Tech giant Microsoft Corp. is buying "Fallout" developer and gaming behemoth ZeniMax Media Inc. for $7.5 billion in cash, the two companies announced Monday.
The deal, expected to close in the first half of calendar year 2021, is a big bet on a rapidly growing gaming industry that Microsoft expects to be more than $200 billion in annual revenue in 2021, the companies said in a press release.
Bethesda-based ZeniMax, which owns Bethesda Softworks LLC, is one of the largest privately-owned gaming developers, with such franchises as "The Elder Scrolls," "Doom," "Quake," "Wolfenstein" and "Fallout." Microsoft owns the Xbox gaming system and recently previewed the latest iteration of the Xbox console as well as new cloud gaming capabilities.
“Gaming is the most expansive category in the entertainment industry, as people everywhere turn to gaming to connect, socialize and play with their friends,” said Satya Nadella, CEO of Microsoft. “Quality differentiated content is the engine behind the growth and value of Xbox Game Pass—from Minecraft to Flight Simulator. As a proven game developer and publisher, Bethesda has seen success across every category of games, and together, we will further our ambition to empower the more than three billion gamers worldwide.”
ZeniMax was founded by Chairman and CEO Robert Altman in 1999, and now has 2,300 employees around the world. The company’s current leadership will remain in place, according to the release.
“This is a thrilling day for this company, our employees, and our fans. We have enjoyed a close partnership with Microsoft for decades, and this deal is a natural progression of those years working together,” said Altman. “The big winners today are our fans. We are continuing to develop our slate of AAA games, but now with Microsoft’s scale and entire game stack, our games can only get better.”
ZeniMax also boasts a board stuffed with famous names, including Baseball Hall of Famer Cal Ripken Jr., film director Jerry Bruckheimer and former CBS chief Leslie Moonves.
Microsoft (NASDAQ: MSFT) reported about $143 billion in revenue in its fiscal year 2020 earnings.
