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[Mmnow]

Double the money for ZERO. That’s what Xbox gold is. You’re paying for nothing. They attempted to get twice that. You all complained. Now they’ll get their pound of flesh elsewhere

Double what?

I'm giving you the benefit of the doubt here, and presuming you can't be this stupid.

I charge you $5 a month for a service. From tomorrow, I'm charging everybody who is new $10. Do you think enough people will take the $10 option to effectively double all income? Or do you think those same people would accept my other offer of $7 while still including all the same service, plus extra?

Double what?

 

[FrankWza]

Double what?

I'm giving you the benefit of the doubt here, and presuming you can't be this stupid.

I charge you $5 a month for a service. From tomorrow, I'm charging everybody who is new $10. Do you think enough people will take the $10 option to effectively double all income? Or do you think those same people would accept my other offer of $7 while still including all the same service, plus extra?

Double what?

Were you asleep when they attempted to double the price of gold?

 

[M1chl]

Were you asleep when they attempted to double the price of gold?

It's was friday evening, so probably hammered.

 

[FrankWza]

Double what?

I'm giving you the benefit of the doubt here, and presuming you can't be this stupid.

I charge you $5 a month for a service. From tomorrow, I'm charging everybody who is new $10. Do you think enough people will take the $10 option to effectively double all income? Or do you think those same people would accept my other offer of $7 while still including all the same service, plus extra?

Double what?

Were you asleep when they attempted to double the price of gold?

Microsoft backtracks on Xbox Live Gold price hike

You’ll also now be able to play games like Fortnite without Gold.

www.google.com

 

[FrankWza]

It's was friday evening, so probably hammered.

I think he was teach business 101 to a classroom filled with empty seats

 

[Mmnow]

Were you asleep when they attempted to double the price of gold?

No, were you?

I asked you a simple question, even asked you to give it a bit of thought, and got the answer "double".

How much money do you really think would have been brought in by doubling the price of Gold for new subscribers?

I'll give you a clue - it wouldn't have been anywhere close to double.

 

[DarkMage619]

That’s exactly what it is. Counting gold price in the equation is like saying you have to spend $499 for a series x to play games on. It’s a mandatory purchase either way.

Dealmaster: You can still convert 3 years of Xbox Live to Game Pass Ultimate for $1

Plus Prime-only deals on a bunch of Amazon devices, Xbox One gamepads, and more.

www.google.com

BUT HURRY....they’re going to close the loophole any YEAR now.

I'm not believing anything about Xbox without asking you first. Loopholes and pounds of flesh everywhere! When will MS finally be brought to justice?

 

[THE DUCK]

All Zenimax games not currently signed to deal will be xbox/pc exclusive, you can expect it to be announced soon now that the deal is completed.

 

[Batiman]

Some people discuss this as it is the end of playstation which is not

even if all bethesda games become exclusives other will rise and take this opportunity

nintindo did not die when microsoft purchased Rare

and microsoft did not put the world on fire with Rare

as matter of fact I see this as a chance for customers it will push Sony to be better

either way Microsoft will benefit from Bethesda games released on ps5 or not it is their revenue

You can’t really compare RARE to this. It’s nowhere in the same ballpark.

 

[FrankWza]

No, were you?

I asked you a simple question, even asked you to give it a bit of thought, and got the answer "double".

How much money do you really think would have been brought in by doubling the price of Gold for new subscribers?

I'll give you a clue - it wouldn't have been anywhere close to double.

Double. Unless you’re saying everyone who has an Xbox subs gold and everyone who was going to buy one already has one?
Or, do you think when they incorporate that doubling into a gp ultimate or similar variant nobody would resubscribe? However you want to slice it, you’ll pay 2 times the amount for the same nothing

 

[Clear]

Wow, not a single point from your last post defended. Fair enough.

Let's take these new points one by one as well.


Profit above all else is not a good way of running a business. This is business 101. If Xbox or Microsoft were hurting for change, I could see your point. But they're not, and in fact, despite your concern over revenues, we know that everybody is bringing in ridiculous amounts of money despite (because) Covid.

Microsoft's main goal here is to make more profit than the money would have made in interest. $500m a year is double or closer to triple the interest on $7.5b. $200m would do it. Keeping that in mind, who at Microsoft is going to protest if revenues drop from $500m to, let's be generous, half of that?

Especially if not putting the games on PlayStation today increases the number of people playing on Xbox or PC tomorrow?


There's a lot of presumptions in here. It seems your point, and correct me if I'm wrong, is "game development is expensive, and so are multi-billion dollar mergers".

Which Microsoft would have known before buying a game development company in a multi-billion dollar merger.

Those same costs are present whether the games go exclusive or not. The question is can Microsoft/Xbox foot the bill? Yes, they can. They can foot that bill and Zenimax will still be profitable. We're talking short-term costs here for the most part, and longer-term costs are put into a game's financing.

So then, this boils down to "is there more harm from releasing on PlayStation than benefit?"

That's up for discussion, but from everything we know about Microsoft's immediate goals, we've gotta say yes. People who can buy a game on PlayStation won't jump into Gamepass, and will probably just wait hoping for exclusive games to be ported. People who see Starfield is coming to PlayStation and are desperate to play it will pick that console, rather than playing it in the Xbox ecosystem.

