Bethesda is known for games like Fallout and Elder Scrolls, which will augment Microsoft’s offerings in its Game Pass service, which has more than 15 million subscribers. Game Pass is tied to the Xbox console, the anchor of the company’s video game presence.
Microsoft said it expects the acquisition to close by the end of the year. “Bethesda brings an impressive portfolio of games, technology, talent, as well as a track record of blockbuster commercial success, to Xbox,” the company said in the official announcement.
In a note to clients, Wedbush Securities analyst Daniel Ives said the deal is the latest indication that CEO Satya Nadella is “laser focused on growing the consumer side of the house.” Cloud computing and enterprise software are powering the company’s results, Ives said, but “its consumer strategy has been on a treadmill as heavily tied to the mature PC/Windows environment.”
The deal comes a few days after the tech giant had its offer to acquire a stake in TikTok’s U.S. operations, which went to tech firm Oracle instead. After entering the 2010s in spotty shape compared with its high-flying 1980s and ’90s days, Microsoft has regained its stride recently, seeing its market value pass $1.5 trillion and developing ample resources for M&A.
New versions of the Xbox will hit retail on November 10 ahead of the holiday season. Sony is also planning to roll out the fifth-generation version of its PlayStation console that same week. Video game consumption, already healthy heading into 2020, has boomed during COVID-19 lockdowns.