September 22, 2020
Microsoft may be known as a business software giant, powering most of the world's PCs and building backroom technology and tools. But it's also spent more than $10 billion buying development studios behind some of the most popular video games in the world. To Microsoft CEO Satya Nadella, it's all about the future of software.
Though not known as a gamer himself, Nadella's made big bets on the video game industry, buying Minecraft maker Mojang for $2.5 billion shortly after he was named CEO in 2014. Then he bought five more studios in 2018, including role-playing game maker Obsidian, known for the space adventure The Outer Worlds and the well-received South Park: The Stick of Truth. In 2019, it bought Double Fine, maker of adventure game Psychonauts.
What's driven him is a belief that interactive entertainment will be a key technology in the next 10 years and that gamers who use Microsoft products expect the company to make titles like those made by the studios he's bought.
"You can't wake up one day and say, 'Let me build a game studio,'" Nadella said in an interview after the company announced its $7.5 billion cash purchase of ZeniMax Media, which owns several industry-leading game developers, including Bethesda Softworks and Id Software. "The idea of having content is so we can reach larger communities."
That's why Microsoft will consider buying even more video game companies in the future, he said, and why it continues to invest in its Xbox Game Pass subscription service.
"Content is just the incredible ingredient to our platform that we continue to invest in," Xbox head Phil Spencer said in that same interview. "This doubles the size of our creative organization."
Gamers will see a noticeable difference with Bethesda, Spencer said in the interview Monday, noting that the company's games will be offered on Microsoft's Xbox Game Pass subscription service the same time they hit store shelves. They'll also be available through Microsoft's xCloud video game streaming service, which allows people to play games over the internet similar to the way they stream movies from Netflix.
"This is a huge investment in games that they're going to get to play," he said.
Spencer also said Bethesda will run semi-independently, in an effort to keep the company building the games that brought it success in the first place. "It is about the culture of those teams," he said. "They're not about becoming us."
It's also why game companies will continue to be on Microsoft's radar. "We'll always look for places where there is that commonality of purpose, mission and culture," Nadella said, noting that the Xbox team has worked with ZeniMax companies including Bethesda since the first Xbox was released in 2001. "We will always look to grow inorganically where it makes sense."
www.cnet.com