We could go further, asking whether Microsoft benefits more from a possibly recurring $15 on Gamepass Ultimate than on the profits it'll make on a game released on PlayStation. We can't know the answer, but factor in limited market, multiplat gamers, porting costs etc and it's probably too close to call.


What difference does this make to whether games are going to be exclusive or not?

It benefits Microsoft to release as many games as possible as quickly as is sustainable. More quality games with shorter gaps between release dates means more incentive to stay subscribed. We don't have enough data to know what that means for Gamepass, but internally things are changing all the time. Bethesda's purchase hasn't happened overnight, and there's an internal schedule going forward probably for most of the generation with targets already written out, with Bethesda correct and present.

If you're suggesting some level of hidden cost because of the Bethesda purchase, where suddenly Ninja Theory and Obsidian are going to have games canceled and people leaving because of uncertainty, then you're asking me to disprove imagined scenarios in your head, and that's not a job anybody can do.


After having an okay argument in your last post, you've reverted to "Microsoft wouldn't leave that money on the table!" and that's disappointing.

Microsoft doesn't need money, it needs a way of making its vast fortune work for it. That means acquisitions and plenty of them while interest rates are low. Expect more purchases sooner rather than later.

And if you can't come up with a specific scenario where one of the biggest companies in the world needs to release its product on a competitor's device when they're not in a monopoly situation, then your suggestion holds no water.

The ball is in your court.

Oh for heaven's sake.

The point in summation is simple: Now is not an opportune time for full exclusivity. In 2-3 years the situation may well be very different, but in the here and now it presents more risk than potential gain.

I've explained why this is the case in exhaustive detail, and no, what I'm saying is factual not speculative. The particulars of the bill of goods MS is acquiring is publicly available as is the past performance of the Zenimax group.

The rest I just know from spending 3 decades in the industry, including biz-dev positions and pitching projects at a boardroom level. I'm not your average "fanboy".

And as I've explained previously, I have no dog in this fight. As a gamer I like what I like, and the plain truth is Zenimax product doesn't fall into that category. Its laughable to me that anyone would personalize a discussion like this beyond it being an interesting business strategy conundrum to theorize the outcome of.

If you actually read my posts I'm listing reason after reason in support of my prediction. Being a mixed, tapered approach where initially Zeni is run as an autonomous unit that allows MS/Xbox full and preferential access to its output and IP's. Until such time as the need for distribution/publication outside of the mothership is no longer a significant consideration. In much the same way they intend to gradually eliminate the reliance on console hardware to support their ambitions in the digital entertainment space.

Noone spends $7.5bn dollars to make quick profit. Its a long-term, strategic acquisition that will likely take 15-20 years to amortize fully. In the meanwhile its utility is primarily to bolster MS current slate of IP's.

The point you seem to be hung up on is the value of short-term gains that the integration of Zenimax properties to the Microsoft studios roster. My expectation is that the losses that would be incurred by adopting a strategy of full exclusivity would not be justified by equal growth in the ecosystem. Again at least until GamePass has several times its current subscriber base.

Yes, I keep stressing the costs and lengthiness of current AAA production cycles because its a significant occupier of assets and personnel that generates negative income until launch. It needs to be managed assiduously, especially during the phase at which this investment matures. Narrowing the distribution channel increases the stress on this, and to coin a phrase; there's no point in starting a fire in an airless room.

In short how much uplift can you expect by appealing to the same demographic product-wise in a tight time-frame? Release cadence will have to be carefully choreographed in order to build appeal, otherwise it just becomes wasteful and in games you can't afford to burn big IP's cheaply.

Upshot of all of this is that in my estimation a staggered approach is most useful because they will want to keep both their brand and IP strong, and not sacrifice the latter for small betterment of the former.

 

[Fredrik]

They are part of Xbox but seperate from XGS. Matt Booty can't manage 23 studios on his own and Bethesda has its own supply chain. Pete Hines will manage the Bethesda arm, Matt Booty XGS. Both report to Phil, Phil reports to Nadella.

So they will act like if they’re independent, kind of, and will have full control and publish their own games, just through Microsoft’s wallet?

If so then I can actually see them keep the games as multiplats, as dumb as it sounds, it’s pretty much a meme that Bethesda releases their games on everything except maybe calculators, can’t see them decide to be Xbox and PC exclusive if they’re in control.

They need to be transparent and talk about this. Asap.

 

[LisaMariaMartin]

So they will act like if they’re independent, kind of, and will have full control and publish their own games, just through Microsoft’s wallet?

No. Everything runs through Phil Spencer. They don't act as if they're independent. Microsoft just keeps the structure of the company intact which makes sense.

I'm guessing they will talk about it sometime starting tommorow. It's not really in their best interest if people talk more about exclusivity status than actual games.

 

[Fredrik]

No. Everything runs through Phil Spencer. They don't act as if they're independent. Microsoft just keeps the structure of the company intact which makes sense.

I'm guessing they will talk about it sometime starting tommorow. It's not really in their best interest if people talk more about exclusivity status than actual games.

Ah okay.
Agreed on the second part. Anything is better than this. Give PS fans the time to go through the 5 stages of grief. Or let Xbox fans vent about Microsoft’s stupidity. After that show some gameplay and turn the crankiness to excitement.

