Microsoft has made substantial investments in their Xbox division in the recent months. The Redmond giant spent $7.5 billion in cash to acquire ZeniMax Media, the holding company behind many prominent studios including iD Software and Bethesda. That’s not all, Microsoft also acquired Activision in a whopping all-cash transaction valued at $68.7 billion.
The reasoning behind is simple, Microsoft looks at GamePass as a substantial pillar to the Xbox brand going forward. Microsoft like many other big tech companies are at a convergence, where they all see the future to be subscription based. And this has been evident in other Microsoft services too, like Office which is now available only on a subscription.
GamePass, which is a monthly subscription service for games, needs a constantly updating library with a healthy selection of AAA games to keep gamers invested. And the recent acquisitions by Microsoft is clearly aimed to address these concerns. That’s not all though, according to a recent SEC filing by Microsoft, the company is looking forward to acquire even more studios.
Our exclusive game content is created through Xbox Game Studios, a collection of first-party studios creating iconic and differentiated gaming experiences. We continue to invest in new gaming studios and content to expand our IP roadmap and leverage new content creators. These unique gaming experiences are the cornerstone of Xbox Game Pass, a subscription service and gaming community with access to a curated library of over 100 first- and third-party console and PC titles.
Microsoft with the ZeniMax and Activision acquisition already has a healthy selection of IPs, but it seems Phil Spencer is still not convinced. Moreover, further acquisitions might not be as big as the previous ones, and the company might prefer to acquire smaller indie studios this time around.
Sometime back in 2019, Phil Spencer in an interview to Eurogamer, also talked about lacking Asian studios, stating “Now we have studios in Canada, studios in other parts of the US. I think we have a hole in Asia. I’ve said that both to Matt and publicly. I would love to have more of an influence in our own first-party team from Asian creators. There’s nothing that’s imminent, so it’s not a pre-announce of something” And as we all know, the pandemic hit in 2020, and since then Xbox really hasn’t moved on the Asian front, also surprising given Sony’s continued success there. So further acquisitions can be an opportunity to address that.