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In its biggest gaming acquisition to date, Microsoft sealed a deal with taking over ZeniMax Media’s global operations while getting straight access to some of the popular gaming franchises. The acquisition will be closed by the second half of 2021.
On Monday, September 21, software computing giant Microsoft Corporation (NASDAQ: MSFT) announced that it will acquire ZeniMax Media is a $7.5 billion cash deal. This move with ZeniMax comes amidst the expansion plans of Microsoft in the gaming industry while getting more game development studios under Microsoft Xbox.
ZeniMax Media is the owner of the popular gaming publisher Bethesda. Moreover, the latest acquisition of ZeniMax also gives Microsoft access to some successful gaming franchises like The Elder Scrolls, Fallout, and Doom. Microsoft expects the gaming industry to be more than $200 billion in annual revenue by 2021. Thus, with its already active market presence with its Xbox Gaming consoles, the tech giant looks to expand its footprint further.
This will also be Microsoft’s biggest gaming company acquisition to date. The last was Microsoft’s acquisition of Mojang for $2.5 billion, back in 2014. This move brings the total Xbox Game Development studios to 23, over 50% jump from its previous 15. Speaking about the acquisition of ZeniMax, Microsoft CEO Satya Nadella said:
“Gaming is the most expansive category in the entertainment industry, as people everywhere turn to gaming to connect, socialize and play with their friends. Quality differentiated content is the engine behind the growth and value of Xbox Game Pass—from Minecraft to Flight Simulator. 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’s Upcoming Xbox Gaming Consoles
The timing of the latest deal looks to be perfect for Microsoft, as the company preps for unveiling its next-generation Xbox Gaming consoles in November. Reportedly, Microsoft will launch the $500 Xbox Series X and $300 Xbox Series S in November. Both of them will be directly competing with Sony’s PlayStation 5 and PlayStation 5 Digital Edition.
Besides, with the latest acquisition, Microsoft also plans to give a push to its cloud-gaming services like Xbox Game Pass. The Xbox Game Pass already has over 15 million subscribers. Microsoft said that it intends “to bring Bethesda’s future games into Xbox Game Pass the same day they launch on Xbox or PC”. ZeniMax Media Chairman and CEO Robert A. Altman said:
“This is a thrilling day for this company, our employees, and our fans. We have enjoyed a close partnership with Microsoft for decades, and this deal is a natural progression of those years working together. The big winners today are our fans. We are continuing to develop our slate of AAA games, but now with Microsoft’s scale and entire Game Stack, our games can only get better.”
Microsoft’s latest acquisition for ZeniMax Media after it lost to Oracle Corporation (NYSE: ORCL) in the bid for TikTok U.S. operations. TikTok finalized its deal with Oracle taking 12.5% in TikTok Global, which will go for public listing in the next 12 months. TikTok parent ByteDance still gets to keep an 80% stake in TikTok Global. Walmart Inc (NYSE: WMT) also managed to get a small stake of 7.5%.