 

[Bernkastel]

They are part of Xbox but seperate from XGS. Matt Booty can't manage 23 studios on his own and Bethesda has its own supply chain. Pete Hines will manage the Bethesda arm, Matt Booty XGS. Both report to Phil, Phil reports to Nadella.

So they will act like if they’re independent, kind of, and will have full control and publish their own games, just through Microsoft’s wallet?

If so then I can actually see them keep the games as multiplats, as dumb as it sounds, it’s pretty much a meme that Bethesda releases their games on everything except maybe calculators, can’t see them decide to be Xbox and PC exclusive if they’re in control.

They need to be transparent and talk about this. Asap.

"Illustration created by Klobrille". When did Microsoft say anything about Bethesda being separate from Xbox?

Welcoming the Talented Teams and Beloved Game Franchises of Bethesda to Xbox - Xbox Wire

Critically acclaimed creators of The Elder Scrolls, Fallout, Wolfenstein, DOOM, Dishonored, Quake, Starfield and more join Team Xbox Today is a special day, as we welcome some of the most accomplished studios in the games industry to Xbox. We are thrilled to announce Microsoft has entered into...

news.xbox.com

 

[FritzJ92]

So they will act like if they’re independent, kind of, and will have full control and publish their own games, just through Microsoft’s wallet?

If so then I can actually see them keep the games as multiplats, as dumb as it sounds, it’s pretty much a meme that Bethesda releases their games on everything except maybe calculators, can’t see them decide to be Xbox and PC exclusive if they’re in control.

They need to be transparent and talk about this. Asap.

No, MS bought Bethesda... it isn't a merger.. .everything is running through Phil Spencer, I tried to correct that image and people said "I'm wrong..." However, there are zero indication that Bethesda is operating individually... MS would've been better off investing into their company instead of buying it.

 

[Mmnow]

Oh for heaven's sake.

The point in summation is simple: Now is not an opportune time for full exclusivity. In 2-3 years the situation may well be very different, but in the here and now it presents more risk than potential gain.

I've read your posts, and think I've responded in good faith and in detail. I haven't called you a fanboy. Others have accused you of it, I haven't. I've attacked your arguments, because I don't think they're strong.

There are plenty of reasons why Xbox might decide to make Bethesda's games multiplat. Convenience and revenue are not good reasons when dealing at this scale.

Noone spends $7.5bn dollars to make quick profit. Its a long-term, strategic acquisition that will likely take 15-20 years to amortize fully. In the meanwhile its utility is primarily to bolster MS current slate of IP's.

The point you seem to be hung up on is the value of short-term gains that the integration of Zenimax properties to the Microsoft studios roster. My expectation is that the losses that would be incurred by adopting a strategy of full exclusivity would not be justified by equal growth in the ecosystem. Again at least until GamePass has several times its current subscriber base.

This is not true at all. In every post I've asked you to justify the long-term impact of choosing to put Zenimax games on PlayStation today.

Presuming all Zenimax games going forward are current gen, there are many more people within the scope of PC/Xbox/Mobile than on PlayStation 5. Many times more. And at this stage in the generation, I'd expect those buying a PS5 to also at least be open to also buying an Xbox.

What losses would be incurred by going fully exclusive that wouldn't also be incurred by not going fully inclusive?

If you're saying "they make more money being multi-plat and cover these things" then you're right, but by how much? I don't think it's as much as you think it is.

In short how much uplift can you expect by appealing to the same demographic product-wise in a tight time-frame? Release cadence will have to be carefully choreographed in order to build appeal, otherwise it just becomes wasteful and in games you can't afford to burn big IP's cheaply.

You're not appealing to the same demographic. Every major game that is put on Gamepass brings more people into the Xbox ecosystem, and some of those people will now not go into the PlayStation ecosystem.

I think the problem we're having is that you're putting way more emphasis on those buying only a PS5 than I am. We're early into a generation and everything is up for grabs. There is no 100m PlayStation4Lifers. As I said in my first post to you, now is exactly the time you make the decision to go full exclusive.

And we're not talking exclusive to Gamepass. We're not talking exclusive to Xbox. We're talking exclusive to that ecosystem that effectively just means "everywhere except PlayStation and Switch".

 

[Silent Viper]

I want them all as exclusives, so that i can witness the biggest meltdown of the year

 

[LisaMariaMartin]

Oh for heaven's sake.

The point in summation is simple: Now is not an opportune time for full exclusivity. In 2-3 years the situation may well be very different, but in the here and now it presents more risk than potential gain.

I've explained why this is the case in exhaustive detail, and no, what I'm saying is factual not speculative. The particulars of the bill of goods MS is acquiring is publicly available as is the past performance of the Zenimax group.

The rest I just know from spending 3 decades in the industry, including biz-dev positions and pitching projects at a boardroom level. I'm not your average "fanboy".

And as I've explained previously, I have no dog in this fight. As a gamer I like what I like, and the plain truth is Zenimax product doesn't fall into that category. Its laughable to me that anyone would personalize a discussion like this beyond it being an interesting business strategy conundrum to theorize the outcome of.

If you actually read my posts I'm listing reason after reason in support of my prediction. Being a mixed, tapered approach where initially Zeni is run as an autonomous unit that allows MS/Xbox full and preferential access to its output and IP's. Until such time as the need for distribution/publication outside of the mothership is no longer a significant consideration. In much the same way they intend to gradually eliminate the reliance on console hardware to support their ambitions in the digital entertainment space.

