Microsoft has "reluctantly" bought Bethesda

In recent revelations from Phil Spencer, Microsoft’s Xbox head, a significant driver behind the Bethesda parent company, ZeniMax's acquisition was the looming threat of Starfield PlayStation exclusivity. During the FTC v. Microsoft hearing, Spencer highlighted Sony’s frequent business strategy of paying competitors to bypass their platform, making the Bethesda acquisition necessary for Microsoft to stay competitive.

Spencer noted that Sony had previously brokered deals for exclusivity with Bethesda for Deathloop and Ghostwire, effectively keeping these games off the Xbox. The possibility of Starfield, another potential blockbuster, bypassing Xbox was unacceptable. Given their position as the third in line console, Microsoft had to avoid further content losses. To remain viable in the gaming industry, they needed to secure exclusive content, leading to the acquisition of ZeniMax.

This drive for competitiveness came at a hefty cost; Microsoft spent $7.5 billion to acquire ZeniMax Media, the parent company of the renowned studios behind Elder Scrolls and Fallout. On finalizing the deal, Microsoft guaranteed Xbox and PC exclusives. To date, they've delivered Redfall, and Starfield is expected to debut on September 6th. The forthcoming Indiana Jones game from Bethesda will also be exclusive to Xbox and PC.

Microsoft has "reluctantly" bought Bethesda

Spencer refrained from confirming whether Elder Scrolls VI would be exclusive to Xbox during his testimony. He expressed that due to the game's distant launch, it was challenging to pin down its platform exclusivity. Although he has hinted at Xbox exclusivity for Elder Scrolls VI, the game remains years from release.

Spencer’s narrative painted Sony as a fierce competitor, even to the point of hostility. He pointed out Sony's business model where they take a 30% cut from any game Microsoft ships on PlayStation. This revenue, alongside Sony’s other income streams, is used to destabilize Xbox’s market standing. Despite their best efforts to compete, Spencer admitted their inability to do so effectively over the past two decades.

Spencer argues that the acquisition of Bethesda and the attempted purchase of Activision Blizzard is a means for Microsoft to level the playing field with Sony. To remain competitive in the industry, Microsoft has had to dig deep into its pockets. The proposed deal for Activision Blizzard alone is pegged at a whopping $68.7 billion.

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