What Microsoft’s purchase of ZeniMax means?
I’ve had this question recently posed to me on a Twitch stream. Yes, I stream games on Twitch in addition to penning this blog. I haven’t cross promoted my Twitch stream on this blog because blogging and gaming are mostly unrelated. However, if you’re interested in watching me game, please leave a comment below and I’ll post my Twitch channel. Let’s explore the answer to the above question.
Bethesda and Microsoft
Microsoft isn’t really a gaming company. They are a software company who produces gaming products in among all of their other hardware and software product lines. Sony is, likewise, not really a gaming company for a similar reason. Sony is mostly a content producing company who also produces gaming hardware.
Anyway, Microsoft’s purchase of Bethesda’s parent company ZeniMax likely means eventual changes to all of Bethesda’s game franchises. In fact, I’m actually surprised that the FTC has allowed such a purchase considering the negative impact it will likely have on consumer choice.
Sony and Microsoft
Let’s start with the elephant in the room. Sony and Microsoft are rivals when it comes to gaming systems. Sony has the PlayStation and Microsoft has the Xbox. Because Microsoft owns the Xbox console, purchasing large gaming companies firmly pushes this situation into conflict of interest and consumer choice reduction territory. Additionally, Microsoft’s purchase of ZeniMax before the PS5 has really launched can become an easy way to keep the PS5 from succeeding.
Why? Microsoft has designs on making the Xbox Series X console succeed and be more successful than the PS5. To do this, they want to lock Sony’s platform out of as much content as they can. How will this manifest with Bethesda’s games?
While the final outcome is entirely uncertain, the handwriting is on the wall. What I mean is that Microsoft may eventually make all of Bethesda’s newest released games exclusive to the Xbox. That means that Bethesda’s game franchises (plural) may ultimately end up playable only on the PC and on the Xbox console. Yes, that could mean that both the Nintendo Switch and Sony’s PS5 are equally negatively impacted by this purchase.
Both Sony and Nintendo could find themselves without future Bethesda titles on their gaming platforms. That could mean no more Fallout, no more Elder Scrolls, no more Doom and no more Wolfenstein will make their way onto Sony or Nintendo’s platforms. It doesn’t stop there. Titles like Bethesda’s upcoming Starfield, which has yet to be released, could be pulled from release on both Sony and Nintendo’s platforms… leaving this game only available on PC and Xbox.
Sure, it may lose Microsoft money by not releasing these games on these non-Microsoft platforms, but Microsoft will more than make up for those game sales losses by pushing more Xboxes and PCs into the home. Eventually, these games will be sold to newly purchased Xboxes and PCs more than making up for the losses in sales on those other platforms. Basically, Microsoft has an easy way to do the dirty to both Sony and Nintendo as far as Bethesda games are concerned.
Microsoft is also well aware of the leverage they hold over the gaming industry by purchasing Bethesda. More than this, Microsoft can steer new consumers onto their Xbox line of consoles and away from Sony and Nintendo consoles strictly by enforcing Xbox Exclusives.
Exclusives
Bethesda isn’t the only studio on the planet. However, Bethesda is a large studio with many very cherished video game franchises… franchises that bring in a lot of cash and drive console purchases.
While Microsoft can enforce making upcoming Bethesda games exclusive, Microsoft doesn’t necessarily have to take this step. However, knowing that Sony pretty much kicked Microsoft’s butt with the PS4’s sales, Microsoft isn’t eager to repeat that trend with the Xbox Series X. Purchasing ZeniMax gives Microsoft a definite edge. It also means Microsoft might also be eyeing the purchase of Activision, EA, Rockstar and even Ubisoft. Don’t be surprised if Microsoft snaps up some of these additional game developers as well.
By Microsoft purchasing large game studios like Bethesda, they can control which console becomes the dominant console this time around (i.e., theirs). This means even more exclusive Xbox games.
Exclusive games force consumers to buy specific hardware platforms to play these exclusive titles.
PS5
What does this news mean for a console like the PS5? It puts the PS5 at a severe sales disadvantage. Microsoft could request Bethesda to not produce PS5 games. Without Bethesda’s support on the PS5, that leaves the PS5 at a major disadvantage in the upcoming next gen gaming market.