Noone spends $7.5bn dollars to make quick profit. Its a long-term, strategic acquisition that will likely take 15-20 years to amortize fully. In the meanwhile its utility is primarily to bolster MS current slate of IP's.

The point you seem to be hung up on is the value of short-term gains that the integration of Zenimax properties to the Microsoft studios roster. My expectation is that the losses that would be incurred by adopting a strategy of full exclusivity would not be justified by equal growth in the ecosystem. Again at least until GamePass has several times its current subscriber base.

Yes, I keep stressing the costs and lengthiness of current AAA production cycles because its a significant occupier of assets and personnel that generates negative income until launch. It needs to be managed assiduously, especially during the phase at which this investment matures. Narrowing the distribution channel increases the stress on this, and to coin a phrase; there's no point in starting a fire in an airless room.

In short how much uplift can you expect by appealing to the same demographic product-wise in a tight time-frame? Release cadence will have to be carefully choreographed in order to build appeal, otherwise it just becomes wasteful and in games you can't afford to burn big IP's cheaply.

Upshot of all of this is that in my estimation a staggered approach is most useful because they will want to keep both their brand and IP strong, and not sacrifice the latter for small betterment of the former.

This makes no sense. Why would they wait until Sony can potentially build their own game pass like solution (psnow?) instead of striking while the iron is hot? Why would they wait until Sony has once again build a 100M userbase instead of leveraging their content while people are still choosing which ecosystem to invest in?

Bethesda already moved away from last gen (and 170M consoles). Ghostwire is PS5+PC only. Deathloop is PS5+PC only. I presume Starfield will be too. Same as TES6. They will already have to adjust to the lower userbase of this new generation.

 

[Fredrik]

I want them all as exclusives, so that i can witness the biggest meltdown of the year

I don’t care about any meltdown but if I had Phil’s role I would be a brutal douchebag, everything including Minecraft would instantly be exclusive, I would buy a bunch of more publishers too, and some timed exclusives. Sony is way more aggressive than MS, and honestly, it works. Nobody else in this industry is Mr nice guy except Phil. He needs to drop that act. Can’t be friends with everyone.
You think Peter Moore wouldn’t have tried to slaughter Sony with a big evil grin on his face while repeating ”So awesome”?

 

[Derktron]

All Zenimax games not currently signed to deal will be xbox/pc exclusive, you can expect it to be announced soon now that the deal is completed.

Sources to that claim?

 

[Derktron]

I don’t care about any meltdown but if I had Phil’s role I would be a brutal douchebag, everything including Minecraft would instantly be exclusive, I would buy a bunch of more publishers too, and some timed exclusives. Sony is way more aggressive than MS, and honestly, it works. Nobody else in this industry is Mr nice guy except Phil. He needs to drop that act. Can’t be friends with everyone.
You think Peter Moore wouldn’t have tried to slaughter Sony with a big evil grin on his face while repeating ”So awesome”?

I agree, Phil Spencer is too nice in the industry to know the real deal, even Nintendo knows to not be nice sometimes.

 

[Bernkastel]

I don’t care about any meltdown but if I had Phil’s role I would be a brutal douchebag, everything including Minecraft would instantly be exclusive, I would buy a bunch of more publishers too, and some timed exclusives. Sony is way more aggressive than MS, and honestly, it works. Nobody else in this industry is Mr nice guy except Phil. He needs to drop that act. Can’t be friends with everyone.
You think Peter Moore wouldn’t have tried to slaughter Sony with a big evil grin on his face while repeating ”So awesome”?

Xbox is not the target audience of Minecraft. Its best be kept separate.

 

[Fredrik]

I agree, Phil Spencer is too nice in the industry to know the real deal, even Nintendo knows to not be nice sometimes.

Lol yeah Phil is constantly flirting with Nintendo but they just go slash ignore on him everytime. It’s comical. You see MS games on Switch but when did you see Nintendo games on Xbox? It’s a one sided crush or something. I’m amazed that N haven’t tried to rip MS to shreds for leaving RetroArch untouched on users consoles since launch. It’s the best way to play old Nintendo games in the living room, possibly better than original hardware, and it’s crazy that they haven’t forced MS to brick the console with an update or something to get the app removed.

 

[Fredrik]

Xbox is not the target audience of Minecraft. Its best be kept separate.

Like I said, I would be a douchebag, I wouldn’t care - ”Stop crying and tell your mom to buy an Xbox if you want to play Minecraft 2.”

 

[Derktron]

Lol yeah Phil is constantly flirting with Nintendo but they just go slash ignore on him everytime. It’s comical. You see MS games on Switch but when did you see Nintendo games on Xbox? It’s a one sided crush or something. I’m amazed that N haven’t tried to rip MS to shreds for leaving RetroArch untouched on users consoles since launch. It’s the best way to play old Nintendo games in the living room, possibly better than original hardware, and it’s crazy that they haven’t forced MS to brick the console with an update or something to get the app removed.

Nah home boy, that’s not how things work. Nintendo is Nintendo. Nintendo stays pure.

 

[Bernkastel]

Like I said, I would be a douchebag, I wouldn’t care - ”Stop crying and tell your mom to buy an Xbox if you want to play Minecraft 2.”

