Bulletins

Microsoft bought ZeniMax for a slate of stellar first-party content

The deal is a huge boost for its Game Pass subscription service.

Microsoft bought ZeniMax for a slate of stellar first-party content

Microsoft gets an awful lot of prestige by buying ZeniMax, helping to boost its roster of first-party franchises.

Image: Bethesda

Microsoft announced that it bought video game giant ZeniMax on Monday for $7.5 billion. It's a lot of money, and it cements what we already knew: Microsoft is out to win the gaming industry.

ZeniMax is one of the most storied companies in gaming, counting some of the world's most beloved properties among its portfolio. It owns id Software, developer of such classics as Doom, Quake and Rage, as well as RPG-titan Bethesda, which makes The Elder Scrolls and Fallout. It also owns Arkane, developer of recent hit Dishonored.

In other words, Microsoft gets an awful lot of prestige by buying ZeniMax, helping to boost its roster of first-party franchises. Those have languished somewhat in recent years, most notably with delays to the upcoming Halo title. Heading into the next generation of consoles, Sony undoubtedly has the more attractive game lineup.

While Microsoft could make all of ZeniMax's games Xbox-exclusives in future, it seems to have bigger ambitions. It has said it will offer the Xbox versions as part of its Game Pass subscription. Microsoft is increasingly pushing the all-you-can-play subscription as the future of gaming, and one of the biggest struggles with that business model is licensing enough high-quality titles to keep users engaged. Buying ZeniMax provides an easy solution and is a clear shot at Sony — albeit one with huge upfront expense.

This is Microsoft's biggest gaming acquisition to date, dwarfing the $2.5 billion it paid for Minecraft developer Mojang back in 2014. And after Microsoft's failed TikTok bid, it can be viewed as a huge statement of intent: Though the company might have found its feet in enterprise, it hasn't forgotten about consumers, and it seems very happy to use its cash reserves to win at gaming.

This story will appear in tomorrow's edition of Source Code, our daily newsletter about what matters in tech. Sign up here.

Shakeel Hashim

Shakeel Hashim ( @shakeelhashim) is a former growth manager at Protocol, based in London. He was previously an analyst at Finimize covering business and economics, and a digital journalist at News UK. His writing has appeared in The Economist and its book, Uncommon Knowledge.

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Bulletins