Microsoft is one of the biggest players in the video game industry thanks to Xbox, but last year it announced its intent to become even bigger. On September 21, 2020, Microsoft’s decision to purchase ZeniMax Media for $7.5 billion went public, meaning the tech conglomerate is preparing to acquire the parent company of Bethesda, Arkane Studios, and other developers. However, it will not be able to move forward with the deal until at least March.
The acquisition is currently going through an approval process via the European Union (EU)’s European Commission, an independent executive arm that proposes and enforces laws, allocates funding, and represents its countries in international affairs, according to the Commission’s website. It oversees the EU’s competition policies, and merger case filing 10001 shows Microsoft requested approval for its acquisition on January 29, 2021.
This merger case has a provisional deadline of March 5, 2021 as of this writing, and the Commissioner for Competition (currently Margrethe Vestager) will either be able to clear the deal with or without concession, or open a full-scale investigation according to a report by Reuters. Previous computer game publishing cases handed by this body include the Vivendi/Activision merger in 2008 and the Tencent/Supercell merger in 2016.
It will be interesting to see where the European Commission lands on this merger, given Microsoft would have potentially exclusive access to a number of popular franchises including Fallout, The Elder Scrolls, Doom, Dishonored, The Evil Within, and more based on ZeniMax’ stable of developers. Microsoft has promised to uphold current multiplatform agreements, and Xbox Chief Financial Officer Tim Stuart said it will primarily focus on making Bethesda games “first, better, or best” on Xbox.
That being said, even if the Microsoft and ZeniMax Media merger goes through, there is a chance that more may be coming down the line. Insiders have suggested that Microsoft is planning another Bethesda-level acquisition in 2021, though for now there have only been rumors circulating online.
While Microsoft has been in the news as of late, it is not the only company which has at least considered acquiring more development studios in recent months. Nintendo announced its plans to acquire Next Level Games, developer of Luigi’s Mansion 3, earlier this month. Tencent has also invested in Don’t Starve developer Klei Entertainment and Life is Strange developer Dontnod Entertainment since the new year began. Wherever the Microsoft and ZeniMax Media merger lands, it is sure to be a sign of bigger changes to come in the industry.
Sources: European Commission, Merger Case 10001, Commissioner of Competition, Reuters, ZeniMax Media
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