Brand image is a thing. You gain nothing by making Minecraft exclusive, the Minecraft audience will not buy a Xbox. Imagine Sony made Fate Grand Order exclusive to their platform.

 

[DaGwaphics]

There are no "long term issues", Zenimax has always been a viable, profitable business. The danger is that changing its operating practices will result in loss of earnings, and considering that this is a business that generates over $500mil a year in revenue even a 10% drop is a very considerable chunk of change.

And the plain fact is that dropping other platforms will cause revenue to fall even more than that, there is simply no way that MS can cover the shortfall because they simply cannot manufacture and sell enough hardware in the equivalent time-frame. Especially following a year of component supply chain disruption caused by Covid.

At the start of a console cycle, everyones revenue falls because the addressable market simply isn't big enough. Its why we have 2 years or more of cross-gen product. Doubling down on that loss by artificially narrowing the audience further is just going to result in oceans of red-ink.

They may have paid $7.5b to buy the car, but now they need to run it too. With over 1000 employees spread across every continent we're talking about millions a month in burn-rate, and even if they downsize aggressively they still have to deal with negative PR, one-off costs incurred for forced redundancies and site reorganizations, not to mention the loss of morale and productivity in a workforce unsure of their future.

Oh, and of course you can't expect other studios under the MIcrosoft Studios umbrella to be untouched by any of this. Its going to have scheduling and content knock-ons for everyone, because they can't just drop a dozen titles onto GamePass in the same quarter, once every 3 or 4 years! Dates are going to get bumped, milestones adjusted and things that are a bit too similar to other things are going to get nixed.

Seriously, how many new Gamepass subs is it going to cost to underwrite all of that?

At the end of the day, Zeni games have traditionally sold best on PC. Even if they gave up every $ earned from PS, half their revenue is probably still in tact. Then you have to figure in the potential growth of MS's ecosystem overall, where even a 5 or 10% positive change could cover every $ of revenue Zeni generally earns in a year and things look less black and white. Xbox is a 10b+ per year revenue earner for MS, it doesn't take much growth there to cover any losses from PS sales. It's all about the platform, always has been, always will be. That's where the real money is made.

 

[Fredrik]

Brand image is a thing. You gain nothing by making Minecraft exclusive, the Minecraft audience will not buy a Xbox. Imagine Sony made Fate Grand Order exclusive to their platform.

My kids used to play Minecraft on Xbox One. Now they’re 100% playing on Switch. I doubt that they wouldn’t instantly swap to Xbox if the big summer update they can’t stop talking about was exclusive to Xbox. They aren’t playing in portable mode, they just like to play it where all their other games are.

 

[Crimson_Fate]

Here is an older article which looks at both sides of this. Its worth reading in its entirety.

What’s $7.5 billion between friends? That’s been the general reaction of the gaming and business press to the news last week that Microsoft will be spending that sum to acquire ZeniMax Media, the parent company of, among others, powerhouse video-game studio Bethesda Game Studios, maker of Fallout 4, Doom, and Skyrim. Coverage of the deal has focused on how Bethesda will help Microsoft’s overall gaming strategy, by driving users to its Netflix-style GamePass service (which offers users access to an array of games for $15 a month), and whether Microsoft will now make Bethesda’s games exclusive, keeping them from owners of Sony’s PlayStation 4 and the forthcoming PlayStation 5.

In other words, the discussion has been all about whether it makes sense for Microsoft to ally itself with Bethesda. But in the process, a bigger, and in some ways more interesting, question has been skipped over: Even if allying with Bethesda makes sense (which it does), why would Microsoft buy ZeniMax to do it?

That may seem like a foolish question, given that buying other companies is something that most big companies do as a matter of course: From 2014 to 2019, M&A activity averaged close to two trillion dollars a year in the U.S. alone. But all that activity hasn’t changed a basic truth, which is that most deals are great for the company being acquired, and not so great for the company doing the acquiring. As Aswath Damodaran, a finance professor at N.Y.U., puts it, “More value is destroyed by acquisitions than by any other single action taken by companies.” Microsoft itself is a case in point. In 2013, it spent $7.2 billion to acquire Nokia’s smartphone business, and within two years was forced to write off the entire value of the acquisition as worthless.

The Nokia deal is an extreme example. What’s more common is that deals go wrong because the buyer just overpays. And that’s a serious risk in ZeniMax’s case. It’s true that the purchase means Microsoft will get all the company’s intellectual property and its future profits. But in exchange, Microsoft is giving up $7.5 billion in cash. That’s a ton of money — it’s nearly as much as what Disney spent in total to buy Star Wars and Marvel, two of the most valuable cultural franchises in history. And on top of that, Microsoft is going to be bearing all of ZeniMax’s game development costs and the cost of its 2,300 employees. As a result, for Microsoft to get a barely reasonable return on its investment, ZeniMax will have to generate at least $500 million in profits every year. Considering that that’s around the company’s estimated annual revenue in most years, that’s a big ask.

It’s possible, as many gaming journalists have suggested, that Microsoft is mainly buying ZeniMax so it can make Bethesda’s games exclusive to its new Xbox Series X console. Microsoft’s major competitor, Sony, has lots of high-profile exclusive games for its new PlayStation 5 console. The assumption is that Bethesda could help provide something similar for Microsoft, so that gamers desperate to play Elders Scrolls VI whenever it finally appears, or the next Fallout game, will shell out hundreds of dollars for a Series X.

