On September 21st, 2020, Microsoft announced that they will be purchasing ZeniMax Media for $7.5 billion in cash. ZeniMax is the entertainment company of industry-leading game development studios, including Bethesda Softworks, the creators of Fallout games, and The Elder Scrolls series. ID Software, who are known for Doom, Rage, and Wolfenstein, sits under that ZeniMax umbrella also.
A lot of people mentioned how this was a huge move against Sony, which when you really think about it, it is a move against two tech giants, Google and Amazon. Microsoft has been toe to toe with Google and Amazon for years as it relates to cloud tech and now with all three companies adding cloud gaming to their infrastructures, it is all about who can build the better ecosystem.
PlayStation and Xbox have been rivals for many years now, related to console sales, with Sony besting Microsoft this generation by a significant margin. However, that didn’t stop Microsoft from being more aggressive, but it was not necessarily against Sony.
“When you talk about Nintendo and Sony, we have a ton of respect for them, but we see Amazon and Google as the main competitors going forward,” Phil Spencer told Protocol. That is pretty evident as the marketing plan behind Xbox is pushing Xbox Gamepass, Microsoft Netflix-style gaming service. The war chest of Amazon and Google is just as huge as Microsoft and this is the fight Microsoft has to truly focus on.
On September 24th, 2020, Amazon announced its new channel based game streaming service, Luna. Luna takes a slightly different approach to what Google Stadia and Microsoft xCloud offer by making their service more reminiscent of cable TV. Microsoft recently released their game streaming service xCloud into Xbox Gamepass, and it says a lot about where Microsoft’s real fight lies.
The purchase of a studio as talented as Bethesda, alongside the other talented studios, is Microsoft ensuring that they have the best service to compete against Amazon and Google. Unfortunately, this leads to Sony being caught in the crossfire. This purchase could also mean that PlayStation players may never see another Elder Scrolls game or Fallout again. It is known that Sony is not as huge as the likes of Google and Amazon, and Microsoft knows because the real competition has a few more zeros after their market cap.
Xbox Gamepass is now at 15million subscribers and growing. There is no telling what Microsoft’s next move is, but the CEO of Microsoft did mention that they are open to purchasing more studios, with Xbox game development studios are currently sitting at 23 in total, 15 before the purchase of ZeniMax.
Update: There was a misquote here found in the article. It is now fixed. Quote was directly from Forbes.