This is part of the reason I am not purchasing a PS5 at this time. I’m waiting on how this plays out. Bethesda’s ownership by Microsoft means a very real possibility of future exclusive Xbox titles from Bethesda, with no releases on the PS5 or the Nintendo Switch.
This change would put Sony and Nintendo with a clear sales disadvantage. Sony would have to rely not on Bethesda games to drive the PS5’s sales, but instead rely on Sony Studio game releases… games they have developed themselves or by studios they own (i.e., Sucker Punch).
That doesn’t mean the PS5 will be worthless, but it means that the future of Bethesda’s games being released on the PS5 has become very unclear. In fact, I’d use the word “muddy” to describe these waters.
Here are some questions that come out of the above:
- Should I buy and Xbox Series X or a PS5? The answer to this question entirely depends on what Microsoft has planned for Bethesda. If they intend to turn all future Bethesda releases into Xbox exclusives, then the answer to this question is… buy an Xbox Series X. Even then, I’d still recommend buying an Xbox Series X because there’s a zero chance of losing Bethesda games on the Xbox. However, there’s a high probability the PS5 will lose Bethesda’s future games. The even larger answer to this question also depends on whether Microsoft plans to buy more large game studios.
- Will Bethesda lose money? The answer to this question is, no. Microsoft has deep, deep pockets. They can withstand any short term monetary losses from making Bethesda’s games exclusive to the Xbox and they can also withstand the long term needs to recoup those losses by selling new Xbox consoles and any exclusive Bethesda games. The more consoles Microsoft sells, the more games they can sell.
- Will Microsoft force Bethesda to make exclusives? Yes, they will. This is guaranteed. The question is, which games will be forced into this category? That’s still unclear. Will it only be some of Bethesda’s games, all of them, new games only or some combination of this? We don’t know. However, I can guarantee at least one of Bethesda’s games will be released as an Xbox exclusive. My guess is that most of Bethesda’s games will become exclusives.
- What about existing Bethesda games? What happens to these? Microsoft isn’t stupid. They will allow existing games to continue to be sold and operate on the PS4 and any other older non-Microsoft consoles. They won’t rock this boat. Instead, Microsoft will look at upcoming unreleased games and use the games that have never been released to become exclusive.
As a result of these questions and answers, it’s clear that if you love Bethesda’s games and you wish to play future upcoming Bethesda game franchises, you may want to wait before investing in one of these new consoles. It would suck to spend a wad-o-cash to walk home with a PS5 only to find that the one Bethesda game you thought you could play is now an Xbox Series X exclusive. That means, you’ll never see that game released on the PS5. Microsoft is very likely to make this situation a reality.
If Microsoft buys even more of these large developers, they could lock Sony’s PS5 out of the mainstream gaming market. That would push Sony’s PS5 into a situation like Nintendo (and the PS Vita), where the console maker is entirely responsible for creating compelling game franchises for their respective console on their own. Unfortunately, that’s just not enough to keep a platform like the PS5 alive.
In other words, with the purchase of Bethesda, there’s a very real possibility that this time around that Sony’s PS5 will be the underdog.
Ramifications
The bigger ramifications of this purchase is the lack of and reduction of consumer choice. This purchase can easily push Microsoft into an even more monopoly status than they already are. Locking down the biggest game developers to exclusivity for the Xbox means causing the PS5 to ultimately fail and for the same reason the PS Vita failed.
Personally, I believe this is Microsoft’s true agenda. The Xbox One’s sales paled in comparison to the PS4. Microsoft is not eager to repeat this situation with the Xbox Series X. By buying large developers like ZeniMax / Bethesda, Microsoft can all but assure the success of the Xbox Series X… and, at the same time, assure Sony’s failure of the PS5.
This purchase is honestly a one-two punch to Sony…. and for Sony, it’s gotta hurt.
Sony and Gaming
If Sony is smart, they’ll run out and buy Rockstar or Ubisoft right now. They shouldn’t wait. They should purchase one of these companies as fast as they possibly can. Rockstar would be the best choice for Sony.
Sony could then have this same bargaining chip in their back pocket just like Microsoft has with Bethesda. Should Microsoft dictate Xbox exclusivity for Bethesda’s upcoming games, Sony can do the same thing for Grand Theft Auto and Red Dead Redemption (once they own Rockstar). Ultimately, it will be a “tit for tat” situation.