The only problem with this strategy is that Bethesda’s profits right now come from selling games across all platforms, including Sony’s. If Bethesda were to stop making games for the PlayStation, that would wipe out a huge chunk of its annual profits — the very profits that are supposed to justify the acquisition cost. Paradoxically, if Bethesda is making games exclusively for Microsoft, it’s probably less valuable, not more.

Much of the analysis of the deal succumbs to the fallacy of ownership: the idea that you need to own a company in order to derive value from it. You don’t. If Microsoft wanted new Bethesda games to be available on GamePass on its first day of release, it could make a deal to set that up. If it really wanted Bethesda to release certain games exclusively only on the Xbox Series X, it could cut a deal for that, pricey though it would be. In fact, Bethesda has two games right now that will be coming out exclusively on the PlayStation 5, and Sony, obviously, didn’t need to buy the company to make that happen.

That doesn’t mean buying, as opposed to partnering, is always a bad idea. After all, in 2000, a year before it launched the Xbox, its first ever game console, Microsoft spent $40 million to buy game developer Bungie, whose game Halo became the Xbox’s killer app, and would eventually generate billions in revenue for the company. That’s one of the great acquisitions of all time.


But the more you spend, the higher the returns need to be. And in ZeniMax’s case, Microsoft said, in the press release announcing the deal, that its impact on operating profit will be “minimal” in 2021 and 2022. Since games are a cyclical business, that’ll change in years when Bethesda has a huge hit. But if the deal’s not going to generate much profit in the year after it’s completed, Microsoft’s not earning back its $7.5 billion anytime soon.

So from an economic point of view it’s hard to see how this deal makes sense. But Microsoft doesn’t seem too worried about that, perhaps because this deal, ultimately, isn’t about the bottom line. It’s about peace of mind. It isn’t about taking risks so much as trying to hedge against them.

After all, buying ZeniMax guarantees one thing that a partnership can’t: that no one else can buy ZeniMax. It also guarantees that Bethesda games will always be on GamePass from day one, and helps ensure that GamePass will have content users want. And $7.5 billion still seems like a steep price to pay. But Microsoft has $130 billion in the bank, and its market cap is $1.5 trillion. When you’re that rich, you might be willing to spend seven and a half billion dollars in order to sleep a little better at night.

 

[01011001]

Brand image is a thing. You gain nothing by making Minecraft exclusive, the Minecraft audience will not buy a Xbox. Imagine Sony made Fate Grand Order exclusive to their platform.

I honestly think they would tho. Minecraft is gigantic. now you could argue it is as big as it is because it is on everything, but that's only speculation. of course it would always also be on PC but console exclusivity could have had a positive impact on Xbox sales.

 

[M16]

I’m amazed that N haven’t tried to rip MS to shreds for leaving RetroArch untouched on users consoles since launch.

nintendo cant even keep retroarch off the switch

 

[01011001]

I’m amazed that N haven’t tried to rip MS to shreds for leaving RetroArch untouched on users consoles since launch. It’s the best way to play old Nintendo games in the living room, possibly better than original hardware, and it’s crazy that they haven’t forced MS to brick the console with an update or something to get the app removed.

it's 100% legal so they can't force anything. also emulators will come to consoles no matter what any dev does. look at the Switch, the 3DS, the Wii U, the og Xbox especially... what microsoft is doing is very clever, they give you an official way to use emulators on your Xbox and that keeps people from jailbreaking the system. meanwhile the PS4 is jailbroken and can play emulators as well as pirated PS4 games and online hacks

soon even the freaking browser on the Xbox system will be easily able to play emulators. even now you can open up the current edge browser on your One or Series console and play 8bit and 16bit games by loading the ROMS onto your onedrive. https://nesbox.com/ <- here's a link for anyone wanting to try it
the new Edge browser (it is available to some preview users) can play Stadia even, and web based emulators will run even better on it than on the current one.´since the new one is based on Chromium. and since GeForce Now also seems to get a browser version, you'll soon also be able to play PC games fron your Steam, Epic or ubisoft library on your Xbox Browser

 

[Clear]

At the end of the day, Zeni games have traditionally sold best on PC. Even if they gave up every $ earned from PS, half their revenue is probably still in tact. Then you have to figure in the potential growth of MS's ecosystem overall, where even a 5 or 10% positive change could cover every $ of revenue Zeni generally earns in a year and things look less black and white. Xbox is a 10b+ per year revenue earner for MS, it doesn't take much growth there to cover any losses from PS sales. It's all about the platform, always has been, always will be. That's where the real money is made.

Its funny that people have been accusing me of making assumptions but sorry to say this, but I find it highly doubtful that millions of people are suddenly going to buy Xbox just because Zenimax franchises became console exclusive!

1. These games would always have been published on Xbox in the first place.
2. They all fit into existing popular genres on Xbox, not so much on Playstation which is hardly synonymous with WRPG and FPS titles.
3. Their presence as part of GamePass would already bequeath a huge competitive advantage at launch over Playstation.

Why is exclusivity so monetarily important? Isn't GamePass enough?

There's a bit of double-speak of going on here too. I mean if sales on Playstation aren't that substantial, why should the uplift on Xbox be any greater? You can't have it both ways because sales are just getting displaced, not created. The kicker of course being that a proportion of the sales on Xbox and PC are going to shrink as a result if they are included on GamePass.

