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Sep 21, 2020
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About this Deal

Microsoft (MSFT) on Monday announced plans to purchase game publisher Bethesda Softworks's parent company, ZeniMax, in a landmark $7.5 billion acquisition deal.

Bethesda is one of the world's largest privately-held gaming developers, and its studios have produced several critically acclaimed franchises including "Elder Scrolls," "Fallout" and "Doom." Bethesda is also the developer behind "Starfield," one of the gaming world's most-anticipated unreleased titles.
Its acquisition is expected to help give a boost to Microsoft's Xbox Game Pass, a monthly subscription service similar to Netflix that grants users access to a catalog of more than 100 games. Game Pass has raised Microsoft's gaming revenues every year since its June 2017 debut.
"The ZeniMax acquisition instantly increases the value of GamePass and closes the content gap between Xbox and [PlayStation]," Joost van Dreunen, founder of video game investment firm New Breukelen, told CNN Business. "It raises the barriers to entry for aspiring new contenders like Amazon and Google."
The deal shows that Microsoft CEO Satya Nadella is focused on growing the company's consumer base, according to Wedbush Securities analyst Dan Ives, who notes the move came in the wake of Microsoft's failed bid to buy TikTok.
"While Xbox and gaming have been successful, [Microsoft] recognizes its need for consumer based revenue growth, which we believe this deal will directly help drive along," Ives wrote in a Monday brief on the acquisition.

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