees. Those eight studios are the following:

• Bethesda Game Studios
• id Software
• ZeniMax Online Studios
• Arkane
• MachineGames
• Tango Gameworks
• Alpha Dog
• Roundhouse Studios

Along with the studios of course is the other half of the all-important equation, intellectual property rights. With this deal, the following IPs now fall under the ownership of Microsoft and thus Xbox Game Studios:

• The Elder Scrolls
• The Elder Scrolls Online
• Starfield
• Wolfenstein
• Doom
• Quake
• Prey
• Rage
• Deathloop
• Ghostwire : Tokyo
• The Evil Within
• Unannounced IPs currently in-development

If you haven’t yet, I would encourage you to read the official statements on the deal from Head of Xbox Phil Spencer and Studio Head of Bethesda Game Studios Todd Howard.

As with all deals of this nature, there are some nuances to understand. These are important. Otherwise, you’ll end up down a rabbit hole of threads on Twitter filled with people speculating about utter nonsense.

First, Phil Spencer has confirmed that any existing agreements will be honored. Thus the timed exclusivity for Deathloop and Ghostwire : Tokyo on the PlayStation 5 will still occur. As to how long those deals are for still hasn’t been disclosed.

Second, no this does not automatically mean that all Bethesda titles are now exclusive to Xbox in the console space. As we’ve seen with Xbox’s other acquisitions, this will be something that is evaluated with each individual title as they are developed. Spencer confirmed this by saying “future Bethesda titles would release on Xbox, PC, and other consoles on a case by case basis.” What you can likely expect is for major titles such as Starfield to land on all major platforms while other titles may end up exclusive to the Xbox ecosystem in some form. This aspect will be the most interesting to watch in the future in my opinion.

Lastly, and in my opinion the most important aspect of this acquisition, is that all future Bethesda games (post existing agreements like above) will launch on Game Pass on day one. Yes that means that when Elder Scrolls 6 eventually launches, it will be in Game Pass. It was also disclosed in the announcement this morning that Game Pass has surpassed 15 million subscribers which indicates growth of around 50% in just the last six months alone. It’s incredibly impressive and will be important to keep in mind for the rest of the article.

Game Pass is the Strategic Pillar

If it’s not exceedingly clear to you by now it should be; Game Pass is the cornerstone of Xbox’s future. No, this doesn’t mean that Xbox is exiting the hardware business. No, this doesn’t devalue games. No, this doesn’t mean that AAA studios now have to change their development focus. I already warned you to stay away from rabbit hole threads on Twitter didn’t I?

In the short-term what this represents is the biggest, single investment yet in broadening the offering of the Xbox ecosystem. I’ve written extensively about Xbox’s focus for the industry and how when they say “they are putting the player at the center” they truly mean it. So in the very near future, you will begin to see existing Bethesda titles added to Xbox Game Pass thus increasing its immediate value to subscribers.

But the real value of course comes when future Bethesda titles launch in the service on the day of their official release. Thus, even when Elder Scrolls 6 eventually launches on Xbox, PlayStation, and PC simultaneously, you’ll have a choice. You can play the game on Game Pass via Xbox Series consoles or PC via the Xbox store. Or you can pay $70 (or more depending on the region) to play the game on the PS5 or Steam. Also, even though the game may not be exclusive to a specific platform, it wouldn’t surprise me to see some exclusive content for Xbox players as well. This could naturally include cross-over content given the scope of Xbox Game Studios now. Regardless, no matter how you choose to play the game, at the end of the day Xbox will be increasing their revenue stream.

Remember as well, Xbox Game Pass Ultimate isn’t just accessing games on your console or PC. As of last week, Cloud Streaming (formally xCloud) is now offered to clients via their Android devices (I promise I’ll save my frustrations with Apple for another time). So do the simple math and yes, there’s a very near future where all joking aside, you’ll be able to play Skyrim anytime and anywhere along with all other Bethesda titles as they are added to the catalog.