In fact, Sony should buy both Ubisoft and Rockstar and have two bargaining chips. Even still, such a game exclusivity war would lead to fracturing the gaming market in half. Basically, the consumer would be forced to buy multiple consoles to play games that formerly landed on both consoles. It’s a loss for consumer choice… which is why I’m surprised the FTC hasn’t stepped in and blocked this one.
I’m guessing that because the final outcome has not yet manifested, the FTC can’t see the forest for the trees. However, once hindsight forces 20/20 vision, it will be too late for the FTC to block this purchase.
What does this mean for Fallout?
I know this is a very specific question about a very specific game. However, I was asked this very question on a Twitch stream. Let me answer it here.
If you’re a fan of the Fallout series and you’re unsure which of the upcoming console to buy, I’d recommend waiting to see what Microsoft has in store for upcoming Bethesda games.
With that said and to reiterate what I’ve said above, there is now zero chance that Microsoft will withhold Fallout for the Xbox Series X and newer Xbox consoles. However, Microsoft can easily block the release of future Fallout games from the PS5 and the Switch. This means that a consumer’s investment of cash into a PS5 could see the console without any future Fallout or Elder Scrolls or Doom games.
What that means is that should Bethesda take on the challenge of remastering Fallout 1, Fallout 2 and Fallout New Vegas for the newer consoles, these games may only find their way onto the Xbox Series X as exclusives and may not be found on the PS5.
Basically, proceed with caution if you really, really want a PS5. You may find that like the PS Vita, without titles released from Bethesda, the PS5 may end up a dying console before it really gets the chance to take off, particularly if Microsoft buys even more of these large game studios. If the PS5 does fail due to Microsoft exclusives, it will be mostly thanks to Microsoft.
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For whom does the bell toll? Microsoft’s Xbox.
In case you haven’t been reading recent news, here’s an article that might wake you up… especially if you happen to be an Xbox platform fanboy. What is this alleged article? Microsoft has stated it will merge the PC and Xbox platforms into a single unified platform, ending the sale of dedicated console hardware. Let’s explore.
Xbox and Xbox 360
When the original Xbox arrived in 2001, it received lots of fanfare. The console market now had a competitor against the PlayStation 2. The PS2 had released only one year earlier in 2000. Though, the Sega Dreamcast had promise, Sega pulled the plug in 2000 citing lots of reasons including bad sales, competition and poor platform reception. The Xbox’s controller, architecture and speed quickly ended up competing with the PlayStation 2.
A few years later, we went through the second iteration of this console war when both Sony and Microsoft released the PS3 and the Xbox 360, respectively and near simultaneously. Once again, we had our next generation console in our hands and we gamers were happily playing with better graphics and sound quality.
The Xbox 360 took the lead in the console market over Sony’s PS3, but only by slim margins. Though, the XBox 360 managed to stay one step ahead through out the lifespan of both consoles.
Xbox One and Ps4
Unfortunately, Microsoft would not be able to maintain its fleeting lead it had won with the Xbox 360 with its blundering Xbox One E3 announcement in 2013. Here’s what they had wanted to do:
This announcement in 2013 would set the tone for all things to come including the next iteration of the Xbox platform. Within a week of their E3 announcement, after facing Sony’s harsh rebuttal at E3, Microsoft reversed all of its DRM and privacy invasion strategies after the gamers clearly spoke with their wallet, PS4 orders surged and people cancelled their Xbox One orders in droves. It’s clear, this blunder was Xbox’s first death knell and set in motion many future problems to come for the Xbox. Unfortunately, neither Microsoft nor the Xbox has been able to recover from this blunder.
Elite Console and Controller
Immediately prior to this Windows platform integration announcement, Microsoft had just released the Elite Console and Elite Controller. This controller being a much more costly update to its existing hardware ($15o vs $60). This console and especially the controller is Microsoft’s nod to a more professional gamer. That is, a nod to those gamers who want to play games using higher quality contollers, button remapping, changeable controller features, more inputs and faster consoles. I’ll tell you what, though. The Elite Controller is actually quite nice, but very very pricey. Yes, some of us do want these advanced features from our systems. However, it’s entirely disingenuous for Xbox to release the Elite controller and system only to see Microsoft announce the death of future hardware systems just a few months later. Really, what does this say to would-be gamers about Microsoft’s commitment to the gaming market?
