Microsoft grabs some of world’s biggest games in $7.5 billion deal

Kellen Browning and Steve Lohr, The New York Times

Posted at Sep 22 2020 09:09 AM

Microsoft landed a major blow in its decades-long battle with its video game industry rival Sony on Monday, announcing the $7.5 billion acquisition of a video game company that narrowed the gap between the two tech giants’ offerings.

By buying game maker ZeniMax Media, the parent company of gaming studios like Bethesda, Microsoft gained control of major gaming titles like The Elder Scrolls, Fallout, Doom, Quake and Wolfenstein. The deal allows Microsoft to counter criticism that it lags behind Sony in the quality of its games while deepening its game catalog seven weeks before both Microsoft and Sony release a new generation of gaming consoles.

Gamers have long complained that Microsoft’s Xbox consoles lacked the type of exclusive, high-quality games that Sony promotes as a major selling point for its PlayStation consoles. Sony declined to comment on Microsoft’s purchase.

Microsoft did not say how many of its newly acquired games would be exclusive to the Xbox, but pointed to the remarks of Phil Spencer, the company’s executive vice president of gaming, who said in an interview with Bloomberg that games would be available to other consoles on a “case-by-case basis.”

Analysts and gamers praised the deal and said it demonstrated the company’s commitment to improving its game options for Xbox users.

The acquisition was a “major coup” for Microsoft, said Piers Harding-Rolls, a research director at Ampere Analysis, an analytics firm in London. “This deal catapults Microsoft’s games portfolio into a much stronger position,” he said.

The video game industry is exploding in popularity, helped in large part by the coronavirus pandemic, which has forced much of the world to remain indoors and find online entertainment. About 2.7 billion people are projected to play a game this year, according to the gaming market researcher Newzoo, and gamers worldwide are expected to spend nearly $160 billion in 2020.

The deal represents a shift in focus for Microsoft, which is mainly a business technology company, with most of its revenue coming from productivity and communications software, and cloud computing services sold over the internet. But its online gaming business and Xbox sales are growing rapidly. In the quarter that ended in June, Microsoft’s gaming revenue jumped by 64 percent, to $1.3 billion from the year-ago quarter.

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