If you happen to want to understand more about the success of Game Pass and some of the data behind it, including thoughts from developers, please find my Industry Perspective video on the service. While I published it last year, all the same points are relevant.

A Foundation for Development

Now all of the immediate and short-term impacts of this deal are greatly important. But I believe the longer term implications of the acquisition are far more interesting.

From an intellectual property perspective for example, the wealth of IPs that now fall under a single brand is simply extraordinary. The possibilities for cross-overs and collaborative efforts across game worlds is unlike anything we’ve ever seen in the industry. Now I’m not saying we’re going to see Doom Slayer with Kazooie jumping out of his back any time soon, but the mere fact that it’s possible is amusing to me. Of course, more realistically we’ll see additions like the Doom Slayer armor in Halo Infinite as a customization option which can simply be fun for fans. And if I can add a small vote here, I’d love to see Halo, Doom, and Quake come together in some form to create the ultimate cross-over shooter, or a more-mature Smash Brothers type battle game. Rip and tear!

Thinking more broadly about the development teams, it’s staggering to think of the talent Xbox now has under one theoretical roof and the opportunities it presents. As many have already rightly pointed out as a prime example, Obsidian previously developed the beloved Fallout New Vegas. And so the possibilities for new and expanded development talent to work on legendary properties is immense, and you can bet some of those conversations are already beginning to taking place. Meanwhile, IPs such as Prey, The Evil Within, or even Dishonored that may have had an uncertain future now have the potential to be expanded upon by new, and still growing, talent as part of Xbox Game Studios.

While it will take time, there’s also a tremendous opportunity for the teams to share development resources across titles as well. From technological advancements, engine optimizations (or even full engines such as id Tech), world-building, game direction, and more, having a broad set of talent under a single publishing arm can work wonders for game quality. Look no further than PlayStation first party which over the course of the PS4 generation saw this first hand as their teams collaborated on the brand’s top titles. We’ve previously heard from Head of Xbox Studios Matt Booty on this exact focus in the past:

So, what are some things we can do that are valuable? I think that getting the studios connected with each other so that they can trade information and trade ideas — “Hey, that character animation that you’re using looks amazing. Tell me what you did; how do I learn more?” And that means making sure that they feel empowered to connect with each other, that we make it easy to connect, and in some places, we actually create events. So we have these things called summits that we do. We’ll do a character summit, a writing summit, a technology and graphics summit where we try to bring people from the studios together. We’re always on the lookout for places where we can get them connected with each other, but also, there’s a pretty high bar for when we want to do that.

The phrase that I’ve used that is a phrase that’s been within Microsoft, is that we need to be very tightly aligned on why we’re building games and what our vision is for where these games go, but we need to be loosely coupled as teams. Because I want to make sure that we retain some of that individuality.

Shared development knowledge across the studios is vastly important and in-time, once these teams begin to collaborate fully, the end result should be some of the most impressive game worlds we’ve ever seen. If you’re someone like me who lives and breathes this hobby, it’s an incredibly exciting prospect. And fortunately, as Booty stated above, Xbox leadership has handled the acquisitions in the “right” way by providing resources and support while allowing the studios to continue to develop freely with their own identity.

Endless Possibilities

When you take a step back and look at big picture of Xbox Game Studios now, you see a few things. You see a company that has answered all questions about whether they are dedicated to gaming. You see an astonishing collection of studios and development talent that is unmatched in the industry today. And you see endless potential in the future for not only some of the largest properties in gaming, but for brand new properties as well.

But more importantly to me, you see a brand that is truly expanding our gaming options. Whether you want to go to the store to buy a disc to put into your Xbox Series X or you want to play Sea of Thieves on your phone, the Xbox ecosystem supports it. And with the ZeniMax Media acquisition, that ecosystem just became a lot more enticing to potential customers. Did I mention that tomorrow the Xbox Series S and X go up for pre-order? And that you can purchase them through All Access thus providing you with a two year subscription of Xbox Game Pass Ultimate? In business, there are very few coincidences.