To me, this says that the right hand doesn’t know what the left hand is doing in Redmond. On the one hand, you have the Xbox engineering team trying to drum up new gaming interest by releasing high quality experiences for the gamer. On the other, Microsoft itself is trying to reduce costs by getting rid of costly hardware projects it deems a loss. Unfortunately, this doesn’t mean good things for Microsoft as a whole. This ultimately means that the whole company is fractured internally and doesn’t have a proper focus on its products or its markets. Instead, it is making rash decisions without thinking through the long term ramifications of those decisions. A death knell.
Microsoft’s confusion
With this announcement of the integration of Xbox with Windows, Microsoft has likewise announced that it also intends (see article) to stop making future hardware and will instead focus on the Xbox platform as a subcomponent of Windows. Just like Windows Media Center, it will become an add-on to Windows. You might think that this is a great idea, but it isn’t. Let’s understand why.
Windows itself already offers developers a solid gaming development environment to produce native games on Windows. Most AAA game titles are made not only for consoles, but also for Windows and sometimes even Mac. The question is, would that spell the death of the Xbox platform? Yes. The reason the Xbox platform exists is as a gaming hardware platform independent of Windows. It does not exist for Netflix, Amazon or for any other non-gaming entertainment. Sure, you can play movies and music on the Xbox, but that’s not the platform’s intended purpose. Microsoft is seriously confused over the reason the Xbox platform exists and why it continues to exist. This confusion spells yet another death knell. Basically, if Microsoft thinks that the non-gaming aspects of the Xbox will survive once in Windows, it won’t. You can already use native Windows apps to get access to all of the services like Hulu, Netflix and Amazon… and the native apps are usually better.
The Death of the Xbox
Because Windows is already a solid gaming platform in its own right (in addition to being an entertainment platform), integrating a second gaming environment into Windows means that only one of these gaming platforms will survive the transition. Game developers will also only choose one platform to develop. Assuming status quo for the Xbox platform, the Xbox will be the clear loser. It’s simple to understand why: high priced licensing fees. It costs developers substantial amounts of cash to license and sell games branded with the Xbox moniker. It costs far far less to develop games under Windows directly. Unless Microsoft substantially changes their Xbox licensing model, this platform is entirely dead for gaming. Game developers won’t be willing to pay the excessive licensing fees on top of producing the game twice (Xbox and Windows) for the same hardware platform. Why would any game developer produce the same game twice that is destined for the same platform? They wouldn’t. A death knell.
So, what does this mean for gaming? PC gamers win a feather in their cap. Xbox gamers lose a platform entirely. Once games stop being produced for the Xbox platform, and they will stop, the only thing left to use the Xbox platform for is Netflix, other media activities and already purchased digital content. As I said above, you can already crack open Chrome or Firefox and do video streaming and music playing better. So, the answer, there will be nothing left to use the Xbox platform for except for legacy digital content that you may have purchased on an Xbox One/360… assuming that content even remains compatible after the Windows PC migration. Another death knell.
Digital Content
So, what does this mean for already purchased digital content? It means that you better hold onto your working Xbox One and Xbox 360 if you want to continue to use this content. Though, Microsoft may eventually force users to move to the Windows integrated platform and sunset the use of Xbox hardware entirely (and cut it off from the Xbox Live service).
This means that, at some point, you may no longer be able to download your digital content to your Xbox One and you may be forced to buy a PC. Depending on how Xbox One’s content activation system works, it may even prevent you from using the digital content you’ve already downloaded depending entirely upon how far and deep that Microsoft takes it.
Of course, this is still years off yet. But, once that time arrives, your Xbox One and 360 may become paperweights. A death knell.
Why this change?
From Microsoft’s perspective, I can understand the value and cost savings that integration (and lack of hardware) brings. No longer does Microsoft have to design, build and sell hardware platforms, no longer do they have to compete with Sony, no longer do they have to support this finicky hardware (a highly expensive ongoing investment). This means they can reduce their costs for all of the above. Instead, they can push the hardware costs back onto PC manufacturers to support their new Xbox platform.
