Editor’s note: This article is part of Day 2 (June 23, 2023) of the FTC vs. Microsoft and Activision Blizzard trial.
Phil Spencer, the Xbox chief at Microsoft, shed light on a significant reason behind the tech giant’s acquisition of ZeniMax Media, the parent company of Bethesda Softworks. During the recent FTC vs. Microsoft hearing, Spencer disclosed that Sony, Microsoft’s main competitor in the gaming industry, had engaged in practices of paying Bethesda to keep certain games exclusive to PlayStation. Concerned about falling further behind, Microsoft deemed it necessary to secure Bethesda’s ownership to remain viable in the business.
Microsoft made a bold move by investing a staggering $7.5 billion to acquire ZeniMax Media, the renowned developer behind critically acclaimed titles such as Elder Scrolls and Fallout. With the completion of the deal, Microsoft pledged to offer exclusive gaming experiences for the Xbox console and PC platforms. This commitment has already materialized in the form of Redfall, a highly anticipated title, and the imminent release of Starfield on September 6th. Additionally, the upcoming Indiana Jones game will also be exclusive to Xbox and PC.
During the hearing, Phil Spencer refrained from confirming whether the highly anticipated Elder Scrolls VI would be an Xbox exclusive. Given the game’s distant release date, Spencer stated that it was difficult to provide specific details about the platforms it would launch on. However, there have been previous hints that suggest the possibility of Elder Scrolls VI being an Xbox exclusive, although this remains uncertain as the game is still years away from completion.
Spencer’s testimony primarily focused on portraying Sony as an aggressive and hostile competitor. He highlighted the fact that every time Microsoft releases a game on PlayStation, Sony claims a significant portion of the revenue, amounting to 30%. This revenue, combined with other sources, is utilized by Sony to undermine Xbox’s presence in the market. Despite Microsoft’s continuous efforts to compete effectively over the past two decades, it has struggled to match Sony’s dominance.
To counter Sony’s dominance and level the playing field, Microsoft made the bold move of acquiring Bethesda. Furthermore, the company is actively pursuing the acquisition of another industry giant, Activision Blizzard, in a deal valued at a staggering $68.7 billion. This substantial investment demonstrates Microsoft’s determination to compete head-on with Sony, even at significant financial costs.