Again, I'd like to hear why lifetime exclusivity as opposed to timed exclusivity is worth the loss? Especially when the production and marketing apparatus for these other SKU's is already in place, and no doubt a significant money and manpower investment has already been made in the builds pre-release.

Is sticking it to Sony fans really worth that?

 

[12Dannu123]

Its funny that people have been accusing me of making assumptions but sorry to say this, but I find it highly doubtful that millions of people are suddenly going to buy Xbox just because Zenimax franchises became console exclusive!

1. These games would always have been published on Xbox in the first place.
2. They all fit into existing popular genres on Xbox, not so much on Playstation which is hardly synonymous with WRPG and FPS titles.
3. Their presence as part of GamePass would already bequeath a huge competitive advantage at launch over Playstation.

Why is exclusivity so monetarily important? Isn't GamePass enough?

There's a bit of double-speak of going on here too. I mean if sales on Playstation aren't that substantial, why should the uplift on Xbox be any greater? You can't have it both ways because sales are just getting displaced, not created. The kicker of course being that a proportion of the sales on Xbox and PC are going to shrink as a result if they are included on GamePass.

Again, I'd like to hear why lifetime exclusivity as opposed to timed exclusivity is worth the loss? Especially when the production and marketing apparatus for these other SKU's is already in place, and no doubt a significant money and manpower investment has already been made in the builds pre-release.

Is sticking it to Sony fans really worth that?

Do you see Netflix or Disney release their content on each other's platform? If not, why should Microsoft do it?

 

[ManaByte]

Do you see Netflix or Disney release their content on each other's platform? If not, why should Microsoft do it?

Because Microsoft likes money, of course. And obviously Netflix and Disney do not.

 

[Clear]

Do you see Netflix or Disney release their content on each other's platform? If not, why should Microsoft do it?

Why release on Steam? Why isn't Minecraft platform exclusive? And why are you trying to match up movies with games when the latter has many more methods of exhibition/distribution/monetization? Oh and also has an entirely different and far shorter pattern of consumption?

 

[01011001]

Its funny that people have been accusing me of making assumptions but sorry to say this, but I find it highly doubtful that millions of people are suddenly going to buy Xbox just because Zenimax franchises became console exclusive!

Skyrim sold 20million units... if you can only get the new one on Xbox and PC a lot of people will either get an Xbox, a PC or Gamepass on their phones. Microsoft doesn't care which one of their platforms you use.

 

[LisaMariaMartin]

Its funny that people have been accusing me of making assumptions but sorry to say this, but I find it highly doubtful that millions of people are suddenly going to buy Xbox just because Zenimax franchises became console exclusive!

1. These games would always have been published on Xbox in the first place.
2. They all fit into existing popular genres on Xbox, not so much on Playstation which is hardly synonymous with WRPG and FPS titles.
3. Their presence as part of GamePass would already bequeath a huge competitive advantage at launch over Playstation.

Why is exclusivity so monetarily important? Isn't GamePass enough?

There's a bit of double-speak of going on here too. I mean if sales on Playstation aren't that substantial, why should the uplift on Xbox be any greater? You can't have it both ways because sales are just getting displaced, not created. The kicker of course being that a proportion of the sales on Xbox and PC are going to shrink as a result if they are included on GamePass.

Again, I'd like to hear why lifetime exclusivity as opposed to timed exclusivity is worth the loss? Especially when the production and marketing apparatus for these other SKU's is already in place, and no doubt a significant money and manpower investment has already been made in the builds pre-release.

Is sticking it to Sony fans really worth that?

Exclusive content drives consoles which drives subs. Do you think Sony got successful by sharing their goods? Why are they still aggressive when it comes to exclusive content on PS5?

Final Fantasy games all fit into popular genres on PS5, not so much on Xbox which is hardly synonymous with JRPGs. Doesn't stop them from denying Xbox users from playing them.

You don't seem to understand that it's not about any single game being exclusive or even a group of games. It's about the whole package.

Having Halo, Forza and Gears as exclusives is nice. You know whats even better? Having Halo, Forza, Gears, Elder Scrolls, Fallout, Doom and Wolfenstein as exclusives.

Why release on Steam? Why isn't Minecraft platform exclusive? And why are you trying to match up movies with games when the latter has many more methods of exhibition/distribution/monetization? Oh and also has an entirely different and far shorter pattern of consumption?

Because MS and Sony both realize that there is a subset of users who are gaming on PC and will never in a million lifetimes switch over to consoles. PC is not a direct competitor for them. Minecraft is a platform. They were open from the start and made it very clear in the initial press release that Minecraft would stay multiplatform. They didn't do this here. Instead they made a big deal about Bethesda joining Xbox, a day before pre orders start with a huge banner that says "XBOX + BETHESDA". Can't get any clearer than that.

I would honestly be very surprised to see any games not already announced on PS5.

 

[Clear]

Skyrim sold 20million units... if you can only get the new one on Xbox and PC a lot of people will either get an Xbox, a PC or Gamepass on their phones. Microsoft doesn't care which one of their platforms you use.

Or pirate it. Or not bother with it at all.

Generally speaking people react badly when they feel like they are being strong-armed onto a service they otherwise have no interest in. e.g. Tomb Raider, or more on point games being exclusive to EGS.