Unfortunately, expecting PC manufacturers to support the Xbox is a pipe dream fantasy. There are far too many PC manufacturers who don’t follow the rules 100%. Instead, they get about 90% there and call the system done. This means that instead of having a fully 100% reliable Xbox platform, you’ll end up with a crashing behemoth of a system that, once again, barely works. The clear benefit to designing exclusive hardware is to achieve reliability by design. Leaving it to third parties to provide that hardware support means that some PC manufacturers will flat out not support the Xbox platform and those that do will charge a hefty premium. This ultimately means that buying a PC that properly supports the Xbox platform will likely mean a significantly higher cost than older far less expensive dedicated gaming console hardware. Not to mention, the clunky and ugly tower and desktop shapes of PC manufacturers which can no longer be used as a set top box.
This means that not only will the PC-based Xbox experience falter badly, you’re likely looking at 2x, 3x or more the price of today’s Xbox One to invest in a compatible PC-based Xbox platform. This puts this platform so far out of the price range of console gamers, this is yet another death knell for the Xbox. I won’t even get into the peripheral issues. Okay, I will a little. If Microsoft stops the hardware entirely, they’re likely to stop the controllers and leave that also up to third parties.
We all know how well PC controllers work with many games. Sometimes they work, sometimes they don’t. They are usually not wireless and when they are, they are chock full of wireless issues. The whole reason the Xbox One works well is because of the wireless controller and its close integration with the hardware.
Throwing the Baby out with the Bathwater
Ultimately, Microsoft is throwing away all of their hard earned gamer loyalty. They are effectively closing the Xbox and throwing away the key. What this ultimately says is that Microsoft has no long term commitment to the gaming market, the console market or the gamers. What was formerly the green glory will fade into Microsoft’s Windows obscurity.
Overall, this is the worst of all possible fates that could befall the Xbox. A console is not a console without hardware. We all know how well gaming platforms work when they offer dedicated hardware. We also know how well they don’t work when relying on third parties. Think Steam. Perhaps Microsoft is deluded enough to think that Steam is the model of the future? I can tell you that Steam isn’t it. Steam works, but for limited purposes. Effectively, Steam is the app store for gaming. Since most app stores don’t focus on gaming, it was inevitable that someone would put one together. Hence, Steam. But, the Xbox platform, regardless of its current strength in gaming will die a quick death once there is no more console hardware to be had. Gamers aren’t likely to spend their efforts chasing down third party hardware platforms that might or might not work. The whole point of a console is that it “just works”. The Steam model simply won’t work for the Xbox unless you’re talking about $2-5 pricepoint games which could run on Facebook. That’s not the class of gaming that Xbox One is today.
We all need hardware to make our lives better, yes even in gaming. You can’t game without hardware. Relying on PC manufacturers to get you what you need isn’t the answer. Worse, Windows native games and developers will kick the Xbox platform to the curb. No developer in their right mind would consider spending extra money to develop on the Xbox platform when they already have Windows development efforts underway. Why would game developers choose to redundantly build their game twice for the same platform? That’s just stupid.
Sony, Nintendo and, yes, Apple
All of the above is actually very good news for the remaining console developers. Once the Xbox platform dies quietly inside of Windows (and it will), Sony only need worry about Nintendo for the foreseeable future. However, with Apple’s recent foray into gaming with the latest Apple TV, this could mean Apple now has an opening into the console market. What I will say about the current Apple TV for 3D gaming is that it’s still very rudimentary. The textures are low res, the environments look like something out of the Nintendo 64 and there’s not a speck of realism to be found… yet. However, Apple can up the ante a lot in the next Apple TV console iteration. Assuming they wedge in a much higher end GPU and a lot more RAM into the Apple TV, they could easily match the specs of the Nintendo Wii U, but perhaps not yet approach the PS4… it will take quite a bit more effort by Apple to match Sony. For Apple, the door for the console market is quite clearly open. For Microsoft, the door is quickly closing.
Yes folks, the Xbox is officially a dead platform. With this integration announcement, this is the Xbox’s final death knell.
If you are considering the purchase of a new gaming console, you should steer clear of the Xbox One unless you really enjoy buying into dead gaming platforms.
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