But hey, Tim Sweeney is a giant douche and Phil Spencer is just ducky!

And no. PC is not one of their platforms because have no direct means of monetizing games on it. You may as well say the internet is a Microsoft platform if you want to broaden out the terms to that degree.

L lisa23041996

There's a difference between timed exclusivity which is what Sony shells out for, and lifetime exclusivity which as I keep stressing gains little if the SKU is cheap to produce. Stop talking like I've discounted all forms of exclusivity, I have never stated that. Go back and reread my posts.

 

[Fredrik]

it's 100% legal so they can't force anything. also emulators will come to consoles no matter what any dev does. look at the Switch, the 3DS, the Wii U, the og Xbox especially... what microsoft is doing is very clever, they give you an official way to use emulators on your Xbox and that keeps people from jailbreaking the system.

I’m not talking about the developer mode, I know they can’t remove Retroarch from there, that has it’s limitations though since you have too boot the console in dev mode and can’t play retail games without a 5 minutes reboot.

I’m talking about how the Retroarch retail app is still very much working, giving you access to a great living room box for emulators side by side with the usual AAA games and with Remote Play and screenshots and videos and all that other stuff working just as with any other game. No reboot needed. It’s amazing. And it’s wild that MS haven’t released a system update to block it.

I guess it might be because the snowball has rolled too far already... Maybe they’re scared of an ugly backlash and lost supporters in a time when they need more positivity... The multiplat advantage didn’t happen, can’t survive on Gamepass hype alone, retro gamers are a loud bunch too... ”- Let’s close our eyes for a bit and pretend we don’t know what they’re doing...”

 

[Kev Kev]

 

[Iced Arcade]

Why release on Steam? Why isn't Minecraft platform exclusive? And why are you trying to match up movies with games when the latter has many more methods of exhibition/distribution/monetization? Oh and also has an entirely different and far shorter pattern of consumption?

Why isn't compulsion, double fine, inxile, ninja theory, Obsidian then? All have which have been recently acquired by Microsoft. After a few already announced games, they are all exclusive.

Also Minecraft games were already out and currently announced. Not to mention Minecraft is more of its own platform.

 

[Clear]

Why isn't compulsion, double fine, inxile, ninja theory, Obsidian then? All have which have been recently acquired by Microsoft. After a few already announced games, they are all exclusive.

Also Minecraft games were already out and currently announced. Not to mention Minecraft is more of its own platform.

Because they don't have established high-selling franchises. All were struggling financially which is how MS snapped them up so easily.

 

[quest]

Because they don't have established high-selling franchises. All were struggling financially which is how MS snapped them up so easily.

Playground has a successful selling series that should be multiplatform then right? They were purchased at the
Same time as the other new studios.

Microsoft Buys ‘Forza’ Developer Playground Games

Playground Games, the indie British game developer best known for its work on the Forza games, was acquired by Microsoft.

variety.com

 

[Iced Arcade]

Because they don't have established high-selling franchises. All were struggling financially which is how MS snapped them up so easily.

Alright alright clearly this conversation isn't needed lol

 

[01011001]

Or pirate it. Or not bother with it at all.

in order to pirate it you will still need a PC tho... what's that logic? if Edler Scrolls is only on PC and XBox you can't magically pirate a PS5 version of it

I’m not talking about the developer mode, I know they can’t remove Retroarch from there, that has it’s limitations though since you have too boot the console in dev mode and can’t play retail games without a 5 minutes reboot.

I’m talking about how the Retroarch retail app is still very much working, giving you access to a great living room box for emulators side by side with the usual AAA games and with Remote Play and screenshots and videos and all that other stuff working just as with any other game. No reboot needed. It’s amazing. And it’s wild that MS haven’t released a system update to block it.

I guess it might be because the snowball has rolled too far already... Maybe they’re scared of an ugly backlash and lost supporters in a time when they need more positivity... The multiplat advantage didn’t happen, can’t survive on Gamepass hype alone, retro gamers are a loud bunch too... ”- Let’s close our eyes for a bit and pretend we don’t know what they’re doing...”

I also wasn't talking exclusively about dev mode. this can literally prevent the system from being jailbroken as there is way less incentive to do it for homebrew developers and users.
look at what happened to the PS3. it was not soft or hard modded whatsoever... UNTIL Sony patched out the support for Linux. literally a few weeks after that the PS3 was jailbroken, open as can be, after years of it not being touched. Why? because homebrew devs couldn't use Linux anymore for their projects on PS3, even tho that Linux mode was very limited hardware wise, it still prevented the PS3 from being jailbroken.

Microsoft lets users put homebrew on their system through these semi-official ways to prevent their system from being targeted by people trying to open it up. pretty sure someone at MS officially stated this a while back

 

[Edgelord79]

Some folks here need to upgrade their inventory slots.

 

[FritzJ92]

Dev time cold be re-routed into making better games instead of supporting another dev kit, that alone is worth Microsoft making the games exclusive... among the obvious reason that it'll increase their portfolio of exclusive games

 

[Fredrik]

Microsoft lets users put homebrew on their system through these semi-official ways to prevent their system from being targeted by people trying to open it up. pretty sure someone at MS officially stated this a while back

Hmm well lets hope they keep it that way then! I think I’ve used RetroArch